For the first 150 years of the company, Kiehl’s only managed one store with its products also selling in high-end department stores such as
Neiman Marcus, Barneys, Bergdorf Goodman, Saks Fifth Avenue and Harvey Nichols. Following its acquisition by L’Oréal though, the company expanded from its one Manhattan flagship store to more than 30 stores. Kiehl’s sales have also more than quadrupled, increasing from $40 million in 2000 to past $200 million in 2009.
Compared to its competitors, Kiehl’s states that it spends three to five more times on its upscale natural cosmetic products. At the same time, Kiehl’s merchandise is priced at the lower end of prestige skin care while being distinguished for its simple and straightforward packing which speaks to the old apothecary concept. To this day, Kiehl’s signature products, such as its Blue Astringent, Creme de Corps, and Original Musk Oil, continue to remain customer favorites.
On a local store level, Kiehl’s works to understand each new location and develop a unique approach to that market. For example, for the opening a new store in New York’s Upper West Side, Kiehl’s supported improvements to a local playground in Central Park, a hot community topic at the time. Within the stores, Kiehl’s is known for its focus on customer service and its retail brand experience. Their lab-coated staff undergoes an intensive four-week residency schooling that drills them in the chemistry, use, and application of Kiehl’s products.
In April 2000, the French beauty and cosmetics company L’Oréal acquired Kiehl’s for between $100–$150 million. L’Oréal had pursued the purchase of the company for more than two years, but the real catalyst for a deal came when Kiehl’s had difficulty handling the growing volume of orders due to the company’s growing popularity.
With the purchase, L’Oréal stated it planned to increase the brand’s presence but maintain it as a luxury line rather than a mass-market one. L’Oréal develops and markets a range of outstanding brands in extremely varied distribution circuits in a great many countries. Supply Chain, therefore, plays a key part in the group’s development. L’Oréal’s Supply Chain is integrated and structured around the main sectors of business.
The industrial logistics teams manage production scheduling, plant procurement and subcontracting and manage the warehouses of raw materials and packaging items. The international logistics teams oversee the synchronization of the logistics chain and procurement flow management, manage the catalog of products used in sales operations and coordinate product launches. Lastly, the sales logistics teams manage demand, develop services for the group’s commercial partners and supply the retail outlets. In a complex international environment the teams take several factors into account: quality of service, flexibility, cost control and improving the productivity and quality of logistics sites.
