Puig Beauty and Fashion Group S.L.

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Puig Beauty and Fashion Group S.L.

Travessera de Gracia 9
08021 Barcelona
Spain
Telephone: (34) 93-400-70-00
Fax: (34) 93-400-70-10
Web site: http://www.puig.com

Private Company
Incorporated: 1914 as Antonio Puig S.A.
Employees: 5,000
Sales: $1.04 billion (2002)
NAIC: 325620 Toilet Preparations Manufacturing; 424210 Drugs and Druggists' Sundries Merchant Wholesalers; 423940 Jewelry, Watch, Precious Stones, and Precious Metal Merchant Wholesalers

Puig Beauty and Fashion Group S.L. is one of the world's leading cosmetics and perfume companies and the largest such company in Spain. The firm manufactures fine perfumes, cosmetics and toiletries as well as mass-market brands. It runs ten manufacturing centers, with locations in Spain, France, and Mexico, and operates three fashion design centers, with locations in Spain, France, and the United States. Puig distributes its lines in more than 150 countries worldwide. Almost 70 percent of the company's sales come from Europe, with another 20 percent originating in the United States. Some of Puig's well-known brands are Lavanda Puig, Agua Brava, Azur de Puig, and Quorum. Puig also owns the established French perfume company Nina Ricci. Some of the firm's leading scents are associated with renowned fashion designers, including the Venezuelan designer Carolina Herrera and French designer Paco Rabanne. Puig also has a marketing agreement with the Italian fashion house Prada. The firm began as a distributor of French perfumes in Spain and became the foremost Spanish toiletries firm. Puig expanded into Europe and North America in the 1980s and 1990s and has continued to grow quickly through acquisitions. Puig owns two of its former major Spanish competitors, Myrurgia and Perfumeria Gal. Puig Beauty and Fashion Group is owned by members of the founding Puig family, though in the 2000s the chief executive position passed for the first time to a non-family member.

Modest Beginnings in the 1920s

Puig Beauty and Fashion Group was originally named for its founder, Antonio Puig, a Barcelona native and son of a wealthy businessman. Puig traveled to France and England as a young man, and on his return to Spain he decided to become a distributor for foreign cosmetics and perfumes. Spain had very little native toiletries industry at the time, and several companies that became Puig's major competitors also set up around this time, just before World War I. Antonio Puig, S.A. was established in 1914, and the company imported perfumes such as the French brands D'Orsay and Ricci. Spain remained neutral during World War I, and its markets flourished. In 1922, Puig began making his own cosmetics in addition to importing. The company launched Milady that year, which was the first lipstick ever manufactured in Spain.

Puig remained a small firm through the 1920s, but the perfume industry began to take hold in Spain. In 1931, Antonio Puig became the first president of the newly formed Spanish association of perfume manufacturers, which was headquartered in Barcelona. Puig established firm business relations with perfumers and essential oil suppliers in France, Germany, and Switzerland. The Spanish Civil War (1936–39) brought chaos to Spain, and the ensuing years under the dictator Francisco Franco saw very different economic conditions than in the prewar years. Franco insisted that Spain's economy be self-sufficient and isolated from international markets. This gave local businesses the opportunity to grow without international competition, but it also put extreme strictures on companies like Puig, which depended on imports. Puig managed to negotiate the new economic reality fairly well, however. In 1939, the company launched Lavanda Puig, an eau de cologne that became one of its best-selling brands. Lavanda Puig was made with Spanish-grown lavender. It was a local product designed for the domestic market, and it became a household name in Spain.

Puig remained a purely Spanish company through the 1940s. Antonio Puig continued to chair the perfume industry association, which had become a compulsory organization under government control. Nevertheless, while Puig manufactured and sold perfumes in Spain, the company was able to maintain its connections to the European perfume industry. Puig had close ties to the German manufacturer Muhlens, known for its No. 4711 brand of toilet water. Muhlens represented Puig's products in Germany in the 1940s. In the 1950s, some of the strictures on the Spanish economy began to relax, and Puig began to explore more international marketing.

Growth Outside Spain in the 1950s and 1960s

By the mid-1950s, Antonio Puig had been joined in the business by his four sons—Antonio, Mariano, Jose Maria, and Enrique. The Puig sons were all educated at a Spanish business college called IESE, which was modeled after Harvard's business school. Puig and his sons began traveling, meeting with Spanish contacts in France, the United States, and elsewhere. These exploratory meetings set up export routes for Puig products, though it was years before the company could adequately expand beyond Spain. In the early 1960s, Puig began creating a more international image for its products, hoping to woo markets abroad. Puig worked with the foremost designers in Barcelona, Andre Ricart and Yves Zimmerman. Barcelona soon became a magnet for modern industrial design. The company's new packaging for Lavanda Puig in 1963 won many design awards. The packaging combined traditional Spanish elements, particularly a wooden cap and raffia ties, with a very modern, industrial-looking flask. This became a signature look for Puig products, described by an analyst of the Spanish perfume industry for Business History (July 2003) as "Mediterranean urban modernity." The Puig look was Spanish but not old-fashioned, and the company began to make inroads into European and North American markets. Spanish consumers also evidently liked the Puig image, which seemed fresh and urban. Puig launched two successful new products in the 1960s. It brought out Agua Brava in 1968 and Azur de Puig in 1969. These remained best-sellers for the company for decades.

