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L’Oréal chief executive Nicolas Hieronimus said the Chinese beauty market has stabilised after a difficult couple of years, adding that the company retains the firepower to do more deals, days after announcing the €4bn purchase of Kering’s beauty business.
“The Chinese market has stabilised at a slightly positive level and with a little bit more [demand for] luxury, which is quite good for us,” Hieronimus told the Financial Times, pointing to improving consumer sentiment in the country.
“There are a number of small indicators that point in the right direction. But I wouldn’t bet on a spectacular turnaround,” he added.
Hieronimus’s comments came as L’Oréal reported that group sales grew by 4.2 per cent in the third quarter to €10.3bn, compared with the same period last year. Like for like sales in north Asia rose by 4.7 per cent.
The owner of dozens of beauty brands from Garnier to Aesop and La Roche-Posay said third-quarter revenues in mainland China grew by a mid-single digit percentage.
L’Oréal’s results come days after the Paris-listed group announced the purchase of Kering’s beauty business — including licenses for Bottega Veneta, Balenciaga and Gucci — for €4bn in cash.
Hieronimus said the company retains a “very healthy balance sheet and a level of cash flow that allows it to always be on the lookout for opportunities”.
This is a developing story
