Interview: New L’OCCITANE Group leadership aims to drive growth built on sustainability

Introduction: Over recent months, French nature- and sustainability-inspired premium beauty house L’OCCITANE Group has made two key leadership changes at group and travel retail level, in both cases involving executives well-known in the travel retail community.

Newly appointed Group Managing Director Laurent Marteau brings more than 20 years of beauty sector experience to his role, having spent 14 years with Parfums Dior and then LVMH Fragrance Brands before joining La Prairie in 2014 as Vice President for Global Travel Retail and Special Channels. He became a Board Member in the same year and was later promoted to Vice President of Europe, the Americas, Middle East and Africa.

Estelle de Bure, named as Managing Director, Global Travel Retail on 1 July, also has long experience in the travel retail and beauty sectors. Prior to joining L’OCCITANE in 2010 and subsequently developing the Melvita brand and the group’s travel retail business in Asia Pacific, she held several senior positions at L’Oréal for 12 years.

The Moodie Davitt Report Founder & Chairman Martin Moodie caught up with Marteau and de Bure at the recent TFWA World Exhibition in Cannes to see how they were settling into their new roles and find out about their burning priorities.

Martin Moodie: Laurent, you and I go back a long way, so I know of your successful career in the beauty business. Now you have a whole new challenge in front of you. How are you finding the role and what are your early priorities?

Laurent Marteau (LM): I’m very excited. It’s a beautiful group, I have to say. Firstly, we have solid values – for example our approach to sustainability – and that was the main reason for me joining. These are true values that have existed since the early days of the group and of the brands. What is nice is that all the acquisitions we’ve made also follow the same ethos, the same strategy. We want all the group’s brands to be really sustainable in the future.

The second thing – and you know of Reinold Geiger [Chairman, Executive Director and controlling shareholder] and André Hoffmann [Executive Director, Vice-Chairman and Chief Executive Officer – is the entrepreneurship which is behind this group. From small beginnings, it has become what it is today and has also acquired several new vibrant and innovative brands of late.

They include Sol de Janeiro, number one in Sephora in the US; Grown Alchemist from Melbourne, a ground-breaking brand with tremendous potential. ELEMIS, which we are starting to develop, expanding its worldwide footprint from its initial legacy markets in the UK; Erborian, which is booming on the French market. I saw the potential of the group and the dynamism of the entrepreneurship behind it. We have many more projects to come, which I’m very motivated about as well.

The third thing is the positioning of the L’OCCITANE en Provence brand. Looking at some of the performances in Asia, in particular, I was really impressed. So I am thrilled to be here, to discover a new team and a new organisation. That’s what my first month has been about – meeting the TR teams, the local market teams and the export teams.

My first days are about going to see everyone. So you see me in Cannes this week, but I will be in the Middle East next week, and then I’m going to do a tour of Europe. I’m doing a month in Asia to see all our teams and countries there and then I will finish with the Americas. I really want to have visited all the teams in the organisation within three or four months. I want to understand how the organisation and the dynamic works and meet with people, which is important for me.

So that’s my first 120 days programme. In terms of priorities, it’s still early days, but there are a few key ones. We have phenomenal brands in our portfolio that we need people to know about. You have been a strong promoter about what we do in terms of sustainability so we have started to communicate more about that.

We are so advanced in sustainability. My first days in the company were in Manosque [L’OCCITANE en Provence’s birthplace, a town and commune in the Alpes-de-Haute-Provence department of southeastern France] and what I’ve seen in terms of our relationship with the suppliers and our laboratories is hugely impressive. We do beautiful things so I want this to be known about further.

You mentioned the multiple acquisitions of recent times. What’s your approach in terms of integration?

LM: In recent years the Group has accelerated its transformation into a multi-brand and geographically balanced group. So I’d say there is a big job in creating this melting pot and creating a group culture. This will be one of my first important tasks – acting as a facilitator, a coordinator and supporting the brands. I’m really hoping to be able to support the full development of the group.

Travel retail and ecommerce will also be an important focus. Travel retail is still quite small for the group, far too small. So we have big ambitions to grow it further.

Single digit?

