ON A HOT afternoon, close to grimy London Bridge, the boss of the world’s
biggest beauty firm waits in the offices of Body Shop, one of his recent
acquisitions. “ ’Allo,” says Jean-Paul Agon, chief executive of L’Oréal.
Agon, tall, beaky and bald, sports a welcoming smile. But first, he says, I
must meet others. Doors are opened. Executives are waved out. Agon, I would
guess, likes to see flesh pressed.
Eighteen months ago, many would have been staggered to see him there. L’Oréal
– huge, established and dominant in so many sectors of cosmetics – was
everything the radical Body Shop hated. Yet last year Agon wooed Body Shop
founder Dame Anita Roddick with the promise of helping to change his big
business from the inside. It worked.
“She was very clever, she could see it was a powerful combination,” says Agon,
who paid £652m for the shop chain. “Body Shop is a great brand, natural
products, with its own network of stores and we have the best R&D in the
world, great marketing, great at creating products. What a combination.”
He puffs out his cheeks, as if to say, “magnifique”. Agon, 50, is a charmer,
not just charismatic – his chairman and predecessor Sir Lindsay Owen-Jones
was that, too – but prepared to take radical decisions and explain why.
That will make a change. L’Oréal, one of France’s biggest companies with
revenues of €16 billion (£10.8 billion), has in the past offered less
disclosure than its Anglo-Saxon rivals – an irony since Owen-Jones is a Brit.
Yet despite the brilliance of its research departments and the genius of its
marketing, L’Oréal has not been good at countering criticism that the beauty
business is a rough trade, playing on people’s insecurities and hurting
animals in the process.
Perhaps, as ruler of a global market where appearance is everything – its
billion-euro brands include L’Oréal Paris, L’Oréal Professionnel, Garnier,
Lancôme and Maybelline – it didn’t feel it needed to.
It has taken me five years just to get in the same room as a L’Oréal boss.
“Well,” smiles Agon with a charming shrug. “I think tonight proves that
times change, hunh?”
Agon took over a year ago. A different L’Oréal seems to be emerging: more
open, championing more natural products and promising an alternative to
animal testing. Owen-Jones credits Agon with “a new sense of dynamism”. Agon
will need that, as he faces tougher conditions than his predecessor.
Owen-Jones led L’Oréal for over two decades, turning it into an international
sales pow-erhouse reporting consistently high growth year after year. Now
the competition is fiercer – not least Procter & Gamble (P&G)
moving aggressively onto L’Oréal’s patch – and the established markets are
full to bursting.
“Oh, I’m not worried,” smiles Agon, “though you may think I’m too optimistic.
But there are two good reasons why we will continue good growth. First is
the rapid development of the emerging economies, and the other is that the
world’s population is ageing, and that’s great, because you use cosmetics
longer, and the more you age, the more you need good cosmetics.”
L’Oréal has a new antiageing molecule, Pro-Xylane, which it is introducing
across its brands. It promises to market more products at “the new seniors”.
And making people feel good by looking good is a positive thing, argues
Agon, whatever their age. There will also be more products aimed at men.
“This company is not just about women, it is about everyone,” says Agon. “We
can be passionate about that. But yes, you have to love women to work here –
that’s not a bad trait, ha-ha-ha.” And he gives a wonderfully Gallic, dirty
laugh.
It’s hard not to be won over by Agon’s verve. He is marketing obsessed –
L’Oréal is one of the biggest advertisers – and he promises to continue the
decentralised culture, where each division runs its own brands.
Those divisions – consumer, professional, luxury and active – have been
stocked through a careful strategy of buying local brands and expanding
globally. L’Oréal sticks to 19 international brands in total.
“That’s few compared to others, eh?” says Agon. “Didn’t Unilever reconcentrate
on 400 brands a few years ago – where on earth were they coming from?” He
laughs.
Then he emphasises the strength of the L’Oréal culture. “We really believe in
individuals. I don’t want to name any other companies, but in some, the
structures and organisations and processes are the most important thing, and
the people are interchangeable.”
Is that a pop at P&G? He grins. “No. I’m explaining what we are. We
believe first and foremost in the talents of people. Sometimes we even
create organisations to accommodate the talents of our people.” He cites
surveys that list L’Oréal as the No 1 employer of choice among European
graduates – and No 1 by far for women.
“That’s so important for us. In this industry individual talent is critical.
You need innovation, intuition, sensitivity and talent, and we build our
company around that.”
Agon is a persuasive talker. Born in Paris, an only child, his father a
pharmacist and his mother an architect, he joined L’Oréal straight from
business school. It wasn’t his first choice – he wanted to be a film
director and a psychiatrist. “Maybe I found a job that combines both,” he
laughs.
He started as a sales rep in the south of France, driving samples round in a
Fiat 127. He got his big break in management overseas – overhauling the
company’s loss-making subsidiary in Greece.
“Then I found out why five people had refused the job before; it was in really
bad shape.” But he learnt everything there, and turned it round. “It was, as
we say, ‘determinant’, very important in my career.”
