Loreal

Company History:

L'Orйal, one of the largest companies in France, is the world's largest manufacturer of high-quality cosmetics and perfumes, producing such well-known brands as Lancфme, Ambre Solaire, and Cacharel. Its total sales are &Dollar;2.4 billion ahead of those of its closest competitor, Unilerver, an more than double those of Revlon and Shiseido. It boasts a world-wide distribution network as well as the industry's highest research-and-development budget and the largest cosmetological laboratories in the world.

L'Orйal's story begins in turn-of-the-century Paris, at a time when women of the demi-monde dyed their hair, their choice restricted to fiery red or coal black. In 1907, Eugиne Schueller, a young chemist, began to concoct the first synthetic hair dyes by night in his kitchen and sell them to hair salons in the morning under the brand name Aurйole. His strategy was successful; within two years he established the Sociйtй Francaise des Teintures Inoffensives pour Cheveux, which soon afterward became L'Orйal.

In 1912, the company extended its sales to Austria, Holland and Italy and by 1920 its products were available in a total of 17 countries, including the United States, Brazil, Chile, Peru, Equador, Bolivia, and the Soviet Union, and in the Far East. At this stage, L'Orйal consisted of three research chemists and ten sales representatives.

Schueller's timing had been singularly fortunate. The end of World War I was celebrated by the Jazz Age, when short hairstyles became fashionable, with a new emphasis on shape and color. By the end of the 1920s, there were 40,000 hair salons in France alone and L'Orйal's new products O'Cap, Imйdia Liquide, and Coloral captured the growing market. In 1928 the company made its first move toward diversification, purchasing the soap company Monsavon.

In the 1930s and 1940s, platinum-haired screen idols such as Jean Harlow and Mae West made blond hair especially popular and bleaches such as L'Orйal Blanc sold well. L'Orйal was quick to make use of both old and new media to promote its products. In 1933, Schueller commissioned famous artists of the time to design posters and also launched his own women's magazine, Votre Beautй. Dop, the first mass-market shampoo, was promoted through children's hair-lathering competitions at the highly popular French circuses and by 1938 L'Orйal was advertising its hair products with radio jingles.

During this period L'Orйal demonstrated its ability to meet new consumer demands. When the Front Populaire won the 1936 elections and introduced the first paid holidays for French workers, L'Orйal's Ambre Solaire was ready to capture the new market for suntan lotions. Meanwhile the company's sales network was expanding on both a national and an international scale. Products began to be sold through pharmacies and perfumers and new Italian, Belgian, and Danish subsidiaries were established between 1936 and 1937.

Even the outbreak of World War II in 1939 failed to curb the company's growth. At a time of strict rationing, women permed their hair and bought cosmetics to boost their morale. L'Orйal launched the first cold permanent wave product, Orйol, in 1945. At the same time the company continued to expand; by the end of the war there were 25 research chemists and distribution had been extended to the United Kingdom, Argentina, and Algeria.

During this period, Francois Dalle and Charles Zviak joined the group, both recruited by Monsavon at a time when the cosmetics industry held far less attraction for graduate chemical engineers than the atomic-energy or oil industries. Both men would play an important role in the company's future; by 1948, Dalle had already been appointed joint general manager of L'Orйal.

The consumer boom of the 1950s and the arrival of new blond screen idols Marilyn Monroe and Brigitte Bardot (originally a brunette) meant further expansion for L'Orйal. By 1950, a research-and-development team of 100 chemists had created further innovative products, including the first lightening tint, Imйdia D, introduced in 1951, and the first coloring shampoo, Colorelle, introduced in 1955, which answered an increasing demand for subtlety. The company advanced further into the field of skin care, entering into technological agreements with the company Vichy, in 1954. Vichy was to become part of the L'Orйal group in 1980.

Eugиne Schueller's promotional talents were recognized in 1953 when he was awarded an advertising Oscar. Schueller died in 1957 and Francois Dalle took over as chairman and CEO at 39 years of age.

The 1960s were years of revolution, both cultural and commercial. As music and fashion became increasingly teen-oriented, there was a growing interest in conserving--or simulating--youthful looks. At the same time hundreds of new boutiques, supermarkets, and chain stores sprang up to supply this rapidly growing market. L'Orйal made a growing commitment to capital investment. In 1960 a new research-and-production center was established in Aulnay-sous-Bois, bringing the number of research staff up to 300. In 1963 and 1964 the company opened new cosmetological and bacteriological facilities, evidence of a highly scientific approach to skin care. Another production unit, Soprocos, opened in St. Quentin in 1965, and over the decade new distribution outlets were established in Uruguay, Algeria, Canada, Mexico, and Peru. L'Orйal was listed on the French stock exchange in 1963, during a period of restructuring within the group. In 1962, owing to the boom in hair-product sales, L'Orйal sold Monsavon in order to concentrate on its core business. At the same time it bought the hair-hygiene specialist Cadoricin. In 1964 L'Orйal bought Jacques Fath perfumes and a year later Lancфme, thereby gaining a significant entry into the high-quality skin-care, make-up, and perfume market and gaining increased access to perfumery outlets. Garnier, a hair-product company, and Laboratoires d'Anglas were also added to the group. In 1968 the company took major stakes in Golden in the United Kingdom and in Ruby, a personal hygiene and household products manufacturer. In the same year, L'Orйal bought the fashion and perfumes house, Andrй Courrиges.

With increased resources and expertise, L'Orйal launched a number of successful products, many of which are market leaders to this day. These included the hair spray Elnett, Rйcital hair dyes, and the perfume Fidji. Fidji was launched under the Guy Laroche brand