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Perfume and France
from 80’s to 90’s
Competition
Internationalization
Competition in France
Definition of a competitive market:
A competitive market is one where no one firm has a dominant position
and where the consumer has plenty of choice when buying goods or
services. Firms in a competitive market each have a small market share.
There are few barriers to the entry of new firms which allows new
businesses to enter the market if they believe they can make sufficient
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profits.
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Benefits of a competitive market:
Lower costs
Lower prices for consumers
More innovation
Driver for productivity growth
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Competition in France
Variability in perfume market shares over years
Transfer of fragrance house names in second half of 1980s
Changes of fashion
Launch of new brands
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For Example:
Lauder’s market share fell 40%
Chanel’s rose
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More Recently:
LVMH’s market share has held strong in USA, Asia, and Europe, despite
economic climate
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Competition In France
Exports
French cosmetic industry is world’s fourth largest exporter. 53% of 2003
production exported. Sold in 202 Countries. Represents $8.57 billion in
sales
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The 80s Market in France!!
Main features
Marked decline in national saving fund (SICAV)- 
1993- it accounted for 3000 billion Francs of total GNP 
(7000 billion Francs)
Sustained economic growth- 
Retained good standard of living for French
also state protection
High levels of exports- 6.1% of world exports behind 
Japan and Germany [1st] France [2nd]
More features of the 80s market……!!
France had some biggest countries e.g. Danome, Elf, Sodexho, Michelin.
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Shift from national systems to privatisation- 
1982- major banks nationalised and state took over control therefore control
over money!
Problematic; people made redundant 
Employment figures in 1983 as % of working population;
Britain ~ 10% 
France ~ 8.3% 
Germany ~ 7.7% 
HOWEVER advantage; promotion of enterprises
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The 90s market in
France
Shift from state ownership to private business
The French economy opened up to world markets 
making France the world’s fourth largest exporter of
goods and third largest exporter of services
But opening up markets always gives rise to fears 
of competition for French businesses and
constraints placed on economic policy
The perfume industry and
foreign trade
In comparison to other industries, perfumes have
remained a niche in the market but they have had to
evolve to compete on the world market
French perfumes account for a substantial share of
world exports and 4 of the 8 major groups in the sector
are French
An industry with an ancient tradition- once family run
firms, now major corporations.
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The perfume industry and foreign
trade
Grasse on the French Riviera has been the capital since
the 18th century and perfumes are luxury goods
important to the French reputation. Brands such as
Guerlain refuse to hear of anything but highly selective
distribution.
However, with stiffer competition from abroad
perfume is more widely distributed :
“Perfume. like Champagne will soon be sold in all
supermarkets” – Cartier
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Business Description
Founder : Gabrielle "Coco" Chanel opened her first
boutique in 1913
Company type: Private, independent company,
Thus, financial results and strategy are not featured
Owners: These have changed over the years. Today the main players are:
Chairman: Alain Wertheimer
CEO: Francoise Montenay
President: Maureen Chiquet (in 2003)
Top competitors: Gucci, Prada, LVMH
Company audience: shifted to a younger market after Coco Chanel died in
1971
Chanel Owns: 100 boutiques worldwide:
more than 35 are in japan.
Chanel also owns Eres and Paraffection
Chanel and going International
With regard to the international sector, Chanel
has been open to international interests, and not
let French ideals come in the way:
Chanel was interested in getting involved int.
Chanel's first post-war collection was presented in
1954. The French were not impressed; the Americans loved it.
1983:
Karl Lagerfeld, who was hired away from Chloe by the House of Chanel in,
revitalized the name and make it an international brand.
Won 2004 Award:
“is now a global business Chanel”
Today Chanel No.5 sells a bottle every 30 seconds
Chanel and Production
1921
Ernest Beaux created Chanel No. 5 for Coco Chanel
Chanel and Finance:
At thefor
height
heronly
fame one
in 1935sound:
Chanel liberty.
employed
4,000 workers
and sold 28,000 models
world-wide
every year.
“Money
meofhas
“Gabrielle
Chanel
From the beginning:
Gabrielle “coco” was able to finance herself through
Arthur 'Boy' Capel. He financed her move from her
Balsans studio to her shop in Paris in Rue Carbon.
1935:
At the height of her fame in Chanel employed 4,000 workers
(compare to today: Worldwide, Chanel employs approximately 10,000)
During the Great depression: 1930’s:
As the thirties drew to a close, Chanel became very bitter about her
financial situation. The U.S.A were interested in the Workers at Chanel stirked
in her office, and got locked in
1939:
All Chanel stored were closed and all workers were laid off
In the 20th century:
Perfume started to be mass produced
 France is home to world-famous brands such as L'Oréal, Chanel, Guerlain,
Yves Saint-Laurent, Clarins, Dior, and Givenchy.
 They hold 30% of international market shares, ahead of the United States and
they have made France the world's number one perfume and cosmetics
exporting country.
Business Description:
 Christian Dior’s international fame dates back to 1947.
