L'Oréal

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L'Oréal S.A.
Type Société Anonyme
Traded as Euronext: OR
Industry Personal care
Founded 1909
Founder(s) Eugène Schueller
Headquarters Clichy, Hauts-de-Seine, France
Area served Worldwide
Key people Jean-Paul Agon (Chairman and CEO), Liliane Bettencourt (Non-executive director and major shareholder)
Revenue €19.50 billion (2010)[1]
Operating income €3.057 billion (2010)[1]
Profit €2.240 billion (2010)[1]
Total assets €24.04 billion (end 2010)[1]
Total equity €14.87 billion (end 2010)[1]
Employees 66,620 (end 2010)[1]
Subsidiaries The Body Shop
Website loreal.com

The L'Oréal Group is the world's largest cosmetics and beauty company.[2] With its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France,[3] it has developed activities in the field of cosmetics. Concentrating on hair colour, skin care, sun protection, make-up, perfumes and hair care, the company is active in the dermatological and pharmaceutical fields and is the top nanotechnology patent-holder in the United States.[citation needed]

L'Oréal is a listed company, but the founder's daughter Liliane Bettencourt and the Swiss food company Nestlé each control over a quarter of the shares and voting rights.[citation needed]

Contents

[edit] History

In 1907, Eugène Schueller, a young French chemist and future La Cagoule supporter, developed a hair dye formula called Auréale. Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers.

On July 30, 1909, Schueller registered his company, the Société Française de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France" literally "French Society of Inoffensive Tinctures for Hair"), the original L’Oréal. The guiding principles of the company, which eventually became L’Oréal, were research and innovation in the field of beauty.

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, hair styling, body and skin care, cleansers, makeup 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 Shanghai, China. A future facility in the US will be in Berkeley Heights, New Jersey.

From 1988 to 1989, L'Oréal controlled the film company Paravision, whose properties included the Filmation and De Laurentiis libraries. StudioCanal acquired the Paravision properties in 1994.

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 purchased cosmetics company The Body Shop for £652 million.

The company has recently faced discrimination lawsuits in France related to the hiring of spokesmodels and institutional racism. In the UK, L'Oréal has faced widespread condemnation from OFCOM regarding truth in their advertising and marketing campaigns concerning the product performance of one of their mascara brands.

L'Oréal's famous advertising slogan is "Because I'm worth it". In the mid 2000s, this was replaced by "Because you're worth it". In late 2009, the slogan was changed again to "Because we're worth it" following motivation analysis and work into consumer psychology of Dr. Maxim Titorenko. The shift to "we" was made to create stronger consumer involvement in L'Oréal philosophy and lifestyle and provide more consumer satisfaction with L'Oréal products. L'Oréal also owns a Hair and Body products line for kids called L'Oréal Kids, the slogan for which is "Because we're worth it too".

Protest group Naturewatch states that L'Oréal continues to test new ingredients on animals.[4] The company states that no animal testing for finished products has taken place since 1989 and that L'Oreal has invested significantly in alternative methods for chemical safety testing,[5] though they implicitly acknowledge that they continue to perform animal testing of ingredients.[6]

Following L'Oréal's purchase of The Body Shop, who continue to be 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. Calls were made for shoppers to boycott The Body Shop.[7]

L'Oreal has made quite a few statements on claims of animal testing.[8] Since 1989 they have stopped all testing on animals.[9] which also can be found at their Company website [10]

In 1987, L'Oréal and 3 Suisses founded Le Club des Créateurs de Beauté specializing in mail order sales of cosmetic products.

February 2011: L'Oreal will have the largest factory in the Jababeka Industrial Park, Cikarang, Indonesia with total investment of US$50 million and it will be ready in October 2011. The production will be absorbed 25 percent by domestic market and the rest will be exported. In 2010 significant growth occurred at Indonesia with 61 percent increase of unit sales or 28 percent of net sales.[11]

[edit] Business

L'Oréal Paris hair gel. Note the Piet Mondrian-esque design.

