LOccitane plans to be at 500 pharmacies in three years
Valor Econômico 09/30/10
This week, in the Brazilian headquarters of the French group L'Occitane, in the south area of São Paulo, employees of the drugstore chain DrogaRaia were walking through the aisles. These professionals were at the training center of the company, on alternate days for lessons in closed meetings. It is part of a project of the brand of cosmetics that is beginning to become stronger in a few days. From Monday, L'Occitane starts to sell 80 products of its mix in units of DrogaRaia in São Paulo.It is the beginning of a plan that aims at selling 500 items of the brand in drugstore points within three years, says Anna Chaia, president of the company in Brazil. "We plan an intense expand", she says. "We are already negotiating with other retailers such as Onofre and Drogasil. And we are still evaluating the possibility of creating 'store in store' in future drug stores that have room for it", she says.
With 55 stores in Brazil, the French network has begun to evaluate, for nearly a year, the possibility to expand operations through partnerships in retail. This is not an alternative to the organic expansion plans in Brazil. L'Occitane wants to reach 70 stores nationwide by March 2011 and 100 units in 2012. It still expects to increase the earnings in 35% this year (there were R$ 102 million / US$ 51.8 million in 2009, an increase of 30% compared to 2008). But Chaia believes that there is room to do more, faster and at the same time, without "pushing thing too fast", she says.
At first, goods will be sold in five units of DrogaRaia and the number will be expanded gradually and steadily. Four stores of the Rio Grande do Sul chain of drugstores Panvel began to sell items of the brand some months ago in order to test the demand between classes A and B. The 80 items initially sold are equivalent to 20% of the total line of the brand in Brazil, with 400 items.
At the moment, products for the body will be sold, hair and fragrance. Items for the face area, with higher prices (there are 50 milliliters cream for R$ 255/US$ 150) should complement the portfolio of the drugstores from November. L'Occitane will exhibit the cosmetics in exclusive shelves of 1.20 meters, manufactured by the furniture area based in Paris. To have this space in stores, it was necessary to negotiate with the drugstores. The fact is that the number of brands that want to have their own spaces within the pharmacy grew amazingly, to expose the products prominently.
Worldwide, the L'Occitane grew 15% last year, reaching € 560 million in revenue. In Brazil, if reaching the expected high of 35% for the fiscal year ending in March 2011, local earnings will reach R$ 135 million (US$ 79.4 million). Should amount to 8% of worldwide earnings. This year, the company in Brazil has become the fourth largest operation of the French network of the world.