L’Oreal to close some stores, cut 400 jobs in luxury shift

Bloomberg

L’Oreal SA plans to close retail locations to restructure its US luxury operations as the company grapples with severe changes to consumer behaviour amid the pandemic.
The Luxe Division of L’Oreal USA plans to shift investment to growth areas such as e-commerce as part of the reorganisation over the next six months, the company said in a statement in response to inquiries from Bloomberg.
L’Oreal said as many as 400 roles in the Luxe Division would be affected in the US,
the company’s biggest market. Some will have a chance to move to another position.
“Modernising its current distribution footprint is necessary for rebuilding the organisation around the future of the
consumer,” the company said. “Luxury consumer behaviour in the US has fundamentally evolved, and L’Oreal USA will be evolving its business to meet these new consumer expectations and preferences.”
The French company, which employs about 88,000 people worldwide, has been struggling through the coronavirus pandemic as people around the world are spending less on pricey perfumes and makeup as there are fewer occasions for social interaction during lockdowns. Even though its e-commerce grew 65% in the first half of the year as consumers treated themselves to fancy things while stuck at home, it wasn’t enough to offset the decrease in overall
demand for beauty products and services. Comparable sales dropped 19% last quarter.
L’Oreal is not the only beauty brand facing cuts. The whole sector has been grappling with rising costs, with Estee Lauder announcing in August plans to trim 3% of its workforce and close 10% to 15% of its free-standing stores.