LM: Yes, it’s a single-digit percentage of total sales. Coming from other leading groups, you can imagine that I have bigger ambitions than that, as does our group. Also, a lot of the new brands are not in travel retail today, so one of the main objectives of Cannes this week was to present them.

We had fantastic feedback because they all loved our new acquisitions, in particular Sol de Janeiro, Grown Alchemist and Elemis, which has been a leading actor in the British market for years. So, making the brands and the group better known and then facilitating the whole organisation is what I want to focus on to start with.

Obviously over the coming months I will have more of a grasp on what we can do. But with L’OCCITANE en Provence, we need to step up the pace in travel retail.

We also have excellent products in face care and hair care, and this will also be a big focus for me to support the group on their development. I think we can really improve on that part of the business.

Travel retail rebound strong as L’OCCITANE Group resists global headwinds L’OCCITANE Group, listed on The Stock Exchange of Hong Kong, turned in an encouraging second-quarter performance for the period ended 30 September 2022. This helped drive first-half sales growth of +16.1% (+5.9% like-for-like), “proving ongoing resilience in the face of global headwinds”, the group said. All regions delivered H1 growth, powered by a +59.8% rise in the Americas Q2 sales growth accelerated to +24.9% at reported rates or +16.2% on a constant basis, thanks to what the group called its “dynamic new brands”, a rebound in travel retail and distribution and foreign currency exchange tailwinds. The situation in China, the Group’s largest market in APAC (it accounted for 13.0% of overall H1 sales), also improved in Q2 with like-for-like growth of +6.7% over the same period a year earlier. All key brands posted growth in FY2023 H1, with major contributions from Sol de Janeiro, Elemis and L’OCCITANE en Provence (+9.4% at reported rates and +3.4% constant). Travel retail rebounded stronger and earlier than planned, the group said. Vice-Chairman & Chief Executive Officer André Hoffmann said, “Despite a worsening of the global macroeconomic environment in FY2023 Q2, including persistent inflation, increasing interest rates and muted consumer sentiment in some markets, it is pleasing to see a further acceleration in top-line growth, both on an actual and like-for-like basis. This has strengthened our optimism about reaching our FY2023 targets.”

With acquisitions, the challenge is always how to maintain the values and the spirit that made them what they are – and made them attractive to you – and yet still grow them by bringing the resource and skill set that a bigger group offers. How do you balance that?

LM: It’s a challenge but honestly it’s also a big opportunity because the founders are still part of the companies. This is probably one of the group’s strengths – we’re not trying to integrate and then let the founders go.

If you take this week in Cannes, we had Heela Yang, who is the Co-founder of Sol de Janeiro.  Noella Gabriel, one of the Co-founders of ELEMIS, was also here with us. One of the group’s strengths is that we really try to keep the brands independent, though maybe in the past too independent.

I think it’s a matter of just finding the right balance, of giving the autonomy to the brands to continue developing, and thinking differently, without us wanting to do the same thing for all. They all have their own DNAs. They all have their different ways of working. For me, it’s a fantastic melting pot.

Sol de Janeiro is probably the number-one social selling brand in the US at the moment. They’re all over social media, all over TikTok. They have a special partnership with Amazon. They do things that I’ve never seen before in the industry and we are as a group learning from from each of our brands.

But also, L’OCCITANE en Provence has a fantastic retail network of more than 3,000 stores in the world. I don’t think any other brand [in our sector] has that number of retail stores worldwide. We can maximise the clients that are there in those stores, something that has been been under-used for the time being.

I give you another brand, Grown Alchemist, which is doing things completely differently with nutricosmetics. What I have really enjoyed so far is that each brand has been kept independent and autonomous in the way they think and in the way they develop their brand. So now I am here to facilitate and to coordinate, and to help maximise everything we do.

Exciting times for sure.

Laurent Marteau: Yes. I still have not come back down to earth but I am truly inspired. Each time I am introduced to something new there are like a million opportunities. For me that’s where the thrill is. It’s just amazing.

That’s a good segue to you, Estelle, because we heard travel retail’s internal share of your business is in single digits. We’ve also been through this horrible dark world for the last two and-a-half years or so. In stepping into the travel retail leadership shoes, how do you see the challenge, and how do you assess the state of the sector?

