‘I no longer age – I dye with L’Oréal.’
Shortly after I began researching this book, I started looking for a new place to live in Paris. As prices in the centre of town had climbed to dizzying heights over the previous decade, my wife and I began to look on the fringes of the city, for gentrifying areas where we might find an oldfashioned yet affordable apartment. We found the perfect place in Clichy, a cosmopolitan suburb – about 10 minutes by metro from Montmartre – made famous by the writer Henry Miller, who lived here in the 1930s and wrote a book about it called Quiet Days in Clichy.
For many Parisians, however, Clichy has an entirely different significance. It is home to the global headquarters of L’Oréal, the world’s largest cosmetics and beauty company, with sales of close to €18 billion a year. L’Oréal has facilities dotted all over the neighbourhood, but its main base is a glowering steel-clad building whose façade varies in shade from raven to brunette depending on the weather and the time of day. It is located on the ancient road to Montmartre, about five minutes away from where I’m writing this sentence.
Fate had led me almost to the front door of L’Oréal, but that did not mean I was going to get inside. The company guards its secrets closely. Its traditional wariness of the press – particularly the non-beauty press – was exacerbated in 2009 by a scandal that brought the personal life of its founder’s daughter, the fabulously wealthy octogenarian Liliane Bettencourt, directly into the glare of the media.
This was not the first time the less attractive side of the company had been exposed. Bettencourt’s father, Eugène Schueller, the man who created the French beauty factory, was by no means an uncontroversial figure. In the 1930s, he summed up his approach to marketing: ‘Tell people they’re disgusting, they don’t smell good and they’re not attractive’ (Bruno Abescat, La Saga des Bettencourt, quoted by Le Monde Diplomatique in June 2009).
The roots of L’Oréal
Schueller’s work ethic developed early. The son of boulangers-pâtissiers who had relocated to Paris from Alsace in 1871, he realized by the age of 10 that he needed to work hard at school, that he wanted to get a good job and that ‘the customer is always right’. As noted in Jacques Marseille’s centenary history of the company, L’Oréal 1909–2009, young Eugène’s greatest fear was that his hard-working parents would say of him, ‘He’s a lazy-bones!’
Little danger of that: Schueller worked part time at his parents’ patisserie right through school and his subsequent studies in chemistry, which took him to the Sorbonne. It was here that a hairdresser appeared one day with a problem for the students: how to dye greying hair in a long-lasting and convincing way? Challenged by his professor to find a solution, Schueller bent to the task. Although his first efforts were unsuccessful, he worked feverishly until he got the formula right. Finally he became so confident in his product that he applied for a patent and went into business.
His 1907 patent application stated that existing lead-based products, ‘aside from their toxicity, which has led to them being banned in several countries’, failed to deliver a consistent and enduring tint. Schueller insisted that his product was harmless and enabled the user to obtain a satisfactory colour, from blonde to black, via a single flacon. This transformation could be achieved instantaneously, in a matter of moments, or progressively over a few hours.
In other words, Schueller was convinced that he had invented the perfect synthetic hair dye.
Most accounts claim that he initially called it L’Auréale – inspired by a hairstyle that was itself a corruption of the word auréole, or ‘halo’ – but the company’s advertising archives show that by 1910 it was already being advertised as L’Oréal, ‘the best product currently known’, available for 2 francs 50.
Another ad depicts a young woman standing before the sinister ‘clock of time’. The copy reads: ‘I no longer age – I dye with L’Oréal.’
Like most beauty pioneers, Schueller got used to late nights and raw knuckles, fabricating his product in his small laboratory in the evening and slogging it around hairdressing salons during the day. Backed by an acquaintance – an accountant named Georges Spery, who so admired Schueller’s dynamism that he pumped the best part of his inheritance into the company – the young chemist hired a salesman and a demonstrator. The latter was said to have been ‘hairdresser to the Imperial court of Russia’, hinting at a talent for marketing bombast.
History was on Schueller’s side. In the early 1900s, France was hit by a wave of industrial and technical innovation that would bring with it automobiles, cinema, the popular press and – both driving and profiting from all these – mass advertising. The celebrity hairdresser Antoine noted in 1912 that, with the coming of the motor car, fashionable women were wearing their hair shorter. But as Jacques Marseille points out, even factory girls who cycled to work wanted to look as pretty as the women in the illustrated magazines. And Eugène Schueller, the son of humble bakers, who regularly pounded the streets in search of new clients, saw no reason why they should not.