[edit] Corporate governance

[edit] 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.

[edit] Management committee

The management committee includes:

  • Jean-Paul Agon, Chief Executive Officer
  • Frederic Roze, 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
  • 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

[edit] Stockholders

As at year end 2010:[1]

  • Breakdown of share ownership: 30.9% by the Bettencourt family, 29.7% by Nestlé, 1.9% treasury shares, 0.7% company savings plan, and the remaining 36.8% is public.

[edit] 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.[12] The company had earned $2,585 million on sales of $19,811 million. There were 60,850 employees.[12]

[edit] 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 Innéov 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.

[edit] Community involvement and awards

In 2008, L'Oréal was named Europe's top business employer by The European Student Barometer,[13] a survey conducted by Trendence that covers 20 European countries and incorporates the responses of over 91,000 students.

The L'Oréal-UNESCO Awards for Women in Science was established to improve the position of women in science by recognizing outstanding women researchers who have contributed to scientific progress.

The awards are a result of a partnership between the French cosmetics company L'Oréal and the United Nations Educational, Scientific and Cultural Organization (UNESCO) and carry a grant of $100,000 USD for each laureate. [1]

The same partnership awards the UNESCO-L'Oréal International Fellowships, providing up to $40,000 USD in funding over two years to fifteen young women scientists engaged in exemplary and promising research projects.[14]

L'Oréal organizes every year the L'Oréal Brandstorm, an acknowledged business game for students in 43 countries. The game is related to marketing and has a first prize of $10,000, a second prize of $5,000 and a third prize of $2500.

L'Oréal is also involved in the "Look Good...Feel Better"- project which is a Beauty Industry Charity which was formed over 16 years ago to help woman combat the visible side effects of their cancer treatment of which L'Oréal is a founder member.

[edit] Claims of racial discrimination in advertising, and other litigation

On August 11, 2005, the Supreme Court of California ruled that former L'Oréal sales manager Elyse Yanowitz had adequately pleaded a cause of action for retaliatory termination under the California Fair Employment and Housing Act, and remanded the case for trial.[15] The case arose out of a 1997 incident in which Jack Wiswall, then the general manager for designer fragrances, allegedly told Yanowitz to fire a dark-skinned sales associate despite the associate's good performance. When Yanowitz refused, Wiswall pointed to a "sexy" blonde-haired woman and said, "...get me one that looks like that." Wiswall retired as president of the luxury products division of L'Oréal USA at the end of 2006.

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.[16]

In July 2007, the Garnier division and an external employment agency were fined €30,000 for recruitment practices that intentionally excluded non-white women from promoting its shampoo, "Fructis Style".[17] L'Oréal is reported as saying the decision was "incomprehensible",[18] and would challenge the measure in court.

In July 2007, the British Advertising Standards Authority attacked 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.[19]

In July 2011, the British Advertising Standards Authority took action against L'Oréal when they banned two airbrushed Lancôme advertisement in the UK featuring actress Julia Roberts and supermodel Christy Turlington. The agency issued the ban after British politician Jo Swinson argued that the two ads misrepresented reality and added to the self-image problem amongst females in the UK. L'Oréal acknowledged that the photos had been airbrushed but argued that the two cosmetic products could actually produce the results depicted in the ads and that the results of the products had been scientifically proven.[20]

[edit] WWII Controversy

Eugène Schueller, the company's founder, was a Nazi sympathizer. [21] L'Oreal concedes that Schueller was an anti-Semitic fascist. [22] He was also a member of La Cagoule, which supported the Vichy regime, and was a violent, pro-fascist and anti-communist organization. Eugène bankrolled La Cagoule and some meetings of La Cagoule were held at L'Oreal headquarters. Some of the criminal activities perpetrated by La Cagoule include firearms transportation, assassinating a former minister, and firebombing six Synagogues. [23] [24]

