Alès Groupe

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Alès Groupe

99 rue du Faubourg Saint Honoré 75008
Paris,
France
Telephone: +33 (0)1 34 23 50 00
Fax: +33 (0)1 34 23 50 01
Web site: http://www.alesgroupe.com

Public Company
Incorporated: 1969 as Laboratoires Phytosolba
Employees: 745
Sales: EUR 151.9.million ($207.3 million) (2005)
Stock Exchanges: Euronext Paris
Ticker Symbol: 5465; PHY FP; PHY P.PA
NAIC: 325620 Toilet Preparation Manufacturing

Alès Groupe is a France-based producer of high-end hair care and skin care products, perfumes, and cosmetics. The company has distinguished itself through its emphasis on the use of plants and other natural substances for its products' active ingredients. The company targets both the professional and consumer markets with brands such as the Phyto line of shampoos and hair care products; Lierac cosmetics, Phytoderm skin care products, Secret Professionel, targeting the professional hairdresser market; high-end hair coloring products through Laboratoires Ducastel and Kydra by Phyto; ethnic hair care products through PhytoSpecific; and Caron perfumes.

Alès has long carried out its own research and development operations at its Paris headquarters and its main production facilities in Bezons, a Paris suburb, and the Ducastel plant in Castelfranc. The company operates sales and marketing subsidiaries in the United States, the United Kingdom, Canada, Poland, Italy, Switzerland, Belgium, Germany, and Spain. The international market represents the largest part of the group's sales, at 55 percent of total revenues of EUR 152 million ($207 million) in 2005. Listed on the Euronext Paris Stock Exchange, Alès Groupe is led by founder, Chairman, and CEO Patrick Alès. The Alès family holds 66.67 percent of the group's stock.

PLANTING THE SEEDS OF SUCCESS IN THE MID-20TH CENTURY

Patrick Alès arrived in Paris in 1946 to study architecture. After an apprenticeship at the Louis Gervais salon on the Champs Elysees, however, Alès decided to pursue a career in hairdressing instead, and by the mid-1960s had become a well-known name in the high-end Parisian market. By 1965, Alès had opened his own salon, on the avenue Franklin Roosevelt. Success enabled Alès to buy a house in the French countryside, in the Haute Provence, a purchase that was to transform his professional life. In the attic of the home, Alès discovered a number of jars filled with dried flowers and herbs left behind by the house's former owner. Alès quickly developed an interest in herbs and plants, and especially in their potential for use as active ingredients in hair care products.

At the time, hair care products, including shampoos, conditioners and colorants, were based almost entirely on often harsh chemicals. Alès began seeking more gentle alternatives in the plant world, and quickly developed his own preparations, which he began using on customers in his salon. In 1967, Alès trademarked the term "Phytotherathrie" to describe the focus of his hair care products. The term was derived from the Latin words "phyto" (plants), "thera" (care), and "trixos" (hair). Among the products developed by Alès, in partnership with his wife Jacquie, were Huile d'Alès, Phytopolleine, Phytodefrisant, Phytomousse S88, Phytoneutre, Phytocapucine, and Henne Neutre Moussant.

Patrick and Jacquie Alès initially mixed their products by hand at their Provence home. By 1968, Alès had developed the formula for what was to become the company's biggest and longest-running success, Phyto 7. A mixture of seven ingredients, the product soon stimulated demand not only from Alès's often famous clients, but from dermatologists as well. This led Alès to launch a business dedicated to his growing hair care products line, called Laboratoires Phtyosolba, in 1969. Production nonetheless remained on a small scale, based in the Alès family garage, and using an old bread machine as a mixer.

Into the 1970s, the company enjoyed continued growth in demand, and began supplying its products directly to pharmacists, as well as to dieticians and to the health food market, still in its infancy in France. Alès attempted to interest the larger hair care companies in his plant-based products, but found little success. Instead, Alès decided to invest in expanding the company's production. The company moved to new headquarters, on Paris's Faubourg Saint Honoré, launching a training center and building a sales team.

During the first half of the 1970s, as well, Alès turned increasingly to the scientific community, adding an in-house research and development team. Of importance, Alès also sought clinical proof of the effectiveness of the company's products. The first clinical study, on Phytopolleine, was carried out at the Saint-Louis hospital in 1974. Alès's product line built up the support of more than 200 clinical studies over the next decades, including studies conducted by France's prestigious Academy of Sciences and the French National Center for Scientific Research (CNRS).

