Although it is now one of the parent group's biggest global businesses and the local leader in beauty, L'Oreal's US subsidiary has developed comparatively recently, the product of rapid and aggressive expansion during the 1980s and 1990s under former group CEO Lindsay Owen-Jones. Much of that growth has been as a result of steady organic expansion, and only partly through acquisition. Most purchases have been in the niche or professional sector, with the notable exception of Maybelline, the market-leading cosmetics business acquired in 1996. Other key local subsidiaries include ethnic specialist Soft Sheen-Carson and upscale skincare brand Kiehl's. More recently, the group has bolted on a collection of smaller high-end specialist brands. L'Oreal has also pieced together an extensive salon distribution network in the US, acquiring a collection of regional agents and merging them under the name SalonCentric. L'Oreal's combined sales for North America were around $7.2bn in 2014.
Selected L'Oreal USA advertising
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Adbrands Weekly Update 28th Jul 2016: L'Oreal agreed to acquire fast-growing US beauty brand IT Cosmetics for $1.2bn, equivalent to around three times expected retail sales for 2016. Sales for 2015 were up by more than 50% on the year before. Founded in 2008 by former news anchor Jamie Kern Lima, and still led by her, products are sold mainly through home shopping channel QVC, although IT also sells through prestige chains such as Sephora and Ulte. It represents L'Oreal's first big move into direct-sold cosmetics.
Adbrands Weekly Update 17th Dec 2015: Another big "mediapalooza" review reached its conclusion with the decision by L'Oreal USA to consolidate all its US media planning and buying with GroupM's MEC. The WPP-owned shop had previously managed local planning for selected luxury brands, but now wins digital from Publicis network DigitasLBi and TV and print from Interpublic's UM. Billings are estimated at around $850m annually. It is MEC's biggest win by far this year. Publicis Groupe moved quickly to limit negative media coverage over another account loss so soon after the P&G decision last week, pointing out that the L'Oreal digital business represented only 0.1% of its annual revenues, or little more than $10m.
Adbrands Weekly Update 2nd April 2015: L'Oreal has launched a review of its substantial US media budget, according to AdAge this morning. Such a move was becoming increasingly inevitable, with duties currently split between a patchwork of different agencies and parent groups. Responsibility had traditionally been shared between Publicis Groupe's Zenith and Optimedia units, with Interpublic's UM handling some TV work. However, WPP's GroupM has made steady inroads into L'Oreal's media roster in other markets, including the UK and Canada, and picked off US planning for the Lancome brand and several designer fragrances in the US at the end of last year. This new contest looks like it could be a straight battle between WPP and Publicis, with Interpublic probably slipping through the cracks.
Adbrands Weekly Update 30th Oct 2014: L'Oreal poached Nadine McHugh from Colgate-Palmolive to become SVP, media. She replaces longtime US media chief Vikki Schwartzmann, who will become a special adviser to CEO Frederic Roze prior to retirement next year.
Adbrands Weekly Update 19th June 2014: L'Oreal added to its portfolio with the acquisition of upscale US brand NYX Cosmetics, the so-called "MAC of mass", positioned as a premium brand like MAC Cosmetics but sold through mass channels including CVS and Target. Sales for the most recent year were around $93m, but L'Oreal is rumoured to have paid around $500m to acquire the business.
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