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| Type | Public (Euronext: OR) |
|---|---|
| Founded | 1909 |
| Founder(s) | Eugène Schueller |
| Headquarters | Clichy, France |
| Key people | Jean-Paul Agon (CEO), Lindsay Owen-Jones (Chairman of the board), Liliane Bettencourt (Non-executive director and major shareholder) |
| Industry | Cosmetics |
| Revenue | €17.06 billion (2007)1 |
| Operating income | ▲ €2.827 billion (2007)1 |
| Profit | ▲ €2.039 billion (2007)1 |
| Employees | 63,360 (2007)1 |
| Subsidiaries | See below |
| Website | http://www.loreal.fr |
The L'Oréal Group is the world's largest cosmetics and beauty companycitation needed and is headquartered in the Paris suburb of Clichy, Hauts-de-Seine, France. L'Oréal has developed activities in the field of cosmetics, concentrating on hair color, skin care, sun protection, make-up, perfumes and hair care. L'Oréal is active in the dermatological and pharmaceutical fields. L'Oréal is also the top nanotechnology patent-holder in the United States.
L'Oréal is a listed company, but the founder's daughter Liliane Bettencourt, who is one of the richest people in the world, and the Swiss food company Nestlé each control over a quarter of the shares and voting rights.
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History
In 1907, Eugène Schueller, a young French chemist, developed an innovative hair-color formula. He called his improved hair dye Auréole. Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers.
In 1909, Schueller registered his company, the Société Française de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France"), the original L’Oréal. The guiding principles of the company, which eventually became L’Oréal, were research and innovation in the interest of beauty.
During the early twentieth century, Schueller provided financial support and held meetings for La Cagoule at L’Oréal headquarters. La Cagoule was a violent French fascist-leaning and anti-communist group. L'Oréal hired several members of the group as executives after World War II.
In 1920, the small company employed three chemists. By 1950, the research teams were 100 strong; that number reached 1,000 by 1984 and is nearly 2,000 today.
L’Oréal got its start in the hair-color business, but the company soon branched out into other cleansing and beauty products. L’Oréal currently markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair color, permanents, styling aids, body and skin care, cleansers and fragrances. The company's products are found in a wide variety of distribution channels, from hair salons and perfumeries to hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.
L’Oréal has five worldwide research and development centers: two in France: Aulnay and Chevilly; one in the U.S.: Clark, New Jersey; one in Japan: Kawasaki, Kanagawa Prefecture; and in 2005, one was established in China, Shanghai.
L’Oréal purchased Synthélabo in 1973 to pursue its ambitions in the pharmaceutical field. Synthélabo merged with Sanofi in 1999 to become Sanofi-Synthélabo. Sanofi-Synthélabo merged with Aventis in 2004 to become Sanofi-Aventis.
On 17 March 2006 L'Oréal made a £652 million agreed takeover of ethical cosmetics company The Body Shop.
The company has recently faced discrimination lawsuits in France related to the hiring of spokesmodels. In the UK L'Oreal has faced widespread condemnation from OFCOM regarding truth in their advertising and marketing campaigns concerning the product performance of their mascara brand. Multiple video parodies of their advertising campaigns have spoofed their products and can be viewed on You Tube - search L'Unreal for links to content.
L'Oreals history has just been exposed in a bestseller by Monica Waitzfelder published in French as 'L’Oréal a pris ma maison' and English as 'L'Oreal stole my home'. The book details how L'Oreal, a notoriously anti-Semitic company historically, took over the Waitzfelder home in the German city of Karlsruhe (after the Nazis had engineered the removal of the family) to make it its German headquarters. Waitzfelder has run a life-long battle through the French courts to try to get compensation — the case is now to come before the European Court of Human Rights.
L’Oréal's famous advertising slogan is "Because I’m worth it". It has recently been replaced by "Because you're worth it" .
L’Oréal also owns a Hair and Body products line for kids called Loreal Kids, the slogan for which is "Because we're worth it too".
L'Oréal still tests new ingredients on animals, which has led to criticism from Naturewatch Compassionate Shopping.2
1400 new formulations have been registered in the last three years.
In 1987 L'Oréal and 3 Suisses founded Le Club des Créateurs de Beauté specializing in mail order sales of cosmetic products.
Following L'Oréal's purchase of The Body Shop, who previously were against animal testing, The Body Shop founder Dame Anita Roddick was forced to defend herself against allegations of abandoning her principles over L'Oréal's track record on animal testing. As a result, calls were made for shoppers to boycott The Body Shop.3
Business
Corporate governance
Board of directors
Current members of the board of directors of L’Oréal are: Jean-Paul Agon, Francisco Basco, Werner Bauer, Liliane Bettencourt, Françoise Bettencourt Meyers, Peter Brabeck-Letmathe, Charles-Henri Filippi, Xavier Fontanet, Bernard Kasriel, Marc Lacharrière, Jean-Pierre Meyers, Lindsay Owen-Jones, Franck Riboud, Annette Roux and Louis Schweitzer.
