The Nivea line of beauty and skin care products is one of the top global cosmetics brands and has filled the coffers of its maker, Beiersdorf. Now the Hamburg-based company wants to use some of those funds to build up some of its other brands, particularly its super-premium La Prairie beauty products.
The luxury anti-aging brand features a “skin caviar,” for instance, that contains caviar extract and retails on the Neiman Marcus website for $820 (€704) for a 3.4-ounce jar. A holiday set of gold-infused creams sells for $1,270 and a similar platinum collection for $1,875. Sales of these super-luxury products were up 13 percent in the first nine months of the year, driving the company’s profit growth and share price. That was welcome because the company has been criticized for its slow growth with a mature Nivea brand.
The global brand traces its origins to the 1930s when Clinique La Prairie in Montreux, Switzerland pioneered cellular anti-aging therapies. Laboratoires La Prairie inherits that tradition, applying the combination of science and rare ingredients to its anti-aging skin care products. It currently has 1,300 employees and the products are sold through luxury cosmetics stores, high-end department stores and airports.
New recruit Vincent Warnery managed over-the-counter drugs at Sanofi and also worked at L’Oréal previously, so he covers Beiersdorf’s core businesses.
Beiersdorf recruited Vincent Warnery from French drugmaker Sanofi in the spring to manage La Prairie and two other top brands. The 49-year-old Frenchman managed over-the-counter drugs at Sanofi and also worked at L’Oréal previously, so he covers Beiersdorf’s core businesses.
Half a year later, he is starting to make his mark. Earlier this month, he brought managers from around the world to Hamburg to explain the new strategy for the brands, which starts with making them independent from Nivea distribution channels. The brands, which also include skin cream Eucerin and Hansaplast adhesive bandages, will have the same autonomy as Beiersdorf’s highly successful Tesa adhesive tape. Tesa registered much faster growth when it was spun off into a separate company and is a model for these other brands.
Mr. Warnery has been given a budget to hire many new experts and modernize La Prairie retail outlets. He will get more from Beiersdorf’s reserves of €4 billion if the new strategy proves successful. There could even be money for acquisition of further brands as well. It would have to be an attractive brand that also fits into the company’s focus on skin care or adhesive products.
The majority shareholder in Beiersdorf is Michael Herz. The Hamburg billionaire has been preoccupied lately with finding a new business model and hiring new management for the ailing Tchibo chain of coffee outlets. He may not see any need to rock the boat at a prosperous Beiersdorf and might take some convincing in terms of acquisitions. La Prairie itself was a 1991 acquisition.
In the meantime, Mr. Warnery seems to have the full support of Chief Executive Stefan Heidenreich. It will be up to the two of them to show Mr. Herz that they are on to a winning strategy.
Christoph Kapalschinski covers consumer goods, textiles and food for Handelsblatt. Darrell Delamaide adapted this into English for Handelsblatt Global. To contact the author: email@example.com