Loreal and the supply chain transformation

Filed in archive News on February 15, 2008

L'Oreal CEO Jean-Paul Agon said the cosmetics group expects to improve its gross margin further through 'major' productivity gains in its supply chain.

According to a release in CNN Money, L'Oreal is notably planning to reduce its number of buying offices to four from seven, and study 'targeted' partnerships with suppliers to cut costs, Agon said at a press conference on the company's 2007 results.

The CEO also said the company is aiming for an 'improvement' in profits this year, without giving any specific guidance. Reporting full year results last night, L'Oreal said it is 'optimistic' about 2008 and is again targeting like-for-like sales growth of 6-8 pct. Agon reiterated today that L'Oreal is confident about 2008, with strong growth in emerging markets expected to offset any weakness in North America.

The cosmetics sector 'will not be overly affected' by economic uncertainty, he said, arguing that consumers will divert spending from big investments such as property towards consumer products.