Guerlain

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Guerlain

125 rue President Wilson
92595 Levallois Ferret
France
(33) 01 41 27 32 16
Fax: (33) 01 41 27 31 00
Web site: http://www.guerlain.fr

Wholly Owned Subsidiary of Moet-Hennessy Louis
Vuitton (LVMH)
Incorporated: 1828
Employees: Not Available
Sales: FFr 2.1 billion (US$390 million) (1995)
SICs: 2844 Toilet Preparations

Few names are as famously fragrant as Guerlain. One of the oldest continuously operating perfume houses in the world, Guerlain has created some of the world’s most durable fragrances over its 170 years—indeed, many of Guerlain’s perfumes are said to capture the spirit of their times. From the legendary Jicky to the best-selling Shalimar and Samsara and the company’s most recent, Champs-Elysées, introduced in 1996, Guerlain’s scents have established a worldwide reputation for quality, luxury, and elegance. In conjunction with its perfume products, Guerlain also produces bath accessories and skin care products, as well as cosmetics and skin care products under the Issima name. Guerlain operates a chain of 23 boutiques throughout the world, continuing the long-held policy of direct marketing and individual customer service that has enabled the company to remain at the forefront of perfume fashions. Perfumes form approximately 60 percent of Guerlain’s total sales; Shalimar and Samsara each account for 15 percent of Guerlain’s perfume sales. The company sees more than 70 percent of total sales outside of France.

Since 1994 Guerlain has been a subsidiary of Moét-Hennessey LVMH (FFr 30 billion in 1996), when this world leader in the luxury goods segment, led by Bernard Arnault, purchased a majority share of the family-owned perfumer. As such, Guerlain joins such other prestigious names in perfumes and fashion as Christian Dior, Givenchy, Kenzo, Christian Lacroix, Louis Vuitton, Berluti, and champagnes including Moét & Chandon, Veuve Clicquot Ponsardin, and Pommery. The acquisition, while ending Guerlain’s long independence as a family-owned and operated company, valued Guerlain at more than FFr 4 billion, double the company’s annual revenues. In 1996 Moét-Hennessey Louis Vuitton (LVMH) completed its acquisition of 100 percent control of Guerlain. Christian Lanis has served as president of Guerlain since 1994; however, Jean-Paul Guerlain, the company’s “nose” since 1956, continues to participate in the creation of Guerlain perfumes.

The Emperor’s Perfumer in the 19th Century

The Guerlain dynasty was founded by Pierre-François-Pascal Guerlain in Paris in 1828. Born in Abbeville, Guerlain left home at a young age, reportedly to escape the violent nature of his artisan father. Guerlain journeyed to London, where he received an education as a chemist. Upon his return to France, Guerlain went to Paris, where he set up shop on the rue de Rivoli as a “perfumeur vinaigrier” (perfumer and vinegarmaker). Initially, Guerlain sold products imported from England—already attracting an upscale clientele. It was not long, however, before Guerlain began creating his own products, establishing a studio on the Place de 1’Etoile.

Although the “chemistry” of the time bore little resemblance to the exact science of the next century, Guerlain’s background nonetheless gave him a strong knowledge of basic materials and an appreciation for, and insistence on, materials of the highest quality for his own preparations. Before long, Guerlain’s catalog boasted a variety of creams, lotions, ointments, and oils, including a creme “Nivea” and bear fat from Canada, but also cosmetic products, such as nail polish. To these, Guerlain quickly added his own fragrance compositions. It was not long, however, before Guerlain began concentrating his efforts on developing perfumes.

Although scents had long been popular in France, an actual perfume industry barely existed in the early 19th century. The use of eau de cologne, particularly in a country that had not yet adopted the habit of regular bathing, formed an integral part of the personal care routine. Perfumes, however, tended to be regarded with some disdain—accepted for the scenting of handkerchiefs and, perhaps, clothing, but the preference of the era for the body’s natural odor and a socially coded modesty, which frowned upon individuality, kept perfumes from the skin. Guerlain would become credited for changing much of this perception and for helping to usher in the rise of a true perfume industry.

Guerlain’s shop provided him with proximity to his clients and afforded him a keen awareness of the type of products they desired. This early “direct marketing” would become a company hallmark, but it also allowed Guerlain to introduce the concept of personalizing his perfumes. In this he was aided by no less a personage than Honoré de Balzac, who commissioned Guerlain to create an eau de toilette for Balzac alone—the scent by which the author would write César Birotteau. A new trend began, and Guerlain found himself in demand to create personal scents not only for his clients—or as gifts of tribute made by a client to another—but also to scent a specific party and even to perfume the pages of a magazine, La Sylphide, Journal des Elégances. By 1840 Guerlain had moved his shop to the fashionable rue de la Paix, serving clients from all over Europe, including the Queen of Belgium and the Prince of Wales. Soon after Guerlain established a new factory at Colombes.