Schueller’s success depended on a two-pronged strategy: a close relationship with salon owners and hairdressers, and marketing that posited hair styling as a vital component of fashion. As early as 1909, Schueller had a column in the newly launched trade magazine La Coiffure de Paris, in which he promised to respond to all questions concerning hair-tinting techniques. In 1923 he went a step further by launching his own trade magazine, L’Oréal Bulletin, which kept salons up to date with the company’s latest products. On the consumer front, he launched L’Oréal Humoristique in 1925 – designed to be distributed and read in salons – followed by a fully fledged women’s magazine called Votre Beauté in 1933.
For his advertisements, Schueller worked with fashionable illustrators and photographers such as Herbert Libiszewski and Harry Meerson, whose work emphasized the artistry of the perfect hairstyle. As is often the case in the beauty industry, Hollywood lent a helping hand: when Jean Harlow appeared in the 1931 film Platinum Blonde, the demand for bottled glamour hit an all-time high. Fortunately, L’Oréal had launched an even faster-acting product, Imédia, a couple of years earlier.
The company was sensitive to fashion in other ways, too. It had already begun diversifying in 1928 with the acquisition of the soap company Monsavon. Now it was ready for a more radical innovation. Noting that sun-tanned skin had become all the rage, Schueller set his small research team to work devising a lotion that would enable its users to tan evenly without burning. Ambre Solaire was launched, as Geoffrey Jones observes, ‘just in time for the summer vacations’ in 1935.
Gradually, L’Oréal had begun to modify the grooming habits and appearance of its customers. Another revolution came with the launch of a mass-market shampoo named Dop in 1934. This may not seem particularly ground-breaking, but in Eugène Schueller’s time hairdressers made up their own shampoo by mixing soap and soda crystals in hot water. The result was a white liquid in which tiny fragments of soap drifted like snowflakes. Schueller had noticed that, when he emerged from the hairdresser, his hair was ‘practically as dirty as it was before the shampooing’. In Germany, chemist and perfumer Hans Schwarzkopf had begun experimenting with powder shampoos in 1908, but these were still based on soap, and the result was the same matt effect. Although Schwarzkopf is credited with popularizing the word ‘shampoo’ – it derives from the Hindi champo, meaning ‘to massage’ – he did not launch a successful non-alkaline product until 1933.
Dop sprang from Schueller’s theory that washing hair was like washing any other kind of fibre. He sought advice from a chemist who specialized in treating textiles. The result was a cleaning solution based on alcohol sulphates, which did not leave a soapy residue: in fact, it left hair shiny and soft. Schueller patented the product under the name Dopal, which he put on the market as Dop. By 1938, L’Oréal was selling three formulas of Dop: for normal hair, for greying hair and for children. This was extremely avantgarde in a period when it was still considered unnecessary to wash one’s hair more than once a week.
Schueller himself explained the problem to his sales people. ‘There are 43 million people in France. Let’s imagine that those 43 million people washed their hair once a week. We would sell 20 times the number of units that we sell at the moment.’
In order to reach this dream target, Schueller advertised his product aggressively. Alongside traditional print media, billboards and bus-sides, he turned to the emerging medium of radio, saturating the airwaves with jingles. He also organized hair-washing competitions for children at circuses. Dop was everywhere.
As a businessman, Eugène Schueller was building an empire of hair dye, soap suds and shampoo.
Politically, however, he was far from squeaky clean.
A dirty war
In the economic turmoil and mounting political tension of the late 1930s, a number of French politicians and businessmen felt that appeasing Hitler might be the only way of saving their country from ruin, as well as securing their own financial futures.
While the full extent of his involvement has never been established, Schueller hovered on the fringes of an extreme right-wing group known as La Cagoule (or ‘The Cowl’). Founded by former artillery officer Eugène Deloncle, the Secret Committee of Revolutionary Action, to give it its official name, vowed to fight for ‘the national and economic recovery of the country’ against all those who opposed its aims. Ideally, this meant overthrowing the government.
It may have sounded like a conspiracy from one of the pulp paperbacks that were popular at the time, but La Cagoule was both real and lethal. Towards the end of the 1930s it carried out a number of assassinations, including that of the Soviet banker and freemason Dimitri Navachine and the anti- Fascist Italian journalist Carlo Rosselli and his brother Sabatino (in return for a cache of 100 Beretta machine pistols from the Italian secret service). The group also bombed two buildings in Paris owned by a metalworkers’ union in a bid to frame the French Communist party. Organized more like a private army than a political organization, it possessed a formidable arsenal (‘La Cagoule tombe le masque’, Historia magazine, 1 June 2007). In October 1941, its members blew up seven synagogues.
