 The L'Oreal Group is the world's largest cosmetics and beauty company and is headquartered in the Paris suburb of Clichy, France. L'Oreal has developed activities in the field of cosmetics, concentrating on hair color, skin care, sun protection, make-up, perfumes and hair care. L'Oreal is active in the dermatological and pharmaceutical fields. L'Oreal is also the top nanotechnology patent-holder in the United States.
L'Oreal is a listed company, but the founder's daughter Liliane Bettencourt, who is one of the richest people in the world, and the Swiss food company Nestle each control over a quarter of the shares and voting rights.
History
In 1907, Eugène Schueller, a young French chemist, developed an innovative hair-color formula. He called his improved hair dye Aureole. With that, the history of L'Oreal began. Eugène Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers.
In 1909, Schueller registered his company, the Societe Française de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France"), the future L'Oreal. The guiding principles of the company that would become L'Oreal were put into place from the start: research and innovation in the interest of beauty.
During the early twentieth century, Schueller provided financial support and held meetings for La Cagoule at L'Oreal headquarters. La Cagoule was a violent French fascist-leaning and anti-communist group. L'Oreal hired several members of the group as executives after World War II.
In 1920, the small company employed three chemists. By 1950, the research teams were 100 strong; that number reached 1,000 by 1984 and is nearly 2,000 today.
L'Oreal got its start in the hair-color business, but the company soon branched out into other cleansing and beauty products. L'Oreal now markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair color, permanents, styling aids, body and skin care, cleansers and fragrances. They are found in all distribution channels, from hair salons and perfumeries to hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.
L'Oreal has five worldwide research and development centers: two in France: Aulnay and Chevilly; one in the U.S.: Clark, New Jersey; one in Japan: Kawasaki, Kanagawa Prefecture; and in 2005, one was established in China, Shanghai.
L'Oreal purchased Synthelabo in 1973 to pursue its ambitions in the pharmaceutical field. Synthelabo merged with Sanofi in 1999 to become Sanofi-Synthelabo. Sanofi-Synthelabo merged with Aventis in 2004 to become Sanofi-Aventis.
On 17 March 2006 L'Oreal made a ÂŁ652 million agreed takeover of ethical cosmetics company The Body Shop.
L'Oreal has been widely criticized for testing products on animals as recently as the late 90's. Additionally, the company has recently faced discrimination lawsuits in France related to the hiring of spokesmodels. In the UK L'Oreal has faced widespread condemnation from OFCOM regarding truth in their advertising and marketing campaigns concerning the product performance of their mascara brand. Multiple video parodies of their advertising campaigns have spoofed their products and can be viewed on You Tube - search L'Unreal for links to content.
L'Oreals history has just been exposed in a bestseller by Monica Waitzfelder published in French as 'L'Oreal a pris ma maison' and English as 'L'Oreal stole my home'. The book details how L'Oreal, a notoriously anti-Semitic company historically, took over the Waitzfelder home in the German city of Karlsruhe (after the Nazis had engineered the removal of the family) to make it its German headquarters. Waitzfelder has run a life-long battle through the French courts to try to get compensation — the case is now to come before the European Court of Human Rights.
L'Oreal's famous advertising slogan is "Because I'm worth it". It has recently been replaced by "Because you're worth it" and, currently, "You're worth it". For mens product, they use "Because you're worth it too!", and the L'Oreal Kids range has the slogan "Because we're worth it too!"
Board of directors
Current members of the board of directors of L'Oreal are: Francisco Basco, Werner Bauer, Liliane Bettencourt, Peter Brabeck-Letmathe, Jean-Louis Dumas, Xavier Fontanet, Bernard Kasriel, Marc Lacharrière, Françoise Meyers, Jean-Pierre Meyerss Schweitzer.
Management committee
The management committee includes:- Jean Paul Agon, Chief Executive Officer.
- Sir Lindsay Owen-Jones, Chairman of the Board of Directors.
- Beatrice Dautresme, EVP of Strategic Business Development.
- Jean-François Grollier, EVP of Research and Development.
- Marcel Lafforgue, EVP of Production.
- Christian Mulliez, VP of Finances.
- Jean-Jacques Lebel, President of Professional Products.
- Patrick Rabain, President of Consumer Products.
- Geoff Skingsley, EVP of Human Resources.
- Marc Menesguen, President of Luxury Products.
Stockholders- Breakdown of share ownership: 27.5% by the Bettencourt Family, 26.4% by Nestle, 3.9% treasury shares, and the remaining 42.2% are publicly traded.
- Voting rights distribution: 28.6% to the Bettencourt Family, 27.5% to Nestle, and 43.9% to the public.
Earnings
In 2003, L'Oreal announced its 19th consecutive year of double-digit growth. Its consolidated sales was €14.029 bn and net profit was €1.653 bn. 96.7% of sales derived from cosmetic activities and 2.5% from dermatological activities. L'Oreal has operations in over 130 countries, employing 50,500 people, 24% of which work in France. 3.3% of consolidated sales is invested in research and development, which accounts for 2,900 of its employees. In 2003, it applied for 515 patents. It operates 42 manufacturing plants throughout the world, which employ 14,000 people.- Cosmetics sales by division breakdown: 54.8% from consumer products at €7.506 bn, 25.1% from luxury products at €3.441 bn, 13.9% from professional products at €1.9 bn, and 5.5% from active cosmetics at €0.749 bn.
- Cosmetic sales by geographic zone breakdown: 52.7% from Western Europe at €7.221 bn, 27.6% from North America at €3.784 bn, 19.7% from rest of the world at €2.699 bn.
Joint ventures and minority interests
L'Oreal holds 10.41% of the shares of Sanofi-Aventis, the world's number 3 and Europe's number 1 pharmaceutical company. The Laboratoires Inneov is a joint venture in nutritional cosmetics between L'Oreal and Nestle; they draw on L'Oreal's knowledge in the fields of nutrition and food safety. Galderma is another joint venture in dermatology between L'Oreal and Nestle.
Community involvement & awards
In 2007, L'Oreal's Canadian division was named one of Canada's Top 100 Employers, as published in Maclean's magazine, the only cosmetics manufacturing company to receive this honour.
Brands
Brands are categorized by their targeted markets, which are mass market, professional, luxury, and active.
False claims in advertising and litigation for racial discrimination
In May 2007, L'Oreal was one of several cosmetic manufacturers ordered by the Therapeutic Goods Administration in Australia to withdraw advertising regarding the wrinkle removal capabilities of their products.
In July 2007, the Garnier division and an external employment agency were fined €30,000 for recruitment practices that excluded non-white women from promoting its shampoo, "Fructis Style". L'Oreal is reported as saying the decision was "incomprehensible", and will challenge the measure in court.
In July 2007, the British Advertising Standards Authority rapped L'Oreal for a television advert on its “Telescopic” mascara, featuring Penelope Cruz, stating it will make your eyelashes 60% longer. In fact, it only made the lashes look 60% bigger, by separating and thickening at the roots and by thickening the tips of the lashes. They also failed to state that the model was wearing false eyelashes.
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