Other controversy arose when Jean Frydman, a shareholder and board member of Paravision, a film subsidiary of L'Oreal, was fired. He claims that he was let go because L'Oreal wanted to avoid an Arab boycott of businesses associated with Jews. In turn, Frydman decided to expose the past of L'Oreal executives. André Bettencourt who married Schueller's daughter, Liliane Bettencourt, and became deputy chairman for L'Oreal, wrote 60 articles for La Terre Française. La Terre Française was a anti-Semitic Nazi propaganda sheet. André has admitted ownership of the propaganda but claimed he was poisoned by the Vichy regime and said, "I have repeatedly expressed my regrets concerning them in public and will always beg the Jewish community to forgive me for them."[25] André Bettencourt also sheltered Schueller and several collaborators from the French Resistance after Liberation [26].It was also revealed that Eugene Schuller hired Jacques Correze, who as of 2001, was the honorary head of L'Oreal's U.S. affiliate, Cosmair, and was involved with La Cagoule.[27]

The Nazi controversies don't end there. It was revealed that L'Oreal had its German headquarters for over 30 years, before being sold in 1991, on land which was confiscated from Jews during WWII. The Jewish family has been battling for restitution from the company for three generations, the latest of which is Edith Rosenfelder, a Holocaust survivor. Fritz Rosenfelder, was forced to sell the house to a Nazi official, of which the family never received the proceeds of the sale. Instead, the family was deported. The allies passed Jewish restitution legislation which says that transactions, even if appearing to be with the owner's consent, can be considered invalid. Since the land was sold to an offshoot of L'Oreal, which was later bought out in 1961 by L'Oreal, the company claims that it is not responsible for anything that happened before then. The basis for Rosenfelder's argument is that since the original sale was illegal, all subsequent sales are equally unlawful. There was restitution paid in 1951 to the Jewish Restitution Successor Organization, but this was done without the family's consent and none of the money ever reached the family. A book by Monica Waitzfelder, daughter of Edith Rosenfelder, published in French as L'Oréal a pris ma maison and in English as L'Oréal stole my house!, details how L'Oréal, 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. [28] Monica Waitzfelder is quoted as saying, "All the other businesses which took Jewish property have since returned it, without any great debate. I don't understand why L'Oréal should be any different from the others." A case was brought before the Supreme Court in France, but the public prosecutor ruled that there could be no trial. As of 2007, she is bringing the case to the European Court of Human Rights. [29] [30]

[edit] Modern Controversy

Most recently, L'Oreal appeared on the list published by the US congress of companies that support the SOPA bill in 2011.[31]

[edit] Brands

Brands are generally categorized by their targeted markets, such as the mass, professional, luxury, and active cosmetics markets. The Body Shop and Galderma are directly attached to the head office. L'Oréal also owns interests in various activities such as fine chemicals, health, finance, design, advertising, insurance. [32]

Professional Products

Original activity of the group, these products are developed for and in collaboration with hairdressers.

  • L'Oréal Professionnel, including ARTec and Innate
  • Kérastase (created by L'Oreal in 1964)
  • Kéraskin Esthetics, created by L'Oreal in 2007 and specializing in skin care professionals.
  • Redken 5th Avenue NYC, founded by Paula Kent and Jheri Redding in 1960 and acquired by L'Oreal in 1993.
  • Matrix Essentials, founded by Arnie Miller in 1980 and acquired by L'Oreal in 2000.
  • Mizani, founded in 1991 and bought by L'Oreal in 2001.
  • PureOlogy Research, founded in 2001 and acquired by L'Oreal in 2007.
  • Shu Uemura Art of Hair


Luxury Products

This division includes the most prestigious brands of the group. It offers perfumes and make up items in selective distribution channel.

  • Lancôme
  • Yves Saint Laurent
  • Giorgio Armani
  • Biotherm
  • Cacharel
  • Diesel
  • Maison Martin Margiela
  • Viktor & Rolf
  • Ralph Lauren
  • Kiehl's
  • Shu Uemura
  • Stella McCartney


Consumer Products

This division includes the most famous brands of the group, these products are principally sold in supermarkets.

