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Companies & industry

LR Health & Beauty Systems reassert its double-digit growth target

The LR Health & Beauty Systems GmbH is the market leader for direct marketing of health and beauty products in Germany (multilevel marketing segment). The company operates 30 countries worldwide, and generated about 206 million euros of net sales in 2009, a rise by almost 10% compared to the previous fiscal year. Interview with Tilo Plöger, General Manager, LR Health & Beauty Systems

Premium Beauty News - How do you explain your success in such a difficult economic climate?

Tilo Plöger - The core businesses of LR are dietary supplements and cosmetics. In these segments LR presents itself as a retailer and a brand manufacturer with a great number of labels. In contrast to the classic trade business we don’t see any growth limits.

We define five factors of success.

  • First of all our product portfolio paired with the quality reputation of Made in Germany goods. We are the only network-company, which manufactures mostly all products in Germany and also our major suppliers are located here.
  • Secondly our portfolio international celebrities. We work closely with prominent people, we integrate them in our marketing concepts and they become an important part of it. LR and Coty are definitely the two companies which have the most celebrities under contract, especially in the range of perfumes.
  • Thirdly our marketing and commission plan. We cooperate with 300,000 partners, whom are paid by our incentive system. This incentive programme sets standards in the industry, and year by year we are able to motivate many new partners to get into the act and stick to it.
  • The fourth factor of success is our unique automobile concept, as a part of our incentive programme. Today, we have over 4,000 Volkswagen (Polo) and many hundreds of Mercedes Benz on the roads, and we could introduce Porsche in addition last year. Our car policy is a further point of successful implementation of the main principle Made in Germany that leads to an intense solidarity between our partners and LR.
  • Last but not least our sophisticated service and education concept. The training of our partners is a top priority and one of the important factors of success, too.

Premium Beauty News - What have been your more prominent product innovations over the past 2 years ?

Tilo Plöger - We operate as a brand manufacturer and concentrate on innovations and re-launches under the umbrella of our standard brands. Of course we continuously adapt and reposition our concepts in order to be better than the market benchmark.

First of all, let’s mention the launch of our new line of decorative cosmetics over the past two years. We expect to sell 10,000 to 15,000 units to our partners, this would turn LR into the largest retailer of decorative cosmetics in Europe.

Additionally, we have developed an all new perfume concept, not only on the qualitative scientific side in regard to a better scent adherence but also we can allocate scents to certain skin typologies and offer each costumer their optimal and tailor-made perfume.

Within the scope of our celebrity concept we have developed a high selective anti age skincare range of products for men with Marcus Schenkenberg.

Also, I want to note our Aloe Vera product innovations in the dietary supplement segment - a growth market par excellence.

In the coming weeks we will launch novel probiotic dietary supplements (two patents) with support of high reputed and internationally known Prof. Dr. Clancy. Furthermore, we have redesigned the whole dietary segment (concepts and formulations).

Premium Beauty News - How does an increased ecological awareness and health consciousness impact your strategy?

Tilo Plöger - Our core business is health and beauty from the in- and outside, and that’s why for us an increased ecological awareness and health consciousness is essential.

We benefit from our ability to quickly readjust and optimize products very promptly. Within 18 months we remove parabens and mineral oils from all our products. Without time delay we formulate and bottle our perfumes according to the latest IFRA-guidelines. Moreover, we accomplish very strict safety assessments and tests to exclude possible cutaneous reactions and allergies.

Health concerns and harmlessness of our products are our key priorities prior to ecological awareness. We recently begun to focus on improving the sustainability of our packaging. In this matter, there are different opinions about what’s environment-friendly and what’s not.

Our distribution channels allow us to go almost completely without secondary packaging.

Watching packaging trends closely, we differentiate on price segments. Relating to the higher price segment we can specifically work on themes like biological degradability, carbon footprint and so on.

Premium Beauty News - What about LR in France?

Tilo Plöger - With more than 25 % of growth in 2009, LR in France becomes a major actor of the direct selling industry. With new ranges of colour cosmetics and make-up, LR completely matches to the expectation of the French customer and French trend; for instance with the new men skincare range, “M. Schenkenberg”.

France stays the country of fashion and beauty. LR is well positioning, offering as for perfume or for cosmetic middle range products but also high range products. Those can be really compared to high range products sold in the French market from high fashion houses.

On the other side, the natural aspect of the product is more and more important for the French consumer today; certainly with few years late compared to Germany. This is in fact a real advantage for LR in France, because we can immediately offer high quality natural and health care products. Here we can take profit of the 25 years of experience and success of LR in Germany.

In the next five years, LR in France will become a real reference in the direct selling industry.

Premium Beauty News - Please, give us an economic prospect. What do you expect from LR the upcoming 2-3 years.

Tilo Plöger - Today, we operate in about 30 countries worldwide and it is assumed that we develop one new country annually.

We can anticipate - compared to our positioning in the competitive environment - a respectable two-digit growth in sales yearly. We achieved a 20 to 25 % growth the past months and expect a comparably growth rate in the future.

Those challenging targets are supported by a full pipeline of innovations until the end of 2011. Additionally, we will expand existing product groups. As said before, we don’t see any growth limits. Mainly in the dietary supplement segment the needs of customers will continue to rise to buy well explained alternatives to classic pharmaceutical health care products. Our distribution channels guarantee and include detailed explanations of our products. This service can’t be fulfilled by the classic trade business. Furthermore we think about to get in new branches of businesses which fit in LR.

Interview by Dr. Kerstin Lötzerich-Bernhard (March/April 2010)

© 2010 - Premium Beauty News - www.premiumbeautynews.com
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