According to Jacques Marseille in his history of L’Oréal, Eugène Schueller was familiar with a number of ‘Cagoulards’. Following the fall of France in 1940, he helped to finance Deloncle’s next group, Le Mouvement Social-Révolutionnaire (The Social Revolutionary Movement), whose aim was to ‘construct a new Europe with the cooperation of Germany and all other nations free, like her, of liberal capitalism, Judaism, Bolshevism and Freemasonry’. This time Schueller’s name appeared for all to see on the group’s posters and political tracts – alongside that of Jacques Corrèze, Deloncle’s secretary, who would later become chairman of L’Oréal’s American operations (‘Jacques Corrèze, L’Oréal official and Nazi collaborator, dies at 79’, New York Times, 28 June 1991).
After the war, Schueller was called before a committee set up to identify collaborators. During the inquiry, a different view of his wartime activities was proposed. It appeared that, in the fog and ambiguity of the years before and immediately after the Occupation, Schueller had allied himself with those he felt best placed to help him advance his economic theories – notably the ‘proportional salary’, in which workers would be paid according to their contribution to the bottom line. By 1942, he had distanced himself from Deloncle. He was later active in the Resistance, helping people escape Nazi work camps and assisting Jews in their flight to the unoccupied zone.
The committee also found that products sold to the occupier between July 1940 and August 1944 represented only 2.5 per cent of L’Oréal’s total sales, and 12.5 per cent of Monsavon’s.
In 1947, the committee cleared Schueller’s name. He had behaved imprudently, the record stated, but his later acts of patriotism showed that he was no collaborator. The stain on his reputation had been scrubbed away – almost. Its dark traces were to resurface long after his death.
After Schueller – from Lancôme to Nestlé
In 1952, Eugène Schueller accepted ‘the Oscar for Advertising’ from a French advertising industry association. The following year, a group of cinema advertising sales houses would launch another awards scheme, the Lions, which has since become the international reference in creative advertising circles. But for the time being, this odd Gallic Oscar was the greatest accolade a French marketer could hope for.
Schueller himself knew that the French were ambivalent about advertising. The general consensus, he admitted, was that advertising enabled companies ‘to sell cheap products at higher prices’. He believed the opposite was true. Advertising, he argued, kept consumers informed about life-improving innovations and boosted the income that drove research into even more effective products. It stood to reason that L’Oréal’s advertising balanced images of beauty with explanations of the science behind the glamour.
When Schueller died at the age of 76 in 1957, his seat at the head of L’Oréal was filled by François Dalle, who had joined the accounts department of Monsavon in 1942 and risen through the ranks to become managing director. Dalle himself had a somewhat ambiguous relationship with advertising. ‘I would consider it very dangerous if the perception of a company was driven more by its advertising than by its products,’ he commented. Like Schueller, he believed L’Oréal’s core mission was one of research and innovation, the results of which would fuel its marketing initiatives.
Dalle’s theory was seemingly corroborated in 1962 with the launch of the hairspray Elnett. Thanks once again to the cinema – especially the artfully tousled locks of Brigitte Bardot – French women’s hairdos were becoming harder to manage without the help of an on-set stylist. Something was needed to fix them in place, and Elnett did the job splendidly. This was the first time women had access to a product that held their hair without, as Jacques Marseille puts it, ‘giving it the aspect of cardboard’. Advertising was minimal, but word of mouth more than made up for it: soon Elnett had grabbed 28 per cent of the French hair lacquer market. The fact that L’Oréal’s researchers had distributed the product to colleagues, friends and family for testing no doubt contributed to this phenomenon.
Thus Dalle began what was to be an almost 30-year run at the top of L’Oréal. He was aided behind the scenes by Eugène Schueller’s daughter, Liliane, who had married the politician André Bettencourt (a friend of her father’s, with a similarly ambiguous political past) in 1950. Dalle was responsible for many of the initiatives that laid the foundations for L’Oréal’s evolution into a global titan. Take, for example, the acquisition of Lancôme.