Management committee
The management committee includes:
- Jean-Paul Agon, Chief Executive Officer
- Laurent Attal, Chief Executive Officer, L’Oréal USA
- Béatrice Dautresme, EVP of Corporate Communications
- Jean-François Grollier, EVP of Research and Development
- Christian Mulliez, EVP of Finances
- Simon Shum Siu-hung, President of Nano-technology Products
- Jean-Jacques Lebel, President of Consumer Products
- Nicolas Hieronimus, President of Professional Products
- Geoff Skingsley, EVP of Human Resources
- Marc Menesguen, President of Luxury Products
Stockholders
As at year-end 2007:1
- Breakdown of share ownership: 30.0% by the Bettencourt Family, 28.9% by Nestlé, 3.7% treasury shares, and the remaining 37.4% are publicly traded.
- Voting rights distribution: 31.2% to the Bettencourt Family, 30.0% to Nestlé, and 38.9% to the public.
Sales, profits, etc.
In 2003, L’Oréal announced its 19th consecutive year of double-digit growth. Its consolidated sales was €14.029 bn and net profit was €1.653 bn. 96.7% of sales derived from cosmetic activities and 2.5% from dermatological activities. L’Oréal has operations in over 130 countries, employing 50,500 people, 24% of which work in France. 3.3% of consolidated sales is invested in research and development, which accounts for 2,900 of its employees. In 2003, it applied for 515 patents. It operates 42 manufacturing plants throughout the world, which employ 14,000 people.
- Cosmetics sales by division breakdown: 54.8% from consumer products at €7.506 bn, 25.1% from luxury products at €3.441 bn, 13.9% from professional products at €1.9 bn, and 5.5% from active cosmetics at €0.749 bn.
- Cosmetic sales by geographic zone breakdown: 52.7% from Western Europe at €7.221 bn, 27.6% from North America at €3.784 bn, 19.7% from rest of the world at €2.699 bn.
In 2007, L’Oréal was ranked 353 in the Fortune Global 500.4 The company had earned $2,585 million on sales of $19,811 million. There were 60,850 employees.4
Joint ventures and minority interests
L’Oréal holds 10.41% of the shares of Sanofi-Aventis, the world's number 3 and Europe's number 1 pharmaceutical company. The Laboratoires Inneov is a joint venture in nutritional cosmetics between L’Oréal and Nestlé; they draw on L’Oréal's knowledge in the fields of nutrition and food safety. Galderma is another joint venture in dermatology between L'Oréal and Nestlé.
Community involvement & awards
In 2007, L’Oréal's Canadian division was named one of Canada's Top 100 Employers, as published in Maclean's magazine, the only cosmetics manufacturing company to receive this honour.5
Brands
Brands are generally categorized by their targeted markets, such as the mass, professional, luxury, and active markets.
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False claims in advertising and litigation for racial discrimination
In May 2007, L'Oréal was one of several cosmetic manufacturers ordered by the Therapeutic Goods Administration in Australia to withdraw advertising regarding the wrinkle removal capabilities of their products.6
In July 2007, the Garnier division and an external employment agency were fined €30,000 for recruitment practices that excluded non-white women from promoting its shampoo, "Fructis Style".7 L'Oréal is reported as saying the decision was "incomprehensible"8, and would challenge the measure in court.
In July 2007, the British Advertising Standards Authority rapped L'Oréal for a television advert on its “Telescopic” mascara, featuring Penélope Cruz, stating "it will make your eyelashes 60% longer." In fact, it only made the lashes look 60% bigger, by separating and thickening at the roots and by thickening the tips of the lashes. They also failed to state that the model was wearing false eyelashes. 9
References
- ^ a b c d e "Annual Report 2007". L'Oréal. http://www.lorealfinance.e-loreal.com/site/us/contenu/rapport/rapport2007/pdf/2007_Full_Annual_Report.pdf. Retrieved on 2008-07-12.
- ^ 'Naturewatch Compassionate Shopping - L'Oreal fact file. Accessed August 9, 2008.
- ^ "Anita's £652m sell-out", The Independent Published 18 March 2006. Accessed 8 May 2008.
- ^ a b [1]
- ^ "Reasons for Selection, 2007 Canada's Top 100 Employers". http://www.eluta.ca/einfo?en=L'Or%E9al+Canada+Inc.&ri=01c7e29b00765143356d9ab408206c1d&rk=cf53704cc356bed006aaab6ec72e916d.
- ^ "Wrinkle creams are a rip-off", The Daily Telegraph (Australia) (2007-05-07). Retrieved on 20 July 2007.
- ^ http://www.soxfirst.com/50226711/loreal_found_guilty_of_racism.php
- ^ http://www.africaresource.com/index.php?option=com_content&view=article&id=425:loreal-tells-women-of-color-to-take-a-hike&catid=136:race&Itemid=351
- ^ L'Oréal (UK) Ltd
See also
External links
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- This page was last modified on 28 December 2008, at 13:09.
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