L'Oréal to shutter some U.S. stores
According to Bloomberg, L'Oréal is planning to shutter stores in the U.S. in order to restructure the activities of its luxury division, which includes the likes of Lancôme, Kiehl's and Yves Saint Laurent. This reorganization process will last for the next six months and will affect around 400 employees, some of whom will be moved into other roles.
Faced with changes in the shopping habits of American consumers, who are going to physical stores less and less, the luxury division of L'Oréal U.S. is investing in fast-growing areas such as e-commerce and other digital operations.
In 2019, global beauty giant L'Oréal saw a 0.8% decline in its U.S. sales, which totaled 7.5 billion euros. This decrease was further exacerbated by the coronavirus pandemic, with the company's North American sales dropping 15.2% in the first quarter of fiscal 2020. Following the implementation of health measures such as lockdown and mask wearing, cosmetics and fragrance have been some of the worst-hit sectors – two segments that are particularly important for L'Oréal's luxury division in the United States.
The French cosmetics conglomerate isn't the only beauty group to be restructuring in an effort to deal with the effects of the health crisis. In August, New York-based Estée Lauder announced that it was eliminating between 1,500 and 2,000 positions and implementing other economic measures following a quarter marked by a strong decrease in store traffic due to the Covid-19 pandemic. The American company's restructuring strategy principally concerns the Europe, the Middle East and Asia (EMEA) region, and North America.
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