Armand Petitjean had created the brand in 1935, its name inspired by the wild roses he’d seen growing around the Château de Lancosme in the Indre region of France. Petitjean had lived at least three lives before then: as an exporter of European products to Latin America, as an adviser on Latin America to the Foreign Ministry during the First World War, and as an executive of the fragrance company Coty. These experiences had bred within Petitjean a desire to share French elegance with the rest of the world. To help him he handpicked a crack team from Coty, including the d’Ornano brothers – skilled salesmen – and the bottle designer Georges Delhomme.
He launched his first five fragrances (Tendre Nuit, Bocages, Conquête, Kypre and Tropiques) at that year’s Universal Exhibition in Brussels, where he was awarded a prize for innovation. Meanwhile, this aspiring ambassador of luxury established a small factory in a space previously devoted, appropriately enough, to the manufacture of artificial pearls. He also opened a boutique in the prestigious rue du Faubourg Saint Honoré.
Working with a horse veterinarian, Petitjean developed a skin cream containing a 4 per cent solution of horse serum, an antitoxin derived from the blood of horses and commonly used in vaccinations. An advertisement from the 1950s described Nutrix as ‘a miracle cream… the guardian angel of your skin’. It’s said that the British Ministry of Defence even recommended it as a potential defence against the effects of exposure to nuclear radiation (‘Il était une fois Lancôme’, www.joyce.fr, 2008).
Instinctively, Petitjean preferred word-of-mouth marketing to traditional advertising – a considerable irony given that Lancôme is now one of the world’s most aggressive cosmetics advertisers, having recruited celebrity endorsers such as Isabella Rossellini, Juliette Binoche, Uma Thurman, Kate Winslet and Julia Roberts, among many others.
Petitjean’s rigid perfectionism was to determine the company’s future. In 1937 he had launched a soft, luxurious and highly successful lipstick called Rose de France, which made ‘lips shine like those of a child’. Lancôme’s lipstick tubes were works of art, plated with silver or gold. But by the 1960s, fashion was veering toward cheap disposable plastic lipstick cases. Petitjean recoiled at them in horror, unable to believe women would want to carry such monstrosities in their handbags. Drifting out of touch with consumer trends, Lancôme experienced a dramatic sales slump.
In 1964, a white knight appeared in the form of L’Oréal and François Dalle. Petitjean agreed to the acquisition offer – provided L’Oréal did not betray the luxury heritage of his brand. L’Oréal had no intention of doing so. In fact, it used Lancôme to reposition itself as a purveyor of luxury beauty products. As if to mark the dawn of an upmarket new era, it sold off Monsavon that same year.
The sixties obsession with youth was bound to be helpful to a company like L’Oréal. Taking advantage of a flourishing market for beauty products, it opened an enlarged research and production facility. Alongside Lancôme, it added the luxury brands Jacques Fath and André Courrèges to its roster, as well as the hair care company Garnier. It stepped up its international expansion, creating distribution arms in Algeria, Canada, Mexico, Peru and Uruguay.
Although L’Oréal had gone public in 1963, Liliane Bettencourt was still its majority shareholder. But L’Oréal was too ambitious to remain a family firm. In order to fund future growth, it needed a partner with deep pockets. In 1974, Liliane Bettencourt signed an agreement that effectively gave almost half the company to Nestlé.
The advantages of such a deal could be seen in L’Oréal’s diversification into pharmaceuticals, with the acquisition of 53.4 per cent of Synthélabo, and into glossy magazines with stakes in the French publishers of Marie Claire and Cosmopolitan. L’Oréal also took full control of skincare brand Vichy Laboratories, which had been a research partner since the 1950s. Expansion continued into Australia, New Zealand, Hong Kong and Japan. In 1984, Dalle could relinquish the leadership of L’Oréal safe in the knowledge that the group had already far exceeded Eugène Schueller’s ambitions for it.
Science and scandal
Dalle was succeeded at the head of L’Oréal by Charles Zviak, whose reign was short but decisive. Now aged 62, Zviak had worked at L’Oréal since 1942, when he had joined Monsavon as a laboratory technician. He helped to pioneer methods that transformed the way women styled their hair, including the ‘cold permanent wave’. Over the years he had risen to the post of research director, then vice-president. Zviak well understood the connection between beauty and science. In fact, as Jacques Marseille states, Zviak believed that successful beauty brands were built on a ‘golden triangle’ of research, marketing and quality.
