2,000 references per yearTaking full advantage of its two R&D and formulation laboratories (one in Paris specialized in beauty products, the other one in Los Angeles specialized in home fragrances) and of its three design studios (Paris, New York and Los Angeles), the group has won several new customers in 2011, in Europe and in the United States too: El Corte Inglés (3 complete lines of skincare, bath products and home fragrances), Superdry (a perfume), Galeries Lafayette (a range of bath products), Hunkemuller (a range of make-up products and perfumes), Decleor, Montblanc, Aldo, Hot Topic, Benefit, Juicy Couture, Ralph Lauren, Oscar de la Renta. Many line extensions were also carried out with the portfolio of existing clients: Zara, Nocibé, Women’s Secret, Sephora, L’Oréal, Payless, Victoria’s Secret, Kim Kardashian, etc.
In the end, the group produced more than 2,000 references in 2011, with an increase - in constant exchange rate - of 8% of its turnover over 2010. A growth which is lower than in previous years (in 2010 the turnover had increased by 30%) but, explains Julien Saada, co-founder and Chairman of the group, “profitability has been improved.” A somewhat battered profitability after the takeover in 2009 of two U.S. companies. “For the coming years, our goal is to return to 10-15% profit on equity,” emphasised Saada.
A new financial partner
But this will be achieved outside the stock market! The Maesa Group, which was listed in Paris on the Alternext market has, in fact, chosen to leave the stock market at the end of 2011 and to finance its growth with the help of a new financial partnership, namely, the company Edmond de Rothschild Investment Partner (EDRIP). In practice, the group’s actions were transferred to a holding (F&B Group) in which EDRIP has a minority stake of 11%.
“The stock market has not helped the group in its development, our acquisitions were made with bank loans,” explains Saada. So leaders at Maesa preferred to focus on their market and on the long-term growth of the group, rather than on the tedious communications imposed by financial market regulations.
Attract luxury brands
To achieve its growth and profitability targets, Maesa of course intends to strengthen itself on the market that made its success: the creation of complete and tailored lines for retail chains, often not familiar with the cosmetic world. And this logically implies winning new customers and developing existing accounts.
On this front, the year 2012 has started rather well since the first half should see the launch of the first creations designed for Marks & Spencer, Next, and Kruidvat (with the first fragrance under its own name for the group) in Europe, or for Kohl’s in the States United, who previously used to entrusted the develop its own brand to Estee Lauder. “We have about 80 customers worldwide in the distribution sector, is a lot but there is still some room for further growth,” believes Saada.
Plans are also underway with Zara, Nocibé, or Superdry in Europe, with Payless, Kim Kardashian and L’Oréal in the United States.
But the group also wants to attract new luxury brands and reinforce its full-service activity on this market. Indeed, in addition to their packaging and their promotions, brands do not hesitate to entrust Maesa with the developments of whole segments. “This is a general trend, believes Saada, competitive pressure is forcing brands to concentrate their resources on marketing, operational activities and distribution, which leads to a relative decrease in investments dedicated to development. But as they also have the obligation to market still more products to remain competitive, they rely on external partners.”
A market which, compared to retail, has three advantages, namely of high added value, of a lesser dependence to economic conditions, and of potentially larger volumes, but where the group must face a much more intense competitive pressure.
Maesa has therefore redeployed its sales force in the United States and Europe and created a Commercial & Marketing Management specialised in luxury brands, headed by Sophie Thiolas. The group is also betting on both the innovation capacity of its design studio (6 people in Paris and a new tool for 3D creation capable of displaying products in a real situation in a context of final merchandising) and on its R&D laboratory in Paris, with a regulatory service and a constant monitoring of new ingredients and new textures.
However, no geographical expansion has been planned in the short or medium term, Maesa wanting to focus on its European and American customers. “But it is clear that China and Brazil have a strong potential which could be of interest to Maesa,” concluded Saada.