L’Oreal Optimistic About Post-Shutdown Growth, Notes Likely Thinning Of Beauty Field
“It's unfortunate, but it's the Darwinian side of this industry,” L’Oreal CEO Jean-Paul Agon said on 16 April while discussing newer players’ prospects for survival through the COVID-19 crisis and L’Oreal’s own first-quarter results – down 4.8% like-for-like, but ahead of the market.
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The decision to close Clarisonic follows a €234m impairment charge recorded in 2016 and comes as L’Oreal faces tough strategic decisions in a global economy ravaged by the COVID-19 crisis.
The beauty giant says it is selling its Professional Beauty and retail hair-care businesses to global investment firm KKR and targeting $700m in cost reductions over the next two and a half years. Coty already was in transformation mode prior to COVID-19, which drove a 23% decline in its third-quarter net sales, and it does not expect revenue levels to normalize anytime soon.
From record organic growth to a 9% decline, The Estee Lauder Companies’ fiscal performance over the past two quarters illustrates sharply the devastating and largely unanticipated impact of the COVID-19 pandemic, even for firms best-positioned to ride it out.