Zviak steered L’Oréal further in the direction of dermatological research. In the 1980s, the group acquired Galderma, Goupil and La Roche-Posay – all laboratories specialized in skincare. The chemist and researcher also ensured that L’Oréal could compete in the expanding market for anti-ageing creams, thanks to a product called Niosôme (based on a new form of liposome) launched in 1986 by Lancôme.
But François Dalle was by no means out of the picture at L’Oréal. In fact, he’d managed to get the group into the movie business.
Dalle had teamed up with a TV and film producer named Jean Frydman to create a production company called Paravision, in which L’Oréal took a 75 per cent stake. Frydman was a Jewish concentration camp survivor and former Resistance hero who lived part time in Israel, where he had interests in satellite television. The significance of this will become clear in a moment.
In 1989, the pair fell out over Paravision’s future direction. Through the press, Frydman claimed L’Oréal was trying to force him out because the group had acquired the Helena Rubinstein brand and was being threatened with a boycott by Arab countries. The articles suggested that L’Oréal knew the League of Arab States was assessing the extent of its connections with Israel, which made Frydman a liability. This would have been distasteful in any circumstances, but a 1977 French law meant that it was illegal for companies to cooperate with the boycott. Frydman evoked L’Oréal’s dark past, notably the links between its founder, Eugène Schueller, and its former American CEO, Jacques Corrèze, with La Cagoule. The grime that the post-war court case was supposed to have washed clean became abruptly apparent again, shocking a new generation.
In the midst of the scandal, Jacques Corrèze was forced to resign as chairman of Cosmair, the American marketing arm of L’Oréal. Already suffering from cancer, he died that same night. Dalle and Frydman later settled their dispute out of court. The bitterness and scandal dissipated as the media turned their attention to other matters.
But ‘the Frydman affair’, as the French press called it, was no doubt an instructive experience for the L’Oréal group’s new boss, Lindsay Owen-Jones.
Maybe he was born with it
The appointment of Owen-Jones as president and CEO in 1988 was a symbol of L’Oréal’s desire to become a global player. He certainly had little truck with the idea – still ingrained in the company’s culture – that L’Oréal was primarily a hair care business. On his watch, it was to become one of the first Western businesses to enter Eastern Europe after the fall of the Berlin Wall. It expanded throughout Asia, setting its sights on China well before many of its competitors. Above all, it conquered the United States, taking full control of Cosmair and acquiring iconic American brands, which it then marketed around the world. In the history of L’Oréal, there is definitely a before and after Lindsay Owen-Jones.
A Welshman, Owen-Jones joined L’Oréal in 1962 after studying literature at Oxford and management at INSEAD, a respected business school outside Paris. Initially he’d considered a career as a diplomat, but he had come to the conclusion that international business might be an alternative way of experiencing different cultures. The multicultural aspect of his personality was the key to his success and the motor that utterly transformed L’Oréal.
As you may have gathered, L’Oréal prefers its leaders to have worked their way to the top within the group. Owen-Jones was no exception. He quickly discovered that joining L’Oréal amounted to an old-fashioned apprenticeship. There were stints at the factory, the laboratory (where he learned to perm and dye hair) and on the road as a salesman in Normandy before he became a product manager for Elnett. As he once told an interviewer from Barron’s magazine, Owen-Jones had an affinity for beauty. ‘I had already discovered that I really loved women, and having been brought up with sisters I was less awe-inspired and more aware of the day-to-day. I was far less lost looking at a lipstick than most of my men friends were’ (cited in the Encyclopaedia of World Biography, online edition, 2004).
It helped that Owen-Jones believed in what he was doing. Beauty products were no mere commodities: these tubes, creams and lotions made people feel better about themselves and eased their rapport with others. By working at L’Oréal, Owen-Jones was making a positive contribution to society.
His ascension of the ladder continued: product manager in Belgium, marketing director of the consumer division, CEO in Italy and finally chairman and CEO of the US marketing division. Here he transformed the performance of the Lancôme brand.
The key was the department store Macy’s, which had refused to give the French interloper the same amount of space as the all-American Estée Lauder. As Geoffrey Jones relates, Owen-Jones successfully argued that ‘the spread of European clothes and cars like BMW into affluent suburbs suggested that their customers were “ripe for some European sophistication”’. Even more persuasively, he observed that the overall cut for Macy’s would be greater if the rival brands were given equal billing. Macy’s bought the argument. To improve his firepower, Owen-Jones took on actress and model Isabella Rossellini as the face of the brand and tripled its advertising budget. The result: Lancôme’s annual US sales grew by 30 per cent between 1983 and 1988, by which time US sales accounted for 35 per cent of the brand’s global revenues.