The Alès company increasingly took on a professional management approach. In 1977, for example, the company founded a new subsidiary, Caster, which took responsibility for the creation and oversight of the group's brands, trademarks, and patents.

COMPANY PERSPECTIVES

Philosophy: Patrick Alès is an enthusiast. Enthusiastic about nature, plants, hair, beauty, fragrances…. When he speaks about plants, his eyes light up. And, he can speak for hours on end about the subject. When he was 25, he discovered the plant world: leaves, roots and extracts, which were dried or reduced to powder form and kept in old jars. These were left by a healer in the farm attic he had purchased in the Haute Provence region of France. He was immediately captivated! He wanted to know everything about their properties, powers. He was a leading hair care professional and had only one idea in mind: To create plant-based hair treatments, which were uncommon at the time. With the help of his wife and some scientists, he transformed his garage into a workshop, where he developed the first PHYTO 7 creams, which he mixed together using an old bread kneading machine that had been thrown out. Today, as in the past, he continues to work with his family and friends. His children help create the products and his friends and customers test them. A precursor, PHYTOTHER-ATHRIE was created in 1967. It was the first cosmetic brand to use the PHYTO prefix. However, his work has not always been easy—but that didn't matter! Patrick Alès has incredible drive and passion. He believed in his project and was determined to carry it through. In 1969, he founded the PHYTOSOLBA Laboratory. He then developed other brands and companies that were related to plants, nature and beauty. Today, this small company has grown into an international group, which was called the PHYTO-LIERAC Group, and then renamed ALES GROUP. Yet, Patrick Alès, a highly imaginative and extremely hard-working man continues to take his work a step further. There is always a small flower or grass growing near his home or on the other side of the world that catches his eye and makes him want to learn more. As he says: "A simple field is like an immense open book, of which only a few pages have been discovered!"

By 1978, Alès had found a major partner, when French cosmetics giant L'Oreal acquired a 44 percent stake in the company, as well as the international distribution rights to the growing Phyto product family. The backing of L'Oreal allowed Alès to extend its growing reputation to the international market.

Alès's products increasingly went further than simple hair care to take the form of health and dietary supplements. In 1974, for example, the company launched its Phytoplage brand of product, providing protection for the hair against the harmful effects of the sun. In 1982, the company launched a veritable dietary supplement, Phytophanere, meant to fortify the hair and nails.

At the same time, the company had begun to diversify elsewhere. In 1979, the company bought Laboratoires Lierac, a company specialized in the production of cosmetics. Lierac had already developed a line of plant-based cosmetics. Under Alès ownership, the company reformulated many of Lierac's products, increasing the proportion of plant-based active ingredients, and reducing the levels of preservatives and other nonnatural additives.

INTERNATIONAL GROWTH IN THE LATE 20TH CENTURY

Through the 1980s, the company continued its quest for new and more powerful active ingredients. This led the company to pick up additional research and development capacity, through the purchase of Laboratoires de Médecine Vegetale in 1983. That business was later transferred to the group's main headquarters site. By 1988, the company had succeeded in developing a new skin care line with an active ingredient based on the skin of grape seeds, launched under the name Lieractiv. In this way, the Lierac name took the forefront of the soon-to-skyrocket high-performance skin care category.

With sales growing strongly, Alès opened a new production facility in Bezon, on the outskirts of Paris, in 1988. The company then transferred the operations of its various product lines, including its research and development activity, to the new plant, while its Faubourg Saint Honore office became refocused as the group's headquarters and main sales office.

The growing renown of the company's products among France's jet set had enabled it to attract an increasingly international clientele. The company began taking steps to bring its products closer to the foreign market in the late 1980s, with the launching of a first international sales subsidiary in the United States in 1989. That subsidiary was joined by a new subsidiary in Germany in 1991. The company also sought to boost its technology, and in 1992, Alès acquired Cosmodex. That company focused on developing de-pigmentation treatments and other dermatological cosmetic products.

Alès began preparations for continued growth in the mid-1990s, restructuring the company's operations under a new holding company, Phyto-Lierac, in 1995. In that year, the Alès family bought back the 44 percent stake in the company held by L'Oreal, and also regained control of its international distribution rights. The share buyback then led to Phyto-Lierac's public offering, with a listing on the Paris Stock Exchange's secondary market in 1996. The Alès family nonetheless retained majority control of the company, with a two-thirds majority into the mid-2000s.

