One of the world's largest cosmetics manufacturers, French company L'Oreal has announced its intention to close some stores in the U.S.
The American market is the largest and one of the most important for brands. Nevertheless, the problems caused by the coronavirus pandemic forced L'Oreal to start reorganizing its retail business. The company will close some stores completely, while others will be converted into online ordering outlets. In total, the reorganization process will take about six months.
Closing some stores (the exact number is not yet known) will inevitably lead to employees' dismissal. It is called the number of 400 people. At the same time, the company states that some of them will be offered the option to move to other positions.
The funds released due to the reorganization will be used to develop e-commerce, the only area that shows stable growth. Thus, in the first half of 2020, online sales of L'Oreal grew by 65% at once. However, this was not enough to compensate for the losses caused by a general decline in consumer interest in cosmetic products.
Speakers of the company statted that buyers' behavior of luxury goods in the U.S. has changed dramatically, and L'Oreal USA will develop its business to meet these new expectations and preferences of consumers. The upgrade of the existing system is one step in that direction.
L'Oreal is not the only cosmetics brand that is going through difficult times. Under the pandemic conditions, consumers began to spend less money on expensive perfumes and cosmetics, which inevitably affected all manufacturers. Economic difficulties and a lack of current demand for cosmetic products in the face of a significant reduction in social contact caused a total decline in retail sales.
Photo credit: depositphotos.com.