Estelle de Bure (EdB): I have been working in travel retail for Asia Pacific for the past six years. It has been tough lately, but at the same time Asia Pacific is still very dynamic. As you know, in Asia operators are very agile and entrepreneurial in finding new ways. So, immediately they really thought about new ways of doing business with our travellers. Hainan has been developed big time since right at the beginning of the pandemic.

Hainan has kept us very busy. So we took that opportunity. The Hainan business went from single digit to high double digit for L’OCCITANE [in terms of internal share of travel retail -Ed]. Before the pandemic, it was around 4% and it went up to 28% of the business.  I think this is what happened as well for most of the brands.

So during this period we have actually been very busy because L’OCCITANE is the number one sustainable brand. In partnership with CDFG, for example, we opened our first sustainable concept shop in Haitang Bay earlier this year.

Our shop is almost 100 percent sustainable. The floor comes from a recycled boat in China. All the tabletops were recycled glass and the plastic from L’OCCITANE products. All the chandeliers we used are from our bottles. We’ve been very, very active in Hainan. As well, we were one of the first houses who made a partnership with TerraCycle [the US recycling firm]. We’ve done HPPs with sustainable material and have been pushing a lot our refill items for haircare.

How are you reading Asia travel retail at the moment?

EdB: Super positive. In APAC, everything is opening completely, except [Mainland] China still. But the good news is that includes Hong Kong as well, where since 26 September there is no more quarantine. So this was a good sign.

Everyone is kind of guessing in terms of when the Chinese will come back. But they will come back, we know that. So you will have that icing, as it were, on a good cake now. Because if you look at the Middle East, South America, North America and Europe, things look better. So outside of Asia, how are you seeing travel retail overall?

EdB: I see it very positively. Clearly business is back and everything is back on track. People are travelling as if COVID never existed, I would say. Revenge travelling, revenge buying. We met our operators, for example from Paris, and they were telling us that in July and August the business was back like before COVID. So those are very positive signs and we are very happy that we are back on track.

There was some doubt before. Will people travel the same as before COVID? Will they be scared? Will they be more demanding in terms of hygiene and all of that? Actually, we have the answer. It’s no. As soon as the borders open, people will go back to travel. Even when the airfares are double or triple the price, they still want the freedom to travel again. And as soon as you travel, that means that you want to shop, especially for Asians.

Yes, people have been starved of the opportunity. But it’s not only that, I think. This pandemic has changed the world in many ways and one of the things it’s done is to emphasise the fragility of life, the temporariness of everything. So, I think, looking forward, people are not going to miss the opportunity to go to a wedding or to visit a loved one – simply because everything can be taken away so easily.

LM: Yes, we live our life now thinking maybe tomorrow will be different. For a lot of us, it’s been a new world.

In terms of this emergence from darkness, I would have imagined that in some ways for L’OCCITANE Group, the pandemic has been good. What are the values that are coming through as a result of the crisis? Wellbeing matters more than ever, I suspect, and people have been caring about their personal health, their personal wellbeing, a lot more.

LM: To be honest, we’re probably one of the groups which has been the least affected by the situation, simply because we have less dependency on Chinese customers than others. Because we have very strong local client bases everywhere, for example in England, the US and Japan.

That’s really helped us as a group and the pandemic has reinforced our values. The second thing is all the group’s values around sustainability have become even more important because so many people have started to think, “What do we want to bring to our next generations? What sort of world are we going to leave?” The pandemic helped on this as well. People are really thinking differently. And here again the group is perfectly equipped because that’s what we’ve been doing for years.

The last thing is from a people perspective. People want to live their lives. I’ve seen the fantastic energy this week of the industry being together, working together, spending time together. This was really nice to see.

Laurent, do you have a final message to the industry?

LM: Let’s stay positive. It’s through crisis that you learn a lot. Let’s remember what happened. This is key and let’s think how we can bring a better future for travel retail, for the industry, and for people. If we succeed to do that, I think we will do well.

I have to close with the most important question of all. Who will win the Rugby World Cup in France in 2022? And you’re on the record.

LM: I can only say France, Martin…

This interview just started to go wrong…

LM: It’s a big thing because the Irish team is also playing well. My kids are both French and Irish.

So you can be happy either way?

LM: Yes indeed.