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The global beauty giant has been greatly affected by the global pandemic and has been forced to close several points of sale in the United States. The health crisis has shaken the lifestyle habits of Americans who no longer consume as they used to, and is therefore one of the main causes.

L’Oréal wants to reorganize from the inside its entire Luxury Goods division, which owns brands such as Urban Decay and Kiehl’s, the department most heavily affected. It is in an effort to better adapt to the new demands of American consumers impacted by the pandemic that the group recently indicated this information in a statement sent to the Agefi-Dow Jones agency.

“L’Oréal USA’s Luxury Goods division has internally announced a plan to reorganize and transform its business over the next six months. This plan includes the closure of certain stores and accelerated investment in growth market segments such as e-commerce and digital“, the group said.

According to the Bloomberg agency, the closure of these stores will result in the loss of 400 jobs out of 12,000. These employees in question will nevertheless have the opportunity to be attached to another department of the group.

It is a heavy sentence for the group because North America is a huge market for L’Oréal representing nearly 30 billion euros in turnover in 2019, or 25% of the group’s total turnover.

If the group’s e-commerce market has worked very well in the United States with an increase of 65% in the first half of the year, this has not been enough to offset the overall losses caused by the habits of consumers who travel much less in store and recommend their beauty purchases online.

The beauty giant must therefore think about new perspectives in order to raise the bar and resume growth in its most profitable department, particularly in the e-commerce market, which has grown sharply by 57% since the beginning of the year on a global scale, where the group is thinking of postponing its investments.

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Featured photo: © L’Oréal[/vc_column_text][/vc_column][/vc_row]