Later he met Owen-Jones. “One day we were at the same table for lunch in
Paris, and after that, he just kept giving me opportunities and challenges.”
Germany, Asia, America. Agon reached the top with a global view of the
opportunities facing the group.
But there is also a lot that could turn sour. L’Oréal’s ownership structure
makes some uneasy. The Swiss multinational Nestlé has 28% of the company –
an interest it has held since 1974. Another 29% is held by Liliane
Bettencourt, the 84-year-old daughter of L’Oréal’s founder, Eugène
Schueller. That stake alone makes her the richest woman in the world. But
will her family keep the stake? And what are Nestlé’s intentions?
“They don’t tell me,” says Agon. “But I think we have proven in the past 30
years that this situation is a good one for the company and for Nestlé and
for the family.”
It was that Nestlé connection which many thought would torpedo a deal with
Body Shop’s Roddick, who has campaigned against the company’s marketing of
baby milk in developing countries.
“It was not the favourite part of the deal,” nods Agon. “But I think Anita
understands the way we work.”
Roddick confirms she met Nestlé, and says she doesn’t believe it will ever bid
for L’Oréal. She adds that her deal with L’Oréal is founded in her trust of
Agon, and his openness to her ideas. She is retained as an adviser. “It’s
not just his charm,” says Roddick, who made £117.5m from the deal. “It’s
that he hasn’t got that autocratic, hierarchical attitude that some have. He
likes dialogue.”
She highlights the power of L’Oréal’s research arm – if anyone is going to
find ways to end the testing of cosmetic ingredients on animals, it will be
the French giant, which is ahead of all rivals in developing alternative
methods. “L’Oréal’s just been so bloody awful at communicating this in the
past.”
So whose idea was it to buy Body Shop? Agon says he and Owen-Jones thought it
up two years ago. Roddick, mischievously, says Agon’s wife suggested it
first. Plus Agon had played a part in expanding Kiehl’s, an upmarket
pharmacy brand bought by L’Oréal in America. It started with one
shop in New York and now has more than 20 outlets across the country.
So is L’Oréal becoming a retailer? “Non,” says Agon firmly. “And I don’t think
we are doing retail. For me, you are a retailer when you sell the brands of
other people. When you sell only your own brand then you are a brand with
stores, like Hermès or Gucci or Chanel. By owning the stores you have a very
powerful channel, you can really control the brand experience; that is
interesting. Put it into supermarkets and you lose the magic.”
Agon wants to preserve that magic, so he has ring-fenced Body Shop, putting in
only two executives, and entrusting former Kiehl’s chief Philip Clough to
expand the chain further into developing economies. One of L’Oréal’s
weaknesses is that it lacks natural product brands – Body Shop
addresses that.
And Agon adds on animal testing: “Anita’s dream and our ambition converge
exactly. We are the ones who will make her dream come true one day.”
He says it with conviction. Roddick believes him. “He’s absolutely genuine.”
But isn’t it just about selling more prod-ucts? Of course, that’s business.
Yet Agon, it seems, really does want to make L’Oréal a force for good. Even
the horribly glib tagline for L’Oréal Paris, “Because you’re worth it”,
should be reinterpreted, he says.
“It’s not just ‘I am ready to pay more’. It’s about women saying ‘I am a good
person because I give back to communities’ – that’s what I want
to make it evolve to.” You can only wish him luck.
JEAN-PAUL AGON’S WORKING DAY
THE L’Oréal chief executive wakes at 6.45am at his home in the Paris suburb of
Neuilly. Jean-Paul Agon is collected by car and driven to L’Oréal’s
headquarters in nearby Clichy before 8am.
“I work a lot with the teams. I am almost never in my office. I could start
with the Latin American zone team, then finance, then a full afternoon on a
brand. I am not trying to control everything, but I want to be in on the
origin of projects.” He eats in-house and often works until 8pm, then goes
home. “Sleep is very important to me. I must have seven-and-a-half hours.”
He travels 15 weeks a year.
VITAL STATISTICS
Born:July 6, 1956
Marital status:married, with three children
School:Sainte-Croix de Neuilly
University:HEC Business School
First job:salesman, L’Oréal Paris
Salary:€2m plus bonus
Homes:Paris, Val d’Isère, Corsica
Car:grey Peugeot 607
Favourite book:One Hundred Years of Solitude, by Gabriel Garcia
Marquez
Favourite music:Mozart and Abba
Favourite film:Brazil, directed by Terry Gilliam
Favourite gadget:‘I am not a gadget guy’
Last holiday:Val d’Isère
DOWNTIME
JEAN-PAUL AGON likes to sail. He usually charters the same yacht and crew in
Greece.
“I love sailing in Greece,” he says. “I can still speak Greek from when I
worked there and I love the people. It’s a very nice, old sailing boat from
the 1950s, 20 metres long. I go from island to island, it is really
paradise.”
He also relaxes by skiing. He keeps a home in Val d’Isère. “It is lovely for
off-piste skiing. I hope to do one or two weeks a year there.”
Much of his salary is now going on another home in Corsica. “My wife likes to
build new houses,” he explains.
