L’Oréal Holds Tight As China Keeps Up Growth

The French cosmetics powerhouse L’Oréal disclosed a 11.7 percent drop in sales for the first half 2020 on a like-for-like basis, as shown in its 2020 half-year financial results released on July 30. With sales revenue registered at 5.85 billion euros, down 19.4 percent, the group was hurt by the ongoing COVID-19 pandemic as its peers. Yet, unlike the fashion market, L’Oréal’s main crisis came from supply more than demand, according to Chairman and Chief Executive Officer Jean-Paul Agon, as he commented, “The consumption of beauty products over the period was strongly impacted by the closure of millions of points of sale (hair salons, perfumeries, department stores, airport stores, etc.); [thus] consumers temporarily unable to purchase products and services.” Though offline business and travel retail were heavily impacted, the inaccessibility of beauty products offline proliferated e-commerce channels with a remarkable 64.6 percent growth. Among the regional markets affected by the global health crisis, mainland China is the only market that achieved positive growth, seeing 17.5 percent growth in the first half in comparable terms. In addition to the Consumer Products division, the L’Oréal Luxe division that features high-end brands such as Lancôme, Yves Saint Laurent, and Helena Rubinstein, recorded strong performances in the market, growing of more than 30 percent. The rapid recovery was attributed to local Chinese beauty consumers’ unabating appetite, as well as various shopping festivals, online and offline. Moreover, L’Oréal remains positive that the group can outperform the market and expects to return to growth in the second half of the year, with Agon noting: “We are embarking on an aggressive plan of new product launches and business drivers to stimulate, in partnership with our retail partners, the return of the consumption of beauty products.”

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L’Oréal Holds Tight As China Keeps Up Growth