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“We want Brazil to be our second market,” Anna Chaia, (L’Occitane Brazil)

L’Occitane entered Brazil in 1995 through a distributor and since Agust 2009 the company has been operating in the country through its own subsidiary. Sales in Brazil totalled 102 million Brazilian reals (R$) in 2009 and are expected to grow by 30 or 40% per year to reach R$ 500 million within three years (223 million euros). To date, Brazil is the world’s fifth market for L’Occitane, which global turnover is about 700 million euros. An interview with Anna Chaia, President of L’Occitane in Brazil.

Anna Chaia, L’Occitane

Anna Chaia, L’Occitane

Premium Beauty News - What are your expectations regarding the development of L’Occitane’s business on the Brazilian market?

Anna Chaia - By July we opened 10 stores in Brazil, where we are now totalling 55 stores (15 franchises and 35 own), but by the end of our fiscal year in March 2011, we will have 70 stores.

Our goal is to triple the size of the company in Brazil within 2-4 years. We’re more accessible than Dior or Clinique but more expensive than Natura and Boticario. Actually, we hardly have any direct competitor. We’re accelerating our investment in the country, hence demonstrating that we really believe in Brazil.

Premium Beauty News - In contrast with the recent downturns of the European and US markets, Brazil showed a double-digit growth rate in 2009. Does that mean your company will heavily invest on this market?

Anna Chaia - Yes. We will begin investing in the team – in particular in the management and in store staff training. We recently moved our office in Sao Paulo, which has a training centre for our stores. Additionally, about 80% of the leadership team was renewed.

The second important investment will be in the media, mainly printed media, both magazines and newspapers. We have selected Ogilvy to be our partnering media agency in Brazil.

Premium Beauty News - Retail outlets are also receiving increased attention. What about your strategy in this area?

Anna Chaia - Today L’Occitane is targeting the A and B classes. Indeed we want to conquer the consumer of the B class in Brazil and our expansion plan is extending to secondary cities such as Londrina, Joinville, Caxias do Sul, Salvador, Campinas, with a third store, Belo Horizonte, where we have plans to open a third store too, Fortaleza, with the opening of a second store. We have opened or fifth store in Rio de Janeiro. Recently, we have reopened a new store at Sao Paulo’s Shopping Iguatemi, and we are about to inaugurate a store at Centre Norte, and another at Shopping Tambore.

In the coming years, we plan to open new retail channels through franchises and authorized stores, but also e-commerce and pharmacies. We are experiencing a high speed expansion pace.

Retail is our DNA, combined with the expertise in beauty. We have implemented a training program for or sales teams to offer a personalized service for customers of our 55 stores across the country. L’Occitane currently has the lowest rate in staff turnover (9%) in the retail business. Shop assistants and back-office staff benefit from career plans, as well as bonuses.

Premium Beauty News - In which Latin American countries does L’Occitane also operate?

Anna Chaia - As far as Latin America is concerned Brazil is our only subsidiary, and we work with distributors in Argentina, Colombia and Ecuador. The idea is that Brazil becomes our bridgehead for the southern cone, within the next 3-5 years.

Premium Beauty News - Is there any outlook for L’Occitane to build a factory in Brazil?

Anna Chaia - No. In the short term it is unlikely. The products are manufactured in Manosque, in Southern France. The ingredients come from the same region, and it is very difficult for the company to replicate this consistent structure. As a consequence, 100% of our products sold in Brazil are imported. Of course, we therefore have to pay customs tariffs, varying according to product categories.

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