  • L’Oréal Paris, premium brand, with Elsève (Elvive, Elvital), Elnett, Studio Line, Perfection, Plénitude, Body Expertise, Dermo-Expertise, Solar Expertise, Kids, Progress Homme, Men Expert and Ombrelle.
  • Garnier, founded in 1904 and bought by L’Oréal in 1965. It includes brands like Ambre Solaire, Fructis, Ultra Doux, Skin Naturals, Neutralia, Obao…
  • Maybelline, founded in 1915 and bought by L’Oréal in 1996.
  • SoftSheen-Carson
  • Le Club des Créateurs de Beauté


Active Cosmetics

This division offers high-technicity products, which are sold in pharmacies.

  • Vichy
  • La Roche Posay
  • Inneov
  • Skinceuticals
  • Roger&Gallet
  • Sanoflore

[edit] Head office

Centre Eugène Schueller, L'Oréal head office, in Clichy, France

L'Oréal Group has its head office in the Centre Eugène Schueller in Clichy, Hauts-de-Seine, near Paris.[33] The building, constructed in the 1970s from brick and steel, replaced the former Monsavon factory, and employees moved into the facility in 1978. 1,400 employees work in the building.[34] The building is often referred to as the "Beauty Factory" by the public. In 2005 Nils Klawitter of Der Spiegel said "the building, with its brown glazed façade of windows, is every bit as ugly as its neighborhood." Klawitter added that the facility "gives the impression of a high-security zone" due to the CCTV cameras and security equipment. The world's largest hair salon is located inside the head office building. As of 2005, 90 hairdressers served 300 women, including retirees, students, and unemployed people, per day; the customers are used as test subjects for new hair colours.[35]

L'Oréal USA has its headquarters in New York City,[36] its New Jersey headquarters is in Berkeley Heights.[37]