It was more than enough to make Paris sit up and notice. But Jacques Marseille writes that Owen-Jones was appreciated by L’Oréal not so much for his ability to make money for the group as for his fit within its culture. ‘In other words, having ideas – successful ones – working without excessive fatigue because the métier is gratifying, and anticipating the market in order to create products that will work.’
When Owen-Jones became CEO of L’Oréal, he was one of the first foreigners ever to occupy such a position at a French company. His trick was to keep L’Oréal entirely French, while turning it into a truly international concern. ‘I’ve tried to be a hyphen between France and English-speaking countries,’ he told Businessweek (‘L’Oréal: the beauty of global branding’, 26 June 1999). Rather than homogenizing brands into blandness, he emphasized their cultural roots. The acquisition of the Maybelline brand in the United States is an example of this approach.
A chemist named TL Williams had founded Maybelline in New York in 1915. He named it after his sister Mabel, whose habit of thickening her eyelashes with Vaseline and coal dust had inspired him to develop an eyelash darkening product. In 1917, he launched one of the world’s first modern mascaras. Until the 1960s, Maybelline concentrated on eye make-up. In 1969 the company was acquired by Plough, Inc (later Schering-Plough), which moved its base to Memphis, Tennessee and expanded its cosmetics range. In 1991 it adopted the well-known advertising slogan ‘Maybe she’s born with it, maybe it’s Maybelline’.
At Owen-Jones’s instigation, L’Oréal acquired Maybelline for US$758 million in 1996. He took it back to its birthplace, tacking the evocative words ‘New York’ on to its brand name and positioning it as synonymous with ‘the size, style, colour and success that give the city its captivating flavour’ (Maybelline.com).
Convinced (as Revlon had been several years earlier) that Manhattan cool travelled well, Owen-Jones then set about selling this image to the rest of the world. ‘I had what may have been an unrealistic ambition,’ he told Time magazine, ‘to put a Maybelline lipstick into the hand of every Chinese woman.’ Not so unrealistic, apparently: launched in China in 1998, by 2004 the Maybelline brand name was recognized by 98 per cent of Chinese women. In fact, it was soon reaping more than half of its US$1 billion in sales from markets outside the United States. In Japan alone, Maybelline became the top-selling mass-market cosmetics brand in 2000 (‘Dreams of beauty’, Time magazine, 26 April 2004).
Other triumphs followed. L’Oréal acquired the US brands Soft Sheen and Carson, which made hair care products for African American consumers, merged them into Soft Sheen/Carson and exported the brand to South Africa and Senegal. Soon, it was deriving 30 per cent of its revenues from these new markets.
In 2004, L’Oréal acquired Japanese cosmetics brand Shu Uemura. Named for its creator, a make-up artist who’d found fame in Hollywood after transforming the actress Shirley MacLaine into the titular character of the 1962 film My Geisha, the company had exactly the right multicultural profile. It gave L’Oréal a stronger foothold in Japan, but could also be flipped on its head to sell the idea of avant-garde beauty from Tokyo to sophisticated Western consumers. Its brand positioning focuses on ‘the art of beauty’.
Another savvy acquisition was the cult New York skin and hair care brand Kiehl’s. Founded in 1851 by a homeopathic pharmacist named John Kiehl, the company was still run from its original store – which looked as if it had barely changed – in the East Village. This was the only retail outlet it owned; the rest of the distribution was through selected department stores. The brand’s no-nonsense image and utilitarian packaging made it popular with male consumers – an elusive target group for beauty companies. Marketing was resolutely word-of-mouth, relying on generous samples and customer endorsements. When L’Oréal snapped up the brand in 2000, it began opening Kiehl’s outlets all over the world. Ironically, it risked destroying the down-to-earth quality that had attracted customers in the first place. Longterm fans began to complain that the brand had lost its authenticity, but its low-key marketing strategy remained intact.
Similar criticism greeted the acquisition in 2006 of Body Shop, the British ‘natural’ beauty brand created in 1976 by the late Dame Anita Roddick and her husband Gordon. Although it was occasionally accused of exaggerating its Green credentials for marketing purposes, the brand was closely associated with issues such as fair trade, sustainable development and an abhorrence of animal testing. The purchase allowed L’Oréal to exploit growing consumer interest in these areas.