In 1968, Puig began a marketing venture with the French designer Paco Rabanne. Rabanne grew up in France, the son of Spanish immigrants, and was one of the most flamboyant designers of the 1960s. Rabanne's designs were thought too cutting-edge for Spain at the time, but Rabanne helped market Puig's perfumes in France. The company was doing well and invested in 1968 in a new manufacturing facility in Barcelona. Puig also established a base in New York around this time, founding a subsidiary, Puig International. Then, in the early 1970s, Puig formed a joint venture, named Isdin, with a Barcelona firm called Laboratorios Dr. Esteve, to develop dermatological products. This led to several new skincare brands.

After Franco: Mid-1970s through the 1980s

When Francisco Franco died in 1975, Spain made a remarkably painless transition to a constitutional monarchy under King Juan Carlos. Spain rapidly turned towards Europe, ending its decades of isolation, and the country experienced a wave of modernization and urbanization. Other European countries had dealt with industrial growth and population shifts toward urban centers in the wake of World War II. Spain was in many ways decades behind. Puig seemed to do well in this era. Its innovative packaging gave its brands a strong association with modernity, a good sell in Spain. Yet there was more to Puig than packaging. The company worked with top fragrance designers, and its laboratory was up-to-date and sophisticated. Puig brought out several popular new fragrance lines in the 1970s. These were Moana Bouquet, Estivalia, and Vetiver de Puig.

Antonio Puig died in 1979, and leadership of the company passed to the second generation. The Puig sons had long been active in the company and were ready to continue the firm's gradual expansion into European and North American markets. In 1981, Puig launched one of its most successful products ever—a men's scent called Quorum. Quorum was a hot seller in the 1980s and was eventually one of the best-selling scents in England. It also had strong sales in the United States, where it became one of the top European fragrances on the market. Quorum won a packaging award in the United States in 1982. Puig continued to present an image of Spanish modernity and also linked its brands with the popular Spanish royal family. The company sponsored international sailing races, building the brand's sporty image and spreading the name of Puig products, particularly Agua Brava and Azur de Puig.

Puig had strong marketing in the United States in the 1980s. In men's toiletry, it was known for its Paco Rabanne line as well as for Quorum. In the 1980s, Puig began a relationship with the Venezuelan clothing designer Carolina Herrerra. Herrerra was thinking about marketing a fragrance when she met a Puig executive in 1984 at a fragrance industry group award ceremony where she was a presenter. She agreed to license her name to Puig. The scent the company produced was a copy of what Herrerra herself wore, a fragrance she mixed on her own out of jasmine and tuberose oils. The packaging, in white with black polka dots, reflected a pattern Herrerra often used in her clothing. The Herrerra scent debuted in 1988 in top-tier U.S. department stores. It also sold in Canada, Puerto Rico, Spain, and the United Kingdom, and later went into other European markets.

Company Perspectives:

One aspect of our activity is reflected in art, in glamour, intuition, passion, taste, and the perception of our society's changing values. The other facet is the most rigorous research, the most advanced design, the continual search for new solutions to the new demands of our customers and the never-ending quest for excellence in everything we do. From fashion and accessories to fragrances, advanced cosmetics, and personal care; we are working, designing, and innovating for you. This is our raison d'etre.

Expansion in the 1990s and Beyond

In the 1990s, Antonio Puig, S.A. consolidated its position in Spain and made further inroads into international markets. In the early years of the decade, the company began making more mass-market personal care goods. It introduced a skin care line called Vitesse in 1990 and then developed a bath and shower line called Avena Kinesia and a line of children's colognes and lotions. In 1995, the company acquired another mass-market Spanish bath and shower line, Genesse. Puig also began distributing the personal care products line of U.S. company Bristol-Myers Squibb in Spain in the early 1990s. Puig also sold over-the-counter dermatological preparations and sun screens through Isdin, its joint venture with Laboratorios Dr. Esteve. By the mid-1990s, Isdin was the market leader, with a share of almost 40 percent of the Spanish sun screen market and over 50 percent of the acne preparations market.

The company put out new scents in both men's and women's lines. Carolina Herrerra brought out a men's fragrance in 1991. This became a top-seller in Spain and also did well in the United States. Paco Rabanne had a strong line of men's scents with Paco Rabanne pour Homme and then XS, which debuted in 1993. XS won awards both for its packaging and for the fragrance itself, which sold very well in France and the United Kingdom. Puig continued its association with designers by signing up an Italian duo in 1992, Victorio and Lucchino.

