tv The David Rubenstein Show Peer to Peer Conversations Bloomberg March 13, 2019 9:00pm-9:30pm EDT
you said you are in charge. jean-paul: no one wanted to take it. [laughter] david: people are happy when they usual products. jean-paul: you make people happy. david: can you tell the difference in brands? jean-paul: not from far away. david: a four-week vacation, is that a requirement to be french? jean-paul: -- david: -- jean-paul jean-paul: -- >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was
fixed, but ok. just leave it this way. alright. ♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? as archaeologists have discovered, you go back several thousand years, there was cosmetics and other beauty products in egypt and other places in the middle east. what are we doing to make people more beautiful today than they did thousands of years ago? existaul: l'oréal did not thousands of years ago. the first beauty product we discovered, was discovered 100,000 years ago.
kindwomen, started to use of makeup, beauty treatments, so it is a long story. david: were they sold the department stores? [laughter] jean-paul: there were flintstone department stores. [laughter] david: i assume mostly for women in those days? jean-paul: i was not there. [laughter] david: ok. jean-paul: i am not sure. both men and women were using colors. david: i am not the next bird in cosmetics. -- the next for in cosmetics. i've bought some cosmetics. jean-paul: thank you. david: the first thing is i smell the fragrance of perfumes, and everything is on the first floor, why is that? jean-paul: first, beauty
products bring traffic, so for the stores, it is an opportunity to bring people to their store. when they enter the store, they are at the beauty space, and it is a great business opportunity. why it smells fragrant is because people are testing the products, and it smells great. you should go more often to department stores. david: right after this i will probably go back to another one. how about online? jean-paul: it is growing very fast. it was almost nothing five or six years ago. ,ow, depending on the countries five, 10, 20%. david: are there certain countries where cosmetics, perfumes, hair dyes are sold frequently? is that the united states were they use it as a percentage more
in europe or asia? jean-paul: every part of the world has a difference. in the u.s., women use a lot of makeup. in europe, they use a lot of fragrances. in asia, and they use a lot of skin care. so there are specialties across the world. david: let's talk about l'oréal itself. it is based in france. your biggest market is the united states? jean-paul: the business and france is still small, 7% of the total. the u.s. is the number one market, 25%. now asia is strong too. asia, china will become bigger and bigger. there are billions of consumers there. david: let's talk about how you came to l'oréal. you corrupt -- jean-paul: harris. david: did you say i want to run l'oréal one day? jean-paul: not really.
when i was 15 years old, i was trying to understand what job i want to do. i had three ideas. one was to be a psychiatrist. how you say it? david: eight psychiatrist -- a psychiatrist? jean-paul: yes, or a movie director. david: ok. jean-paul: for business. i chose business. in my job every day, i do a little bit of the three. [laughter] jean-paul: marketing is understanding the desires and .reams and wishes of the people it is a lot about movie direction too, because you create the images and everything. i was it able to put it all together. david: i think you took a finance class in school. the professor said you are good in marketing, not finance, right? jean-paul: yes, yes.
i know you are a finance expert. i have to admit i am very bad and finance. i chose the finance major because it was trendy at the time. every business case about finance, i always recommended to change the advertising. [laughter] jean-paul: the guy said at the , you are gifted, but not finance. do marketing. david: how did you come to l'oréal? jean-paul: i went to business school. at the end, in fact, once i knew i was made for marketing i really looked for the most interesting marketing. think that still beauty is what i call the supreme art of marketing. because it is really about understanding on the technicalities, but also
intuition, perception, corporation -- creation. david: they said you are now in charge of greece. jean-paul: yeah, i did not arrive like that. it was a bit more shaky than that. i started as a sales man. you always start as a sales man for one year, then i did some marketing, finally, and there was a bit of turbulence. once i was called by the big head of hr at l'oréal at that time, and i was afraid because i thought maybe they were going to fire me or something. , we wantaid, jean-paul you to go to greece and take over the subsidiary has general manager. i was extremely, wow, proud, happy, surprise. david: 24 years old. jean-paul: so i went there and realized, number one, that the
business was extremely tiny. number two, in a terrible state. number three, more importantly, the people at l'oréal had proposed a job to almost everyone, and no one wanted to take it weird [laughter] -- to take it. [laughter] jean-paul: i was the only one. david: you did the job. jean-paul: yes, i loved it. david: what did you do next? jean-paul: i spent five years increase. i loved it. i learned everything in greece. i learned marketing, sales, human resources, finance. back and i became the general manager of the l'oréal paris brand in france. david: you were put in charge of asia? jean-paul: i went to asia and
started all the subsidiaries in asia. david: in china, people were using cosmetics, but not l'oréal ? jean-paul: at that time, no. ,e had no subsidiary, no team no nothing. we started everything in 1997, which was a bit late. many of the competitors were already there. we started with 10 people in an apartment. china,are number one in and china is a major part of our growth and business. asia, youer china and were put in charge of the u.s.? jean-paul: yes. david: was your english perfect then as now? jean-paul: thank you for the thank you. it is still difficult for me. i have a few words that are still difficult. david: it is pretty good. how long did you live in new york? jean-paul: five years. i arrived two days before
september 11. i told my wife before i came here, you know, we go to new york. it is fantastic, safe, quiet, easy. we arrived the weekend before. the kids started school today before, a monday, and september 11 happened on tuesday. toid: you later moved back france and became ceo in 2006. chairman and ceo in 2011. jean-paul: yes. david: the stock is up 200%. jean-paul: more. [laughter] david: ok. jean-paul: 400%. david: 400%. while. -- wow. that is pretty good. jean-paul: it is not finished. [laughter] david: the market cap is $140 billion. what was it before this? jean-paul: four times.
