Business Interview: Olivier Baussan, founder, L'Occitane
Toujours poetry, toujours Provence:The worldwide rise of a natural-beauty chain from its 'Jean de Florette' roots
Sunday 09 April 2006
L'Occitane is not a brand name that slides easily into the vernacular of Britons and Americans. Marketing experts might argue that this "foreign-ness" and lack of instant appeal presents a huge challenge for a company generating more than a third of its revenues in the English-speaking world.
But Olivier Baussan, the French founder of the natural- beauty company, disagrees: "Remember Häagen-Dazs? It was the same for them initially. While customers struggled with the name, what made the ice-cream memorable, just like our products, was the quality and purity of the ingredients. Strange names don't always harm sales. It just shows life doesn't always conform to what they teach at business school."
Baussan is an entrepreneur fired by a deep respect for nature. It is, he believes, an essential value that both underpins and differentiates the brand. A visit to one of the 26 warm yellow-painted stores in the UK reinforces this view.
These shops offer an array of skincare products and fragrances created from natural ingredients and packaged with sophistication. They project an image of bucolic Provence and reflect the etymology of the name: the spirit and culture of Occitania, a medieval province that stretched across southern France.
L'Occitane products are also available in concessions in big department stores and airport terminals and are sold via QVC, the television shopping channel.
"I began the business as a creative venture, " says the former literature student, who started distilling and selling rosemary oil in Provençal open-air markets 30 years ago, at the age of 23.
"Behind the products is a poetic vision of Provence. It's the story of the land. My parents left Paris to come and work the land. I was raised with respect and love for its traditions."
His respect has deep roots. He witnessed his parents enduring, à la Jean de Florette, a series of hardships and misfortunes in trying to harvest olives commercially. The difficulties eventually forced his father to return to his former profession as a writer.
Undeterred, the young Baussan stuck with his dream and his creative vision paid off. Within four years, funded by family and friends, he had established his first store and factory in the Provençal village of Volx (which is still the company's manufacturing base). By the 1980s, he was making enough products to support a burgeoning chain of outlets across France.
It is only in the past decade, however, that the company has developed into a global business. Privately owned, L'Occitane now has more than 700 stores in 65 countries, generating annual revenues of around €300m (£210m). Skilful positioning and high-quality products are two of the factors behind this success story. The third, which Baussan is the first to acknowledge, is his partnership with Reinold Geiger.
An Austrian businessman with a background in packaging beauty products, Geiger joined the company in 1996 as president. Previously a minority investor, he was part of the consortium- including Clarins, the cosmetics house which holds a 10 per cent stake - that bought L'Occitane back from the money men.
In developing the company Baussan had sold his majority stake to venture capitalists and lost involvement in the development process. He recalls: "It was hell. Our approaches were incompatible."
Geiger's first initiative was to ask the founder to return as creative director and lead product development. His second was to focus on international expansion and create a marketing strategy that would give the brand a global identity.
The partnership between the president and founder (who met through mutual friends) has been a classic marriage of complementary skills. Commercially pragmatic yet sensitive to the creative spirit, Geiger is the perfect foil to Baussan's poetic and philosophical disposition. Natural entrepreneurs, the two are united in their declaration that they would "make lousy employees".
According to Geiger: "America was our first port of call overseas because of its size. I knew from past experience it's easy to get started there, but, at the same time, difficult once you're in." He openly admits to mistakes: "We knew nothing about the American construction business when we opened our first store on Madison Avenue in New York, and totally underestimated how expensive the whole exercise would be. To recoup any losses, we had to open the store before it was finished. Fortunately, it didn't deter customers and our products flew off the shelves."
With stores established in the US, Latin America and Europe, the focus now is on building a stronger presence in Asia, and particularly China, as the company pursues its aim of growing to 2,000 stores worldwide in the next decade. "Each country is a different experience," says Geiger. "We are often dealing with people who have little knowledge of our business and building a relationship from scratch."
He attributes the success of L'Occitane to its staff and what they sell. "Aside from Olivier and myself, we have a lot of young people working in the business," he laughs. "They're very smart and we have a pragmatic culture. We discuss things and consider options, but then take a decision and act. We also totally believe in the product. You can't develop a company like this unless you have exceptional products."
Planning ahead, would L'Occitane move its manufacturing base from France to a country with lower costs? "Unlikely," he says. "Retaining control of the quality of ingredients and production methods is very important to our brand." He admits, though, that a flotation cannot be dismissed; it would depend on the shareholders but would be feasible if control of the company were maintained.
As L'Occitane celebrates its 30th anniversary, Baussan believes it should continue to "promote ecological as well as social interests". Products are not tested on animals, and information in Braille has been added to most of the packaging. "I wanted to show we cared about making our products accessible to all customers; it wasn't a commercial decision but it hasn't harmed profits either."
Equally important is the desire to help indigenous populations commercialise their traditional skills by producing new L'Occitane products. Successes include the support given to the women of Burkina Faso, who harvest shea nuts to make shea butter for the company.
From Provence to West Africa to your local high street. Who cares if you can't pronounce L'Occitane?
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