BW Confidential - Issue #6 - May/June 2011 - (Page 22)

Interview Puig chairman & ceo Marc Puig Risky business Despite a tough market, Spain-based group Puig has managed to produce a string of successful launches in recent years, while breathing new life into its brands. Now the aim is to become a top-five player in the global prestige fragrance category. Puig chairman and ceo Marc Puig tells BW Confidential how he plans to do so by Oonagh Phillips T he past few years have generated a good deal of curiosity about Puig. The Barcelona-based company has amazed the market by pulling off one of the most successful fragrance launches in recent years—Paco Rabanne’s 1 Million—from a brand that many had considered dead. The success of 1 Million has put Paco Rabanne firmly back on the fragrance map and has helped Puig boost its share of the global prestige fragrance market from 3.5% in 2004 to 7% today. Paco Rabanne is not the only Puig brand that has been given a new lease of life. The company has also revamped Nina Ricci and given it more appeal among younger consumers. Indeed, it is recent launches that have turned the company around, and some 50% of sales are now done with products that did not exist five years ago. Next on the agenda is taking Prada fragrances to the next level, while making a splash with its new brand, Italian fashion label Valentino, whose fragrance license was held by P&G until 2010. The company attributes its recent successes to coming out with products that “excite the consumer and tell a story”, as well as to a sharper appetite for risk. Analysts say it’s also down to a more focused approach and more careful and measured management of resources. Indeed, the company made cuts and restructured around five years ago under the leadership of chairman and ceo Marc Puig, all of which helped bring the company back from the brink and emerge from a series of failed launches. Despite this, analysts still see some weaknesses at the group. One is that Puig is still not in the topfive fragrance companies (it is ranked seventh), putting it at a disadvantage when it comes to talking to retailers; another downside is the group’s limited presence in the US. The fact too that the group is heavily fragrance focused is also seen as a weak point given the volatility of the category 22 and the difficulty of taking full advantage of the high-growth in emerging Asian markets, which are strongly weighted to skincare. These are all issues of which the group is aware and is looking to address. You want to increase market share to between 8% and 10%. How will you do this? It is our mission to increase our market share in the prestige fragrance category to 10%, as there is a minimum critical mass that you need to have in this category to be sustainable. We hope to achieve this in three years. If you look back to 2004 or 2005, we had a share of around 3.5%, and this year we estimate that we will have close to a 7% share, so we have already doubled our market share in the past five years. We will reach 10% by doing what we have done over the past five years. Are you looking at acquisitions to boost share? So far the development we have been pursuing has been pure organic growth. It’s true that we are proactively looking at opportunities and we have added a new brand to our portfolio with Valentino, which we’ll launch this year. At this point however, organic growth is our main driver for expansion. You are focused on fragrance. Do you feel a need to add a skincare company or a three-axe brand to the portfolio? We are focusing on the fragrance category, as we need to reach a minimum critical mass and until you have a certain position, presence and leveMay-June 2011 - N°6 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #6 - May/June 2011

Cover
Comment
Contents
Update
- Brand & retail news recap
- Digital digest
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
Launches
- The latest in fragrance, skincare & make-up
Interview
- Puig ceo Marc Puig
Insight: Skincare
- Category overview
- Department store initiatives
- Perfumeries
- The latest trends
Wellness
- Discounting in spas
- Spa case studies
Retail
- New store concepts
Travel retail
- Market analysis: Asia & Middle East
- Chinese travelers
Radar
- Four up-and-coming beauty brands
Market watch: China
- Analysis: country overview
- Industry roundtable
- Prestige retailing
- E-commerce
Packaging
- Decoration techniques
Last word
- LPK Beauty vp group creative director Liz Grubow

BW Confidential - Issue #6 - May/June 2011