[edit] See also

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[edit] References

  1. ^ a b c d e f g "Annual Report 2010". L'Oréal. http://www.loreal-finance.com/_docs/us/2010-annual-report/LOREAL-2010-AR-volume2.pdf. Retrieved 13 April2011. 
  2. ^ Jones, David (26 January 2010). "Nestle waits for market pressures to soften Hershey". Reuters. http://www.reuters.com/article/idUSTRE60P31A20100126. Retrieved 31 January 2010. 
  3. ^ "Statuts." L'Oréal. 16 April 2009. Retrieved on 3 May 2010.
  4. ^ 'Naturewatch Compassionate Shopping - L'Oreal fact file. Retrieved August 9, 2008. Archived June 2, 2008 at the Wayback Machine
  5. ^ ""L’Oréal’s fully supports the aim to eliminate animal testing"". Loreal.com. 2009-12-08. http://sustainabledevelopment09.loreal.com/pdf/topics/AnimalTesting.pdf. Retrieved 2012-02-01. 
  6. ^ 'In Close Up: Alternative Methods - L'Oreal Sustainability Report 2009 Retrieved February 1st, 2012.
  7. ^ "Anita's £652m sell-out", The Independent Published 18 March 2006. Accessed 8 May 2008.
  8. ^ http://www.loreal-finance.com/_docs/fichiers_contenu/0000000619/LAA52_juin2011_BAT_VGB_BD.pdf
  9. ^ http://sustainabledevelopment.loreal.com/innovation/safety-appraisal.asp
  10. ^ http://www.sustainabledevelopment.loreal.com/search/search-results.asp?zoom_query=animal+testing&zoom_page=1&zoom_per_page=10&zoom_and=0&zoom_sort=0
  11. ^ L'Oreal to build its largest factory worth $50m in Indonesia http://www.asianewsnet.net/home/news.php?id=17498&sec=2
  12. ^ a b "FORTUNE Global 500 2007: L'Oréal". Money.cnn.com. 2007-07-23. http://money.cnn.com/magazines/fortune/global500/2007/snapshots/6801.html. Retrieved 2010-07-31. 
  13. ^ "The European Student Barometer 2008". http://www.trendence.de/fileadmin/pdf/ESB_2008.pdf. 
  14. ^ UNESCO/L’ORÉAL Co-Sponsored Fellowships for Young Women in Life Sciences
  15. ^ Yanowitz v. L'Oréal USA, Inc., 36 Cal. 4th 1028 (2005).
  16. ^ "Wrinkle creams are a rip-off". The Daily Telegraph (Australia). 2007-05-07. http://www.news.com.au/entertainment/story/0,23663,21682971-36557,00.html. Retrieved 2007-07-20. 
  17. ^ "L'Oreal found guilty of racism". Sox First. http://www.soxfirst.com/50226711/loreal_found_guilty_of_racism.php. Retrieved 2010-07-31. 
  18. ^ "L'Oreal Tells Women of Color to Take a Hike - AfricaResource: The Place for Africa on the Net". AfricaResource. 2007-08-30. 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. Retrieved 2010-07-31. 
  19. ^ "L'Oréal (UK) Ltd". Asa.org.uk. 2007-07-25. http://www.asa.org.uk/asa/adjudications/Public/TF_ADJ_42910.htm. Retrieved 2010-07-31. 
  20. ^ "Britain bans airbrushed Julia Roberts make-up ad - CNN.com". CNN. 2011-07-29. http://edition.cnn.com/2011/WORLD/europe/07/28/airbrushed.advertisements.ban/index.html?&hpt=hp_c2. Retrieved 2011-07-29. 
  21. ^ http://www.forbes.com/2005/03/18/cz_sh_0318oreal_bill05.html
  22. ^ http://www.time.com/time/magazine/article/0,9171,157348,00.html
  23. ^ http://www.telegraph.co.uk/news/obituaries/1570119/Andre-Bettencourt.html
  24. ^ http://www.independent.co.uk/arts-entertainment/books/reviews/loreal-took-my-home-by-monica-waitzfelder-translated-by-peter-bush-432358.html
  25. ^ http://www.telegraph.co.uk/news/obituaries/1570119/Andre-Bettencourt.html
  26. ^ http://www.independent.co.uk/arts-entertainment/books/reviews/loreal-took-my-home-by-monica-waitzfelder-translated-by-peter-bush-432358.html
  27. ^ http://www.time.com/time/magazine/article/0,9171,157348,00.html
  28. ^ http://www.guardian.co.uk/world/2004/oct/13/secondworldwar.germany
  29. ^ http://www.guardian.co.uk/world/2004/oct/13/secondworldwar.germany
  30. ^ http://www.independent.co.uk/arts-entertainment/books/reviews/loreal-took-my-home-by-monica-waitzfelder-translated-by-peter-bush-432358.html
  31. ^ Biddle, Sam (2011-12-21). "All the Companies Supporting SOPA, the Awful Internet Censorship Law—and How to Contact Them". Gizmodo. http://gizmodo.com/5870241/presented-without-comment-every-single-company-supporting-sopa-the-awful-internet-censorship-law. Retrieved 31 December 2011. 
  32. ^ http://www.loreal.com/_en/_ww/brands-l-oreal.aspx
  33. ^ "World Presence." L'Oréal. Retrieved on 14 July 2010.
  34. ^ "2.000 salariés de L'Oréal à Clichy." Le Journal du Net. Retrieved on 7 July 2010. "Construit à la fin des années 1970 en briques et acier, le Centre Eugène Schueller se dresse à l'emplacement de l'ancienne usine Monsavon, à Clichy-la-Garenne dans les Hauts-de-Seine. Les salariés du siège de l'Oréal y ont emménagé à partir de 1978. Aujourd'hui, ils sont 1.400 à y travailler."
  35. ^ Klawitter, Nils. "L'Oréal's Great Bluff." Der Spiegel. 7 March 2005. 1. Retrieved on 27 November 2009.
  36. ^ Contact Us, L’Oréal USA corporate heaquarters
  37. ^ The Star-Ledger L'Oreal moves into 'second headquarters' in Berkeley Heights

[edit] External links

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