Behind the scenes, Owen-Jones streamlined L’Oréal’s structure. He strengthened and expanded the range of cosmetics sold under the L’Oréal Paris brand name, ultimately transforming it into a global mid-market beauty brand. He slashed brands that were underperforming or had little global potential, retaining a core of international ‘mega-brands’. To aid this process, he established an international team of brand managers who could maintain a coherent global identity for each brand while responding to local trends. (An example of this was the launch in Japan of Maybelline’s Water Shine lipstick, which responded to a local desire for moist, sparkling lips. The product was highly successful and later rolled out worldwide.)
In accordance with Eugène Schueller’s theory that successful brands are built on research and innovation, Owen-Jones multiplied the company’s research staff eightfold (there are now more than 3,000 of them) and oversaw the establishment of 14 research centres around the world. Research into tissue engineering was aided by the acquisition of a company called SkinEthic, which specializes in lab-grown skin that eradicates the need for animal testing. A partnership with Nestlé’s nutritional research arm resulted in Innéov, a range of beauty pills.
Meanwhile, Owen-Jones returned the lustre to some of L’Oréal’s fustier brands, establishing Lancôme as an international watchword for sophisticated beauty ‘with a touch of French charm’ (lancome.com) and repackaging Helena Rubinstein’s ‘scientific beauty’ for a new generation.
Sir Lindsay Owen-Jones (he was knighted in 2005) stepped down as CEO of L’Oréal in 2006, although he remained chairman until early 2011. With him at the helm, the company had achieved decades of double-digit growth and transmogrified from a successful French hair care company with luxury aspirations into a corporate behemoth with more than 64,000 employees and a presence in 130 countries. And it had done all this with a portfolio of 23 core international brands.
The unenviable task of stepping into Owen-Jones’s shoes fell to a Frenchman, Jean-Paul Agon. Described by the group as having ‘an affinity for marketing’, Agon was Owen-Jones’s point man during the great Asian expansion. Later, he headed L’Oréal in the United States during the period when Garnier stormed that market with its Fructis range. He also helped to devise the Body Shop deal.
Like his predecessor, Agon had joined L’Oréal straight out of business school. What kind of corporate culture breeds employees who never seem to want to leave?
Because you ’re worth it
We met on the terrace of a restaurant in the Montparnasse district of Paris. I’d managed to persuade a former L’Oréal employee to talk to me about how the group instils extreme loyalty within its staff. He told me many things, but one in particular sticks in my mind. ‘They always tell you that you have talent,’ said my contact, whom we’ll call Alex. ‘Never that you have “potential”. Always “talent”. Think about what a difference that makes.’
Actually, I was thinking of L’Oréal’s famous tagline, ‘Because you’re worth it’. It’s the perfect pitch for a beauty company with a luxury positioning. In fact the slogan has been through several iterations, starting in 1973 with ‘Because I’m worth it’. The line was penned by 23-year-old copywriter Ilon Specht, who worked for the advertising agency McCann Erickson. First uttered by the actress Cybill Shepherd, it was the ideal sentiment for a period when women were demanding greater equality. And it endured – at least until 2004. By then, the feminist message had been diluted and the line seemed arrogant and narcissistic, especially on the lips of an actress earning millions of dollars in endorsement fees. So it became the more inclusive ‘Because you’re worth it’. Later still, in 2009, the line was changed to ‘Because we’re worth it’, with the aim of reinforcing the connection between consumers and the brand.
The line is occasionally used by the group’s human resources department to federate its staff. But it does not feel lame or silly when you work there – L’Oréal goes out of its way to make its employees feel valued. In fact, the process of inducting you into the family can work a little too well.
‘Every intern follows more or less the same path, over about a six-month period,’ Alex explained. ‘First you get the full tour behind the scenes – R&D, distribution, marketing and so forth – to such an extent that you already feel as if you’re on the management fast track. Then you go on the road as a sales person. That sounds tough – but it isn’t. You’re staying in great hotels; you’re treated with maximum respect. It’s actually a very enriching experience. When you get back, you’re rewarded with a product manager post.’
In parallel, these young trainees are encouraged to bond with one another. ‘L’Oréal organizes many social events for its interns, so you make a lot of friends. And because you’re all on the same track, throughout your career at L’Oréal, you keep bumping into one another. This gives you an amazing network within the company. Soon you find that you’re socializing outside of work. A great deal of the conversation revolves around L’Oréal and your colleagues.’
