L’Occitane Group’s acquisitive nature has been hard to ignore of late and the start of 2024 continued this trend.
The sustainable beauty and wellness company began the year by tucking yet another brand under its belt, adding home fragrance label Dr. Vranjes Firenze to the mix in January. It was a further step in the group’s strategy to build a geographically-balanced portfolio of premium beauty and fragrance brands.
So, are there more acquisitions to follow for the B Corp certified company? Certainly, it has made no secret about its intentions to strengthen its position as a multi-billion Euro, multi-brand group staying open to accretive M&A opportunities.
L’Occitane Group, Group Managing Director Laurent Marteau (named Group CEO and Group Managing Director from April 1) hinted: “We are never against a nice brand addition [when it’s] presented to the group.”
Dr. Vranjes Firenze adds further weight to its stable of labels, which includes L’Occitane en Provence, Elemis, Grown Alchemist, Erborian, Sol de Janeiro and Melvita. Its growing brand line-up has maintained momentum of late. Recent unaudited results for the third quarter ended 31 December 2023 (FY2024 Q3) showed net sales of €843.4 million with growth of 19.5% at reported rates. Net sales for nine months ended December 2023 (FY2024 9M) reached €1,915.3 million, demonstrating 18.9% growth at reported rates. Sol de Janeiro turned in a particularly stellar performance and Elemis achieved solid results.
But what are the implications of its beauty gains and burgeoning portfolio for travel retail? Marteau indicated plans to grow the travel retail business to a “double-digit number” soon with a multi-brand approach, which will also increase the visibility of brands. Travel retail still accounts for a relatively small share of the business because most of its brands have only recently been launched in the market.
“It was not even 5% of our sales and it can be much more, so we see the opportunity there,” remarked Marteau. “We don’t have many business units that have a multi-brand approach – travel retail is one of them, China is the other. We have our first multi-brand organisation there, it is a first for the group and I think this is very important.”
Since Brazilian-inspired Sol de Janeiro was introduced in May 2023 via a pre-launch with Avolta, it has “skyrocketed.” Success in the local markets is rapidly being followed in travel retail supported by colourful pop-ups showcasing best-sellers such as Brazilian Bum Bum Cream and Brazilian Crush Cheirosa 62 Hair and Body Mist. The multi-generational label’s popularity has demonstrated that attractively-priced body care is appealing, particularly for Gen Z and tech-savvy Millennial travellers.
For British skincare brand Elemis, the strategy is to expand from the UK to locations where it is performing well in local markets. As part of this, the group is exploring the potential to implement more of an experiential and service-based offer. It’s a move Elemis has already made in the cruise business and it has Biotec 2 (facial) machines, which are a unique selling point in terms of service.
“We could easily repeat the same thing from an airport perspective by adding a different experience and it is something we are going to look at,” remarked Marteau. “In some airports, you need to have special licences and therapists depending on the country’s regulations.”
There are still many opportunities to grow distribution because these labels are not everywhere yet. Elemis and Sol de Janeiro have just entered South East Asia, and are not in China or North Asia so there is a lot of potential. Distribution will be extended with existing partners in the countries where they have a presence, such as the US and Europe.
Australian cosmeceutical skincare brand Grown Alchemist was launched with Gebr. Heinemann at Sydney airport last year and rolled out in Europe. A big launch on the Chinese local markets last July will also be strategically important going forward.
Meanwhile, the distribution position of Korean skincare brand Erborian (a name derived from Herbs of the Orient) will be extended from France with Lagardère Travel Retail to other European operators. “With Erborian we are capitalising on BB and CC creams, and this is really a point of difference,” said Marteau.
L’Occitane en Provence, a core brand that has been very present in the travel-retail channel, will also be re-emphasised. “So, for us, it will be important to have equal visibility on the new brands but also to re-focus on L’Occitane en Provence,” stated Marteau.
It’s a brand collection that can help retailers navigate future trends and meet challenges, while also connecting with Gen Z shoppers, according to Marteau. “We are probably one of the groups which has the most brands represented into Gen Z,” he stated.
Yet, sometimes it can still be complicated to list them because retailers have stores with existing brands and they don’t necessarily want to distort their assortment, placements or locations. “I’d like retailers to think where they want to be in 20 years because the stores won’t look the same and the brands won’t be in the same locations,” commented Marteau.
He relates that the group’s brands are “very present” on social and digital channels. For example, Sol de Janeiro is number one on TikTok in the US and Elemis is number one by media value, Erborian is number two on TikTok in France and Elemis is number one in media value in the UK.
Retailers across all channels will need to exceed customer expectations to drive future evolution. “I think retailers in general [not only travel retailers] are seeing that they need to make differences,” explained Marteau. “I think before you were putting products on shelves, adding the stock, marketing it and sometimes the performance was coming. Now it is not enough. Whoever your final consumers are, they want better service, better experience and better value from the brands. What we would like to have is the opportunity to do that, both in-store and online.”
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