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Rush To Hair Salons After Easing Of Lockdown To Boost L'Oreal’s Business, Predicts The French Firm


04/18/2020


Rush To Hair Salons After Easing Of Lockdown To Boost L'Oreal’s Business, Predicts The French Firm
Soon after the lifting of restrictions related to the novel coronavirus pandemic in the United States Europe, there will be a rush of customers to the hair salons which help its business to recover quickly, predicted L’Oreal. The beauty product making company added that its sales were already showing an uptick in China where travel restrictions imposed to curb the spread of the coronavirus epidemic have largely been lifted that
 
The closure of airport duty-free shops, department stores and salons in many countries that have enforced strict lockdown measures to prevent the spread of the coronavirus has hit the business and sale of the French beauty firm, which makes Garnier shampoo and Lancome creams.
 
Sale of make-ups have tumbled because of lockdowns and stay at home orders and according to a survey by Jefferies, about 90 per cent of women have halted the use of cosmetics as they are now working from home.
 
But despite a 4.8 per cent year on year decline in revenues for the first quarter, L’Oreal, the biggest beauty firm of the world by sales, sounded a positive forecast for its revenues which can also be a boost for some of its rivals such as the United States based Estee Lauder (EL.N).
 
L’Oreal based its positive outlook on a 6.4 per cent year on year growth in sale in China during the January to March quarter with the easing of the lockdown in the country. 
 
L’Oreal Chief Executive Jean-Paul Agon said that a surge in its e-commerce sale helped in the company’s skin and hair-care products doing well even while people remained at home because of the lockdown. Agon added that the demand for the company’s other items is also rising. There however has been a slowdown in demand for some make-up products because the company’s Chinese consumers are still wearing face masks even while they are returning to work. 
 
“It is not of course a great incentive to wear lipstick,” Agon told analysts. “Once stores will be open again ... I think we will be back to a consumption pretty similar to what we have seen before,” he said of other countries.
 
No earning forecast for 2020 was provided by L’Oreal. But analysts expect the earnings earning for the current year to take a plunge during the second quarter when the lockdown in Europe and the US will hit the company hard. 
 
Agon however forecast that there can be a growth of as much as 10 per cent in the April to June quarter in its sale in the Chinese market – which is the largest market for the company in the world.
 
One of the bright spots in its business this year could be the products for professional hairdressers which the company also provides, L’Oreal said. Agon cited a “dire need” expressed by many women customers about the immediate requirement for a touch up of their hair color.
 
“This frustration will create a strong return trend (to salons),” he said.
 
 (Source:www.nytimes.com)