Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — L'Oréal SA is finding long-term planning more difficult amid a "chaotic" political environment, said chief executive officer Jean-Paul Agon.
France remains a tough market at a time the country is engulfed in one of its most uncertain presidential elections, the CEO said after the cosmetics company reported reported full-year earnings that met analysts’ estimates and announced a share buyback. Far-right presidential candidate Marine Le Pen has pledged to take France out of the euro zone, and the UK is negotiating its exit from the European Union.
“The world is so unpredictable now that it’s very difficult now to plan for the very long term,” Agon said Friday in an interview with Bloomberg Television. “L’Oréal is flexible so we can adapt to the evolution of the world, which is very important in times like now.”
A French exit from the euro currency bloc “would be really bad,” he said. Yet Brexit so far has provided a favourable environment for L’Oréal sales in the UK, he said, thanks to the weakening of the pound which has brought more tourists to the country.
ADVERTISEMENT
“This year will be chaotic,” he said. “Last year I said the world was becoming ‘VUCA’ — volatile, uncertain, complex, ambiguous. It’s getting more and more VUCA.”
One uncertainty lies with the new US administration under President Donald Trump and potential threats to rein in imports. The US accounts for 27 percent of L’Oréal’s sales, making it by far the company’s No. 1 market, Agon said.
"It depends what kind of protectionism it is,” he said. “But we’ve always had the policy of manufacturing where we sell. We manufacture in the US for our US consumer, in China for the Chinese consumer. So most of what we sell in the US is made in the US."
By Caroline Connan and Geraldine Amiel; editors: Vidya Root, Phil Serafino and Thomas Mulier.