This is fine – until you leave. ‘During my time at L’Oréal I never saw anyone get fired. And very few people quit, because by the time you’ve finished your internship you’re more or less convinced that you won’t find a better post elsewhere.’
Research carried out by Béatrice Collin and Daniel Rouach for their (2009) book Le Modèle L’Oréal suggests that people work at L’Oréal for an average of 13 years. The annual turnover worldwide is 5.9 per cent for executives and 4.5 per cent for the entire workforce. But one should not infer from this that L’Oréal is an easy ride. Lindsay Owen-Jones was famous for fostering a spirit of competition within the company. He often launched rival brands into the same market, thus pitching their teams against one another. Employees were constantly challenged to defend their decisions. To a certain extent, L’Oréal employees are brothers in arms, united in battle against their own demanding hierarchy.
‘There’s a cult of perfection at L’Oréal,’ confirmed Alex. ‘Nothing is ever right the first time. No matter if you’ve followed your superior’s instructions to the letter, they’ll still find a way of making you start over, even if it means changing the parameters or contradicting themselves. You learn quite quickly that you should always have a back-up plan.’
Early mornings and late nights are de rigueur, as young executives strive to impress their bosses. Yet Alex still considers L’Oréal a positive experience. ‘Few companies are as diverse or give as many chances to young people. You’re given a lot of autonomy very early on, because L’Oréal wants you to develop decision-making skills and a sense of responsibility. At the same time, mistakes are usually forgiven, because they are a natural part of a culture that encourages innovation.’
The company’s international profile is another attraction: prospects for travel or a post abroad are strong. There seems little doubt that Alex would have stayed longer at L’Oréal if he had been given the chance. But sometimes people slip through the net. ‘I was filling in for somebody who was on sick leave, and when he returned they couldn’t find a full-time position for me,’ he told me.
With L’Oréal on his CV he quickly found another job. But one evening was enough to remind him that at L’Oréal, once you’re out – you’re out. ‘Soon after I’d left, I invited some friends round. As luck would have it, a few people were out of town and the bulk of the crowd were former colleagues from L’Oréal. Sure enough, all they talked about was a place I no longer worked and people I no longer knew. I felt excluded at my own dinner party. When I worked there, I hadn’t realized how deeply immersed in the company we all were. That’s when I had to accept that L’Oréal is a sort of sect.’
Sects, of course, are known for their secrecy. And the L’Oréaliens have a reputation for keeping their ranks tightly closed. ‘If they don’t know you, or you aren’t introduced to them by somebody they trust, you won’t get a word out of them,’ a press attaché from a rival company warned me. Her prediction turned out to be entirely accurate. My e-mails and calls were met with a wall of silence.
This was not paranoia. As Collin and Rouach put it, ‘L’Oréal is both highly accessible thanks to its advertising and its corporate communications, and difficult to penetrate because it is concerned about revealing its strategic advantages in a particularly competitive industry… The taste for secrecy within the group has become an art practised by a number of its managers.’
The authors add that people who work at L’Oréal feel as though they have signed a confidentiality agreement. Even after they have left the company, sharing its secrets would seem like a betrayal.
This ‘taste for secrecy’ made the scandal that reached its peak in the summer of 2010 seem particularly succulent. The story revolved around a feud between Liliane Bettencourt and her daughter, Françoise Bettencourt- Meyers. Françoise disapproved of a friendship between Liliane and a society photographer named François-Marie Banier, who had grown close to the elderly heiress after photographing her for a magazine. Taking the matter to court, Françoise claimed that Banier had exploited her mother’s ‘fragile mental state’ in order to obtain gifts and donations worth almost €1 billion. She urged the court to hand control of her mother’s estate over to her.
The matter was finally settled with a surprise reconciliation between the women. Bettencourt-Meyers dropped legal proceedings after her mother promised to sever all ties with Banier, including cutting him out of life insurance policies that named him as a beneficiary. The future of France’s largest fortune was secured – but not before the media had gorged themselves on tales of illicit tape recordings, secret donations to France’s ruling party, tax evasion on a jaw-dropping scale and the sort of largesse that considers an island in the Seychelles an appropriate gratuity.
A line was drawn under the affair when Liliane Bettencourt and her daughter were seen together in public for the first time since settling their differences. They attended the Paris fashion show of Armani, for which L’Oréal makes perfume.
In the world of beauty, even a scandal ends on a glamorous note.