BW Confidential - Issue #17 - March/April 2014 - (Page 24)

Interview Guerlain ceo Laurent Boillot Sizing up the future LVMH-owned beauty company Guerlain ceo Laurent Boillot talks about how he intends to boost the size and scale of the company by Oonagh Phillips B igger means better for Guerlain. Laurent Boillot, who has headed the LVMH-owned brand since 2007, is focusing on moving the brand up a league with the aim of reaching €1bn in sales in five years. Industry sources currently estimate the brand's sales to be around €700m. The company seems to be on the right road to growth. Guerlain has reported above-industry growth in the past few years, thanks to the success of the La Petite Robe Noire fragrance, which launched in 2012 and ranked number three in women's fragrances in France in 2013 (in value), according to NPD, and high-end skincare range Orchidée Impériale, which is now the brand's best-selling line. According to Boillot, this performance is down to a strategy that has put the focus on key markets and key lines. Now, the plan is to build more visibility for the brand internationally, in part through sustained media investment. The brand has already shown its readiness to make a media splash in its home market with the launch of an ad campaign for Shalimar, which was said to have accounted for more than two-thirds of the brand's ad budget for the last quarter of 2013. There will be a special focus on China, where the company will open a standalone store in 2015 (although Boillot underlines that he will continue to invest in key mature markets in Europe), and the US will also be given more attention, beginning in 2015. In terms of product categories, more energy will be put into attacking the men's segment, with a new masculine fragrance slated to launch in the second half of this year. Perhaps the biggest outward sign of the brand's desire to build scale was the renovation of its Paris flagship store on the capital's Champs Elysées. The revamped store, which opened in November last year, has doubled in size and now claims to be the largest beauty standalone store in the world. More than ever, the store is intended as a vehicle for communicating what the brand stands for, to both French, as well as foreign clients. Guerlain ceo Laurent Boillot talks to BW Confidential about his plans for the brand's expansion. 24 You have talked about a change in scale. How big do you see the Guerlain brand becoming over the next five years? This change in scale, which is the theme of the company at the moment, is a decision that goes back to 2009, when everyone was going through the economic crisis. We had seen good growth from 2005 to 2008 and decided that it was the time to go further. So we set out with a new ambition and came up with a certain number of projects, some of which are coming to light today: the re-opening of our flagship store, the boom in our fragrance business, thanks to La Petite Robe Noire, and also the construction of a new cosmetics factory, which will open in July. We are at a midway point in this ambition, which centers on three criteria. The first is brand equity, as I would like more people in the world to better know Guerlain. We are building brand equity though a more daring media strategy- this is what we have done with La Petite Robe Noire and Shalimar, where we had a cinematic-like ad campaign. Obviously, the revamped boutique on the Champs Elysées is also important for building the brand image. The second criterion is to increase sales through strong growth in our main lines and through strong international growth. We think that the brand can grow to reach €1bn in sales in the next five years. The third issue is profitability, which I can't give any figures on, but we will pride ourselves on delivering profitable growth. Is the focus still on France, Russia, China and the Middle East? These markets are still our priority, in addition to travel retail. But there is also a second division of countries-some more mature countries-which we have invested in recently, such as Italy in Europe or Japan in Asia. In 2015 or 2016, we will begin to look closer at the US, where we don't really have a big presence. How can you boost your position in China, given that the market is difficult and you are mainly a fragrance brand? China is extremely competitive and the cost of operating is becoming higher, but that said, it is one of the rare countries where the real growth of the market is strong. China is still a big priority, and is the March-April 2014 - N°17 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #17 - March/April 2014

Cover
Comment
Contents
Update
Brand & retail news recap
Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Guerlain ceo Laurent Boillot
Insight: Make-up
Category overview
Budget brands
The latest trends
Retail
Innovative strategies
Retail
Vending machines
Store concepts
Digital Social media content
Market watch: Latin America
Regional overview
Mexico: country analysis
Mexico: prestige retailing
Colombia: country analysis
Colombia: prestige retailing
Argentina: country analysis
Argentina: prestige retailing
Radar A profile of six up-and-coming beauty brands
Emerging markets Company profile: Mahogany
Travel retail: Brazilian travelers
Analysis
Industry viewpoint
Packaging: Decoration techniques
Trends analysis
Innovations
Last word Diagonal Reports analyst Jacqueline Clarke

BW Confidential - Issue #17 - March/April 2014