The creation of personal scents was not only the work of satisfying his clients, but it also allowed Guerlain to establish a distinct reputation among the rising numbers of competing perfumes. By the mid-1800s Guerlain had become not only the most fashionable, but also the most expensive perfumer of Paris. Literally crowning this achievement, Guerlain, in 1853, created his Eau de Cologne Impériale, for the Empress Eugénie. Guerlain was granted the title of supplier to Emperor Napoleon III.

Modern Perfumes into the 20th Century

Pierre-François-Pascal Guerlain died in 1864, having established the house of Guerlain as a center point in the growing perfume industry. Sons Gabriel and Aimé inherited the perfumery. Gabriel Guerlain assumed direction of the company’s commercial activities, aligning Guerlain with developments in marketing and production techniques. Aimé, the older brother, became the company’s “nose” and creator of a new range of perfumes. By the 1880s fashions were changing and society was slowly abandoning its reluctance in regard to the wearing of perfumes—a movement encouraged by such Guerlain creations as Fleur d’Italic, introduced in 1884, Skiné, created in 1885, and Rococo, in 1887. Two years later Aimé Guerlain ushered in the modern era of perfumes.

The perfume was Jicky, named for the nickname of Gabriel’s son Jacques. More than another scent, Jicky represented a revolution in the perfume world. Whereas previous perfumes had simply represented natural scents, or compositions of ingredients meant to mimic bouquets of flowers, Jicky offered an entirely new scent, one that did not exist in nature. Advancements in chemistry made since the 1830s had succeeded in isolating odor-producing substances—which could then be reproduced synthetically. Other synthetically produced substances could be used to suggest the scent of flowers and other natural substances, which were either difficult to extract or too expensive to produce for perfumes. Yet it took Aimé Guerlain to recognize the significance of this progress, and Jicky became the first perfume to incorporate synthetic ingredients vanillin, coumarin, and linalool with natural ingredients such as mink oil, lavender, and bergamot to create an entirely “new” fragrance.

Presented at the 1889 Universal Exposition in Paris in the shadow of the “temporary” structure, the Eiffel Tower, Jicky was perhaps too new. Acceptance came only slowly to the perfume, but by the turn of the century, Jicky had marked the perfume world much as the Eiffel Tower had transformed the Paris skyline. The age of the true perfume artist had begun, inspiring such early 20th century creations as Coty’s L’Origan, Chanel’s No. 5, and Lancin’s Arpége, all based on the use of synthetic ingredients. Aimé Guerlain continued to create for the house, introducing Excellence in 1890, Belle-France in 1892, and Cipricime in 1894.

In 1895 Jicky himself—that is, Jacques Guerlain—succeeded his uncle as the Guerlain company’s “nose.” Seconded by Pierre Guerlain, who moved the company to more modern manufacturing facilities at the turn of the century while assuring the company’s commercial direction, Jacques would maintain the Guerlain family tradition as a cornerstone of the French perfume industry, creating some of the most famous names in perfumes over his 60 years as the company’s nose. Jacques Guerlain would produce some of the more provocative names in perfumes, such as his first, in 1895, Jardin de mon curé (Garden of my parish priest), and the 1900 Voila pourquoi j’aimais Rosine (This is why I loved Rosine). If perfumes had become art, they had also become an important French industry, employing more than 20,000 at the beginning of the 20th century and representing an important source of exports.

Jacques brought an artistic element not only to his fragrances, but also to his perfumes’ packaging: the introduction of a new perfume became a total concept, including the design of the perfume bottle, its label, and graphics. Guerlain began an association with another famed French name, when the Baccarat crystal company provided the bottle for Champs-Elysées, in 1904 (the company would launch a new perfume under this same name in 1996). In terms of marketing, this new approach to packaging represented a turning point in the industry, as perfumers would discover that the design of a perfume’s bottle could play a role almost as important as the scent itself in determining a customer’s purchase. Indeed, many later perfumes would be created to fill a particular bottle design and to answer to a name.

Jacques Guerlain’s creations through the first half of the 20th century were numerous. Aprés l’Ondée, introduced in 1906, would remain in the company’s catalog into the 1990s. L’Heure Bleue, created in 1912, became a classic of the perfumes of the prewar era. In 1914 Guerlain opened a second store, at 68, avenue de Champs-Elysées, which would later serve as the company’s headquarters address as well. Mitsouko (1919) inaugurated the postwar period, but it was Shalimar that would capture the spirit of the Roaring Twenties. Introduced in 1925, it would establish the Guerlain name in the increasingly important North American market. In the 1930s, Liu (1929, reintroduced in the 1980s) and especially Vol de Nuit, inspired by the Saint-Exupéry novel, maintained the Guerlain tradition. The company opened its third retail boutique on the place Vendome in 1933; in 1938 the company opened its Institute of Beauty on the Champs-Elysées.

