Premium Beauty News - So obviously it was not a cyclical downturn. The nail polish market is experiencing a real structural crisis?
Jean-François Harpes - When the global markets for nail polish experience drops of 50% to 60% and with no real hope of significant recovery, we can indeed refer to it as a structural crisis. When you think about it, this is what happened to lipstick manufacturers about ten years ago with the arrival of lip-gloss.
Premium Beauty News - This must have been quite a challenge for your company which was almost only specialized in nail polish?
Jean-François Harpes - There is no mystery! The development of new product categories and, above all, the diversification of our portfolio, started 15 years ago, were two key elements that today allow us to maintain our growth momentum, to have our factories running at full capacity, to increase our investments in R&D and to cut down costs in order to remain competitive while ensuring our profitability. This is how we manage to overcome both cyclical and current structural market fluctuations.
Premium Beauty News - But all this would not have been possible if you had not made the right choices?
Jean-François Harpes - To achieve this, you must start by decrypting purchasing behaviors, which is not in the DNA of a sub-contractor. In a customer-driven approach, it is important to communicate with the end consumer as well. This analytical approach that combines panels, digital interactions and organoleptic analyzes allows us to get a global picture of polishes but also of the entire "nail" category, which includes nail polishes, semi-permanent formulas, water-based formulas, natural formulas, hybrid formulas and nail care. This approach allows us to allocate our resources to the most productive production units.
But, of course, innovation is obviously essential. In 2018, we filed no less than 15 patents for products directly related to consumer needs like, for example, next generation patented bio-sourced formulas free of traditional solvents and of scents which could be perceived as not user friendly, but also of water based formulas with optimized performances and of hybrid formulas developed thanks to the expertise in crosslinking of our "Gel Lacquers" production unit to offer holding power and shine, without forgetting of course, to continue the research work started some years ago on alternatives to nitrocellulose...
Premium Beauty News - You really played your card well by diversifying yourself in time?
Jean-François Harpes - Indeed, and this strategy is paying off today! For example, we expect a 25% increase this year for our Luxcos makeup entity, which allows us to broaden our offer to customers who see IL Cosmetics as a Group able to provide them with comprehensive solutions addressing their needs.
Note that, given our already very strong position on mascaras, we have been strengthening in recent months our product lines for the eyes and lips, complementing them with new references. For eye products, where we are already leaders in waterproof formulas, the aim is to offer a solution for each of the consumer profiles we identified, such as the development of high-performance Vegan formulas (both cream and waterproof), but also of products suiting sport addicts with perspiration resistant formulas, whatever the circumstances, and of easy to remove formulas for active women. For the latter we will showcase, at the upcoming MakeUp in Paris trade show, a new makeup removal technique developed and directly inspired from consumer needs. And of course, don’t forget that all our products will soon be supported and validated by consumer panels.
Premium Beauty News - This diversification necessarily involved industrial investments?
Jean-François Harpes - Absolutely! [Industrially speaking, we have modernized and expanded our production plant specialized in bulk makeup in Luxembourg by doubling its production capacity, while packaging operations for makeup products will start this summer in our unit located in Bulgaria (capacity of 100 million units). In total we have tripled our full-service packaging capacity.
Premium Beauty News - Your presence abroad, particularly in China, is indeed an ideal line of vision?
Jean-François Harpes - That’s right! Asian markets are often considered today as those who are influencing Western beauty. China for example, is the country with the biggest concentration of "Millennials", a consumer base, which is a key target today for all cosmetic payers. Being a leader in this market, allows us to anticipate future consumer needs on the European continent. Simply take the example of water-based polishes that already represent 20% to 30% of the Chinese market and which are slowly but surely gaining in importance in France.