Puig began a joint-marketing agreement with one of its Spanish competitors, the Madrid-based Perfumeria Gal, in 1995. The two companies set up a joint subsidiary to distribute mass-market personal care lines in Latin America. The subsidiary also distributed Puig's fine perfumes in Argentina. Later that year, Puig bought an 85 percent interest in Perfumeria Gal. Gal was, like Puig, an old family company. It was established in 1901, and since 1905 it had marketed one of Spain's bestknown brands, the soap Heno de Pravia. Gal had had strong marketing in Mexico and Latin America in the 1920s, though this decayed in the Franco years. Gal's Heno de Pravia brand had as much as a 70 percent share of the Spanish toilet soap market, and this remained the company's top seller into the 1990s. Puig's acquisition of Gal gave it a much stronger position in the domestic mass market. It also gave Puig inroads into Gal's Latin American distribution. Worldwide sales for Puig rose to $500 million by 1997.

The Perfumeria Gal acquisition was followed by several others. In 1998, Puig bought the French fashion firm the Ricci Group. The Ricci Group comprised Nina Ricci Perfumes and Nina Ricci Couture. Puig had been associated with Nina Ricci since its earliest years, when Antonio Puig had imported Ricci scents from Paris. Ricci's most famous scents included Deci Dela and L'Air du Temps. Shortly after the Ricci acquisition, Puig announced a change in management. The four Puig brothers stepped down in 1998, and the company was then run by a team of three of their sons and Javier Cano. Cano was the first chief executive to come from outside Puig family ranks. After this, Puig moved quickly, hoping to double its sales by the middle of the next decade. In 2000, the company bought another long-time Spanish competitor, Myrurgia. Founded in 1916, Myrurgia was also a Barcelona perfumery. It had been in family hands, like Puig and Perfumeria Gal, through three generations. It made fine perfumes and had a strong export business, particularly in Latin America. Some of its classic perfumes were Maja and Joya. With this acquisition, Puig gained a leading share in the Spanish perfume market and rivaled the giant French firm L'Oreal in other cosmetics and body care market niches.

L'Oreal, which was the largest player in the Spanish market, was a truly global company. Puig began to take on a similar scale in the 2000s as it pressed into more export markets. By 2000, more of its sales came from abroad than from Spain. France and the United States were the firm's best markets. Puig gained in Germany, too, after its purchase of Myrurgia, which had a German perfume division, Etienne Aigner. Worldwide sales in 2001 were estimated at $783 million. Puig continued its association with Carolina Herrerra in the 2000s. Her scents were big sellers worldwide. In 2002, Puig signed licensing agreements with three more leading designers. The company first snagged Hussein Chalayan, a young Turkish designer who worked in London. Chalayan was a rising star who had never done a fragrance before. Later that year, Puig negotiated a joint venture with the Italian design firm Prada to distribute both perfumes and skin care products under the Prada name. Prada was one of the most prestigious European design houses of the 1990s. Next, Puig signed an exclusive licensing agreement with Comme des Garcons Parfums. Comme des Garcons was a cutting-edge Parisian design firm with a dedicated following in Japan, France, and the United States. Comme des Garcons already had an established perfume line, and in 2000 it had opened its first freestanding perfume shop. The arrangement with Puig called for opening more Comme des Garcons perfumeries worldwide. Puig would also give wider distribution to Comme des Garcons' fragrance lines. Puig's long-term business plan called for strengthening its position in prestige perfumes. These three new arrangements with designers gave Puig a much larger stable of names and talent.

Also in 2002, the company reorganized in order to focus more on coming growth. Puig planned to double sales by 2006. The firm divided into three main divisions, Puig Prestige Beauty Brands, Puig Fragrance & Personal Care, and Fashion. The company name changed to Puig Beauty and Fashion Group S.L. Fashion was by far the smallest division, accounting for some 3 percent of sales, and included the Ricci couture house and the non-fragrance lines of Carolina Herrerra and Paco Rabanne. The Prestige Beauty Brands division accounted for about 47 percent of overall sales. Puig hoped to increase its sales in North America. The Fragrance & Personal Care division, which comprised Puig's mass-market brands, grew rapidly with the addition of Myrurgia and Perfumeria Gal. Puig bought the remaining outstanding shares of Gal in 2002, making the firm a wholly owned subsidiary. About 70 percent of mass-market sales were made in Spain, but Puig believed its products had strong export potential, particularly in Latin America. Puig planned to speed its international growth and also looked to make more acquisitions over the next several years.

Key Dates:

1914:: Antonio Puig founds a company in Barcelona.
1922:: Puig debuts the first Spanish lipstick, Milady.
1939:: The company launches a wholly Spanish eau de cologne, Lavanda Puig.
1968:: Agua Brava brand debuts.
1981:: The company launches a men's scent, Quorum.
1988:: The first Carolina Herrerra perfume is introduced.
1995:: The company acquires a majority of Spanish rival Perfumeria Gal.
2000:: Puig acquires another domestic rival, Myrurgia.

Principal Subsidiaries

Puig USA; Puig Codina S.A.; Myrurgia S.A.; Perfumeria Gal, S.A.; Sucesora de Jose Puig y Cia C.A. (Venezuela); Isdin; Creaciones Victorio & Lucchino; Genesse Hispania; Veritas; Accesoria Selecta S.A.