Julien Saada - It is indeed a strategic course for us, but it is also the natural extension of our private labelling activity. When a retailer decides to launch his own brand, he may feel the need to create a brand which is different from his own retail brand. This is the case with Monoprix in France and the brand Elle, of DM in Germany with P2 Cosmetics or of Walgreens in the United States with Circa Color Cosmetics.
The difference between pure private labelling and creating an exclusive brand is that in the second case the brand belongs to us, which means we are the ones who invest in marketing and communication. It’s a whole new business model but it does not change our customer model. Each brand has its own unique and exclusive customer. Being able to offer exclusive brands simply enabled us to gain new customers. We are now managing seven exclusive brands and working towards their development. The Elle brand for example, will be launched at Sephora Spain, and we will launch early 2016, at Ulta in the United States, a very professional make-up brand bearing the name of a make-up artist.
The other consequence of the rise of exclusive brands in our activity is the growing share of the make-up category, which now represents 45% of our turnover, that is, as much as perfume. The remaining 10% consisting of the bath & body care and home fragrance category.
Premium Beauty News - Now that you have this brand management experience, are you not tempted to extend the adventure with a classic brand that you would propose to different retailers?
Julien Saada - No, we do not want to have a brand among others to offer our retailers, it isn’t our line of business. We strongly believe in a differentiated offer and our mission is to bring exclusivity to our clients, with products that can only be found in their stores.
Premium Beauty News - What are your growth prospects?
Julien Saada - In 2014 our growth reached 18%, with sharp rises in Europe (Elle, Habitat) and the Middle East, particularly in Dubai with Landmark, a retailer specialized in fashion, where our brand Elle is distributed and with the Kamal Osman Jamjoom Group, specialized in lingerie and beauty with the Nayomi and Mikyajy branded stores.
For 2015, our growth will benefit from the acquisition of P2 Cosmetics and we aim by 2020 to increase almost twofold our turnover, that is, an average 15% growth per year.
If we first focused our development on Europe and North America, we now plan to take a closer look into Asian markets, especially China.
Premium Beauty News - What are the circuits that will best support this ambition?
Julien Saada - For us, the most dynamic circuit is undoubtedly the one of drugstores, followed by supermarkets. This is where volumes are the highest. But we also work a lot with textile brands.
Premium Beauty News - And exclusive brands will be the main drivers of this growth?
Julien Saada - Not exclusively. We expect a balanced growth of our three business segments. Alongside exclusive brands, the private labelling activity represents about 27% of the Group’s turnover. It is our historical activity and we have acquired in this sector a know-how, recognized by our customers. We can not only develop products, but also propose the appropriate merchandising and advice to our customers, including for the composition of their ranges. We are also aiming to double our turnover in this sector by 2020.
The outsourcing activity, our third segment, is focused on beauty brands. We work with brands that entrust us with the development and production of lines that they do not have the time or inclination to develop internally. This allows them to diversify their activities, at an attractive cost. We will, for example, launch the bath & body line of the brand Artdeco.
Premium Beauty News - Given this important growth, do you plan to equip yourself with your own production tools?
Julien Saada - Since our inception we have made the choice of being a fabless company. No investment of this type is planned. Given the diversity of our productions we prefer working with a range of very reliable partners on several continents and with whom we have built a long term relationship.