New Guards in the Late 20th Century

The Guerlain factory was destroyed by bombardments during the Second World War. A new factory was built in Colombes in 1947; in that same year the company opened its fourth boutique on the rue de Passy. In the 1950s Jacques Guerlain prepared to pass along the family tradition. His last perfume, Ode, was introduced in 1955. The following year, Jacques’s grandson, Jean-Paul Guerlain, assumed the creation of the company’s perfumes and proved to be as innovative as his predecessors, introducing Vétyver in 1959, the first of a long list of classic perfumes.

Under Jean-Paul Guerlain, the company would also expand and update its related beauty, makeup, and skin care products, replacing the family’s traditional recipes with carefully measured scientific formulas and introducing the concept of expiration dating to assure the freshness of its products (and to encourage fresh purchases). Through the 1960s Guerlain introduced such fragrances as Chant d’Arômes (1962) and the men’s fragrance, Habit Rouge (1965), capping the decade with the innovative Chamade.

A new factory was built in 1973 in Chartres, followed by the introduction of Parure in 1975. At the start of the 1980s the company launched a new line of personal care and beauty products, Issima, and new lines of makeup, including Terracotta in 1984 and Métérorites in 1987, which helped the company expand into the emerging Asian countries. The company also continued to open boutiques in major cities around the world, bringing the number to eight by the end of the decade. In 1989 Guerlain had a new hit on its hands, with the introduction of its Samsara line of perfumes and beauty products.

With Jean-Paul Guerlain approaching 90 years of age at the end of the 1980s, the family-owned company recognized that it would soon face a problem of succession. The 25 Guerlain heirs formed a family holding company, Djedi Holding SA, to group their interests; at the same time, Moët-Hennessy Louis Vuitton made its first entry into the company, purchasing a 14 percent stake in Guerlain.

By the beginning of the 1990s, Guerlain faced an industry that had undergone a vast transformation. The trend had become one of consolidation—and conglomeration—spearheaded by such giants as LVMH, L’Oréal, and Sanofi. In 1993 Guerlain remained among the last of the independent perfume houses, faced with the massive marketing clout of the new perfume industry giants. The changing economic climate, from the heady boom years of the 1980s to the worldwide recession of the early 1990s and the extended European economic crisis, was also catching up to Guerlain. While its revenues hovered around FFr 2 billion in the first years of the 1990s, its profits were slipping slowly. Meanwhile, its catalog was aging, with its last grand success, Samsara, dating from 1989. At the same time, a family successor to Jean-Paul Guerlain was not immediately apparent.

In 1994 the company agreed to be acquired by LVMH. The acquisition, delicately dubbed a partnership by LVMH leader Bernard Arnault, would occur in two stages. The initial stage granted LVMH, primarily through its Christian Dior holding, 58.9 percent of Guerlain. The Guerlain family, which received shares in Dior valued at nearly FFr 2 billion, retained for the time being creative control of the company, under Jean-Paul Guerlain. But Arnault installed Christian Lanis, formerly of Unilever, as Guerlain’s president. Nevertheless, Arnault pledged to Le Monde, “Guerlain would remain an autonomous company.”

That autonomy would seem short-lived. In 1996 LVMH completed its takeover of Guerlain, when the Guerlain family, through Djedi Holding, exercised their option to sell the rest of their shares to the luxury goods giant. The purchase of the remaining shares cost LVMH more than FFr 1.8 billion. While Jean-Paul Guerlain continued to create for the company, Guerlain’s next product launch was to mark the beginning of a new era. Unlike its predecessors, Champs-Elysées, which received a worldwide launch in 1996, was not the creation of a Guerlain “nose.” Instead, Champs-Elysées, developed by Christian Lanis, evolved first and foremost as a marketing concept, responsible for adding a floral note to the Guerlain catalog while attracting a new generation of Guerlain customers, particularly customers among the crucial Anglo-Saxon market. With a promotion budget estimated at US$50 million for 1996 and US$100 million for 1997, sales of the new perfume line were expected to equal those of the company’s venerable and top-selling Samsara and Shalimar perfumes. Despite Guerlain’s entry into the modern reality of perfume marketing, the Guerlain name, backed by the financial clout of LVMH, would continue to represent a five-generation tradition of quality.