 However, at this time the designer himself was in charge, and the group had its
base in France and was present abroad only through its licensees.
 Since then, an international network of stores has been developed. It has
grown from 66 boutiques in 1998 to 184 at the end of 2004. By the end of the
current year, it will be close to 200 boutiques.
 These can be found in high-potential zones all over the world.
Business Description:
The business is split into the following segments:
Christian Dior couture
wines and spirits
fragrances and cosmetics
watches and jewellery
fashion and leather goods
and selective retailing
These account for approximately: 4.2%, 16.9%, 33.2%, 17.4%, 4%, and 24.3% of
sales respectively.
 Christian Dior has tripled its revenues since 1998.
 Dior was bought in 1987 and now belongs to the Louis-Vuitton-Moët-Hennessy
(LVMH) Group.
 Christian Dior consists of three subsidiaries:
Christian Dior Couture (100% owned),
Financiere Jean Coujon (100% owned) and
LVMH, which is 42.5% owned by Financiere
Jean Coujon.
LVMH accounts for all the company's
revenues apart from the Christian Dior
Couture segment.
LVMH is a publicly traded company.
The chairman (Bernard Arnault) as well as several directors are members of the
board of both companies.
Christian Dior's has control of the group as it owns 42.5% of the shares .
LVMH is the world's largest luxury goods company, with many well-known
brands, including:
wines and spirits (Dom Pérignon, Moët & Chandon, Veuve Clicquot, and
Hennessy)
 perfumes (Christian Dior, Guerlain, and Givenchy), cosmetics (Bliss, Fresh, and
BeneFit)
 fashion and leather goods (Christian Lacroix, Donna Karan, Givenchy, Kenzo,
and Louis Vuitton)
watches and jewellery (TAG Heuer, Ebel, Chaumet, and Fred).
LVMH also owns the Sephora cosmetics stores, Le Bon Marche Paris department
stores and 61% of the DFS Group.
For the fiscal year of 2004 the company generated total revenues of E13,208
million thus representing organic growth of 11% over 2003.
Between 2002 and 2004, its net income grew more than 80%.
Number of
employees:
58,679 ( 12/31/2004 )
56,815 ( 12/31/2003 )
Date of first listing: 4/12/1991
Initial listing price: €15.63
Latest price: €66.80
Some of the biggest designers have followed one another at the head of the
group, beginning with Christian Dior himself, then Yves Saint-Laurent, Marc
Bohan, Gianfranco Ferré and John Galliano.
Top Competitors:
Metaphora
Escada AG
Gucci Group
Hugo Boss AG
Tommy Hilfiger Corporation
Pinault-Printemps-Redoute SA
Polo Ralph Lauren Corporation
Puig Beauty & Fashion
Dior Perfumes
In 1947 Christian Dior perfume company is set up and he christens the first
perfume "Miss Dior".
1947-Miss Dior
1949-Diorama
1957-Diorissimo
1963-Diorling
1963-Eau Fraiche (W)
1966-Eau Sauvage
1972-Diorella
1976-Dior Dior
1979-Dioressence
1980-Jules for men
1984-Eau Sauvage Extreme
1985-Poison
1988-Fahrenheit for men
1991-Dune (W)
1994-Dolce Vita
1994-Tendre Poison
1995-Eau Svelte (W)
1997-Dune for Men
1998-Eau de Dolce Vita
1999-Hypnotic Poison (W)
1999-J'Adore (W)
1999-Lily (W)
2000-Eau de Dior Coloressence
2000-Eau de Dior Energizing
2000-Eau de Dior Relaxing
2000-Diorever
2000-Remember Me (W)
2001-Fahrenheit Summer (M)
2001-Higher (M)
2002-Forever and Ever (W)
2002-Addict (W)
2002-Dune Sun (W)
2002-J'Adore Eau d'Ete (W)
2003-ILove Dior (W)
2003-Chris 1947 (W)
2003-L'Or J'Adore (W)
2003-Fahrenheit O Degree (M)
2003-J'Adore New Eau de Toilette (W)
2003-J'Adore So Dior (W)
2003 -Higher Energy (M)
2003 -Addict (W)
2003 -Lily Dior (W)
2004 -Addict Eau Fraiche (W)
2004 -Fahrenheit Fresh (M)
2004 -Eau Noire (M)
2004 -Cologne Blanche(M)
2004 -Boise d'Argent (M)
2004 -Pure Poison (M)
2004 -Dior Me, Dior Me Not (W)
2005 -Miss Dior Cherie(W)
Summary of important events:
1947-Christian Dior perfume company set up
Many well-known designers take over the house over
the years (after Dior’s death in 1957).
1985- Bernalt Arnault becomes chairman (# 40 on
World's Richest People 2003)
1987-company is bought and becomes part of LVMH
group
1991- Group becomes privatised and enters the
stockmarket
Perfumes and cosmetics form the biggest part of sales
and increase the group’s revenue
More emphasis placed on perfume industry in last few
years
Conclusion