KEY DATES

1967:: Successful Parisian hairdresser Patrick Alès develops the first plant-based hair care products under the Phytotherathrie trademark.
1969:: Laboratoires Phytosolba is founded to produce plant-based products for a wider market.
1978:: L'Oreal acquires a 44 percent stake in Groupe Alès.
1979:: Alès acquires Lierac, a producer of plant-based cosmetics.
1989:: Alès creates a U.S. sales subsidiary.
1995:: Alès is reorganized under holding company Phyto-Lierac, and the Alès family buys back L'Oreal's stake.
1996:: The company lists on the Paris Stock Exchange.
1997:: Ducastel, a hair coloring specialist, is acquired.
1998:: The company enters the perfume industry with the purchase of Caron.
1999:: The company changes its name to Alès Groupe.
2004:: A Spanish sales subsidiary is added.
2006:: The company launches the Phytoprogenium hair care product line.

The public offering enabled Phyto-Lierac to step up its international implantation. In 1996, the company established a sales subsidiary in Italy. This was followed by a Brussels office in 1997, which took over responsibility for the Benelux market. One year later, Phyto-Lierac entered the United Kingdom as well. Supporting the company's growing sales was the inauguration of a new warehouse and logistics facility in Cegry-Pontoise, near Paris.

RIDING THE NATURAL WAVE IN THE NEW CENTURY

Phyto-Lierac also had been building up its range of products and brand names. In 1995, the company acquired the exclusive French distribution rights for the British brand Yardley of London. Also in that year, the company launched a new line dedicated to the professional hair care market, called Secret Professionnel. Two years later, Phyto-Lierac extended its range of hair care products with the purchase of Laboratoires Ducastel, a specialist in high-end hair dyes and other technical hair products. The addition of Ducastel enabled the company to launch a new product line, Kydra by Phyto, of hair coloring products for the professional sector, in 1998.

Phyto-Lierac also entered new territory that year with the acquisition of the noted perfume house Caron. That company had been founded in 1904, and had early success with fragrances such as Narcisse Noir (1911), Bellodgia (1927), and the men's fragrance Pour Un Homme (1934). By then, Caron also had released its highly successful Fleurs de Rocaille. Originally unveiled in 1933, that fragrance was relaunched in 1993. Also in 1998, the company introduced a new line, called Phytospecific, focused on the high-end ethnic hair care market in North America.

Phyto-Lierac changed its name back to Alès Groupe in 1999 as it looked forward to further growth in the new century. The following year, the company made its first step into the retail sector, opening a Caron perfume store in New York City. That opening was soon followed by a second store, at the company's Paris headquarters site. Accompanying the new retail effort was the marketing of two new perfumes, L'Anarchiste, for men, and Lady Caron.

In 2001, Alès acquired its Montreal-based distributor, Jean-Louis Renaud Inc., which was then renamed Alès Groupe Canada. The following year, the company announced a major expansion of its Ducastel site, with plans to double capacity of that facility.

Alès maintained steady growth into the mid-2000s. The company added a new distribution subsidiary in Spain in 2004. In that year, the company renamed its Cosmodex product line under the new Phytoderm brand. This was followed by the acquisition of the company's distributor in Poland in 2005. In that year, as well, Alès stepped up its presence in the United States and Canada with the launch of the Lierac brand of skin care products. At the same time, the Alès Groupe prepared the launch of two new anti-aging hair care brands, Phytodensium, launched in November 2005, and Phytoprogenium, which debuted in May 2006. Alès Groupe had succeeded in establishing itself as a respected name in the global high-end personal products market.

PRINCIPAL SUBSIDIARIES

Alès Group Usa Inc.; Alès Groupe Benelux S.A.R.L. (Belgium); Alès Groupe Canada; Alès Groupe Cosmetic Deutschland GmbH (Germany); Alès Groupe Espana S.L. (Spain); Alès Groupe Industrie; Alès Groupe Italia S.p.A. (Italy); Alès Groupe Polska (Poland); Alès Groupe Suisse (Switzerland); Alès Groupe UK Ltd.; Laboratoires Ducastel; Laboratoires Phytoderm; Laboratoires Lierac; Laboratoires Phytosolba; Parfums Caron.

PRINCIPAL COMPETITORS

Nestlé S.A.; Sunstar Inc; Procter & Gamble Company; Unilever; Johnson and Johnson; E. Merck; Ipiranga Comercial Quimica S.A.; Sanofi-Aventis; L'Oreal S.A.; Natura Cosmeticos S.A.; Colgate-Palmolive Co.; Yves Rocher S.A.