The beloved L'OCCITANE, favored by the wealthy women in the county town, has been delisted

Author | Wang Xiaojuan Editor | Zhou Zhiyu Consumers have become more rational, and "the Hermès of hand cream" has increased revenue without increasing profits, leading to new developments in the capital market. On September 13, L'Occitane, a beauty giant listed on the Hong Kong Stock Exchange for 14 years, officially ceased trading its shares until it withdrew its listing status. On the last trading day before delisting, L'Occitane had a total market value of approximately HKD 49.7 billion (approximately RMB 45 billion). This news has been circulating for a long time, with signs appearing since last year and officially concluding in April this year. After a few days of suspension, L'Occitane resumed trading on April 30. At the same time, L'Occitane's Chairman Reinold Geiger announced a buyout of outstanding L'Occitane shares at HKD 34 per share, with funding support from Blackstone Group and Goldman Sachs. This price was 61% higher than the average price of the previous 60 days. On that day, L'Occitane's stock price rose by nearly 13% to a historical high of HKD 33.5 per share, closing at HKD 33 per share. Facing the decision to go private, L'Occitane stated that in the increasingly competitive global skincare and cosmetics industry, the current management team hopes to advance the company's long-term strategy more flexibly, free from the constraints of short-term gains in the public market, in order to better achieve the brand's global expansion and market deepening. Affected by the privatization news, L'Occitane's stock price remained relatively strong for nearly 5 months, reaching close to the planned acquisition price of HKD 34 per share at its peak. Before delisting and going private, L'Occitane released its final financial report. The financial performance report for the fiscal year ending March 31, 2024, showed that L'Occitane achieved net sales of EUR 2.541 billion, a 19.1% increase from the same period last year, or a 24.1% increase at fixed exchange rates. Despite the increase in sales, net profit was EUR 93.893 million, a decrease of 18.4% year-on-year when calculated at the reporting exchange rate, due to high marketing expenses and other costs. Its presence in the Chinese market, where it has been deeply rooted for nearly 20 years, has also declined in the past two years. Currently, China is its second-largest market, while around 2022, China was once its largest market. In the 2022 fiscal year, the Chinese market accounted for 18.4% of the group's total sales. In the following two years, this percentage gradually decreased, first to 14% in the 2023 fiscal year, and in the latest disclosed performance for the previous fiscal year, it was only 12.9%. As "the Hermès of hand cream," L'Occitane is not priced low. In recent years, it has targeted consumers who aspire to buy luxury brands but find it difficult to reach that segment of the market, playing a role similar to "designer lipstick." At its peak, hand creams from L'Occitane were a must-have for many young women. Originating from the lavender homeland of Provence, France, with nearly 50 years of history and stories of natural plant extracts, L'Occitane once dominated major shopping malls during the era of sales upgrades However, with a unit price of nearly 100 yuan/30ml for hand cream, it is still somewhat expensive in the current Chinese hand cream market where the average price is around 34 yuan, and relying solely on one product like hand cream is also difficult to sustain the entire brand. Although L'OCCITANE's shower gel, face cream, and other products have also appeared in Li Jiaqi's live streaming sessions along with hand cream, the best-selling product is still hand cream. Moreover, in terms of product innovation, L'OCCITANE has not made many breakthroughs, with just a few products being repeatedly used daily, which many first and second-tier consumers have already grown tired of. Furthermore, L'OCCITANE has actively targeted the lower-tier market, providing emotional value to affluent women in county towns. Consumers in third and fourth-tier cities have more time, are willing to experience offline stores, and trust recommendations from friends. L'OCCITANE is not considered particularly expensive, but it carries a certain brand premium, perfectly meeting the needs of consumers in this market segment. As a result, L'OCCITANE's gift sets have also become a new choice for many mothers when giving gifts. Last year, the then CEO of L'OCCITANE, Andre Hoffman, stated that the company would continue to expand into China's lower-tier markets, "the group will open 10-15 new stores in third and fourth-tier cities in China." Currently, L'OCCITANE has opened multiple stores in relatively high-potential third and fourth-tier cities, with at least one store in most mainstream prefecture-level cities. Seizing the lower-tier market also means more opportunities. In recent years, L'OCCITANE has faced the issue of a relatively single product structure. Through this privatization, the brand aims to deepen its market independently without being influenced by stock prices. After privatization, whether L'OCCITANE can create another classic best-selling product like hand cream will depend on the specific performance of its future products. At the same time, the competition in the global beauty and personal care market is becoming increasingly fierce, and L'OCCITANE also needs more competitive strategies to maintain its position