♪ david: let's talk about some of the things you'd did. one thing you have been focused on is gender equality. jean-paul: two thirds of the employees at l'oréal are women. , 50% of% of the board all management. so we are doing everything. david: some of your major competitors, very good companies like estee lauder.
jean-paul: i heard about them. [laughter] david: the ceos are often men. the people in charge of duty products are men. does that strike you as unusual? jean-paul: it will change. it was in the beginning more men. yearstely in the next few women will take over. be, certainly a woman will become ceo. [applause] david: sustainability is another major push. what are you trying to do? jean-paul: the carbon disclosure authorityhe cdp,, the in the environment. the aaa recognition for the third year in a row, force, water -- we are on this matter recognized
as the number one company in terms of sustainability. david: another push has been strong ethics. why is it so important? i understood have fixed be something very important for the future. decided with the team that l'oréal should be, could be number one in ethics. if i may say two words. , it isthink of l'oréal not that difficult for us to be a great company, sustainability. ethics is not a problem in our industry. and gender equity also. we could have said it is not difficult, so let's forget it. is not that is that difficult, so let's be the number one in the world. david: ok. let's talk about your products. your brand names.
,he l'oréal brand name, is that you sell a lot of products under that name? jean-paul: 25% of sales. brands, international brands, and l'oréal is just one of them. it is the only brand we did not five. it was the brand we started with. all the of their brands in the portfolio we purchased. land: this is lenchon -- come. jean-paul: it is beautiful. it is upscale, extremely successful. the number one luxury beauty brand in the world. david: there is another brand, urban decay. that does not sound like a name for somebody who would think this is a great product. something -- so why is urban decay a good name?
jean-paul: i agree. lancomeumers will love don't love urban decay. it is edgy, surprising, disruptive. there are consumers who love that. david: you own maybelline? where is that sold? in department stores? jean-paul: drug stores, walmart, target. david: if some woman is wearing maybelline lipstick, could you tell it is not l'oréal lipstick? can you tell the difference in the brands? jean-paul: not from far away. [laughter] david: i guess that is the point, ok. jean-paul: -- david: you have all these products and you are a man and don't use these products. presumably your wife uses these. jean-paul: of course. david: who makes the judgments about whether it is a good
product? jean-paul: the presidents of the brands. we are decentralized. we are operationally very decentralized. ,here is for each brand a team what we call an international marketing team. there is a president for each brand. david: they don't have to come to you for each product to get approved? jean-paul: no. david: pleasure wife sampled them for you? jean-paul: she couldn't not try the thousands of parts we are launching every year. david: a woman could be over 100 and she is still using cosmetics? jean-paul: absolutely. it is a great opportunity. with the aging of the population for the beauty industry and l'oréal in particular, it is great. not only the longer you live, the longer you use video products, but the longer you live, the more unique great quality products. david: people are happy? jean-paul: absolutely.
it is important. we are convinced at l'oréal that it is a great industry. it is a great job. you make by creating beauty products, you make people more happy, have a better self-confidence, self-esteem. it is a very positive thing. david: do you think anybody can spend too much money on cosmetics? jean-paul: no, it is not expensive. [laughter] jean-paul: the budget allocated to beauty products is limited, 2% or 3% of your income, so it is ok. it is fine. it makes your life are beautiful and contributes a lot to your quality of life. it is a cheap way to improve your quality of life. david: what products do you have for men who are in their 60's who don't want to look like they are in their 60's? jean-paul: -- it is fantastic.
it is an american brand. david: what does it do? jean-paul: for me personally? look. everything. [laughter] david: what is the best way to get a job with l'oréal? jean-paul: call me. [laughter] david: really? great. it might be tough to get a hold of you. jean-paul: very easy. you can female me. i answered -- email me. i answer them every day directly. ♪
when you want to have somebody in the office in august in paris, you can't get them in the office. is that a custom or something? jean-paul: no, but is a habit. i used to take two weeks vacation. when i was in asia, i think i did not take any vacation. when i came back to france, i thought the french were crazy to take a four-week vacation. after a while, i like it. [laughter] david: when you are with president macron and his wife that she say is this a good product? that she asked for beauty tips? jean-paul: she loves the l'oréal products. [laughter] jean-paul: i am serious. i was with her last week. david: ok. , howted to ask you today
do you think the u.s.-french relations are? jean-paul: the relations between french and americans are excellent. at the political level, there may be a bit different, but not the most important. most important is the quality of the relationship between the people. i had the expense when i was here in 2004, there was a time in 2004, this french bashing started with freedom fries. even at that time, when the relationship in terms of political agenda were tough, the relationship, people were always great. david: for a a lot of business people in france, you are a role model. what would you say is the secret to being a good business leader? jean-paul: for me, the most important is low for to do. i was very lucky because when i joined l'oréal, after a few
weeks, i knew this company was made for me. it was obvious. ,nd when you feel like that when do love what you do and you are happy to wake up every morning and do what you have to do, after that, it is an easy journey. david: do people always try to get free products from you? lots of people say i am having a thing?r some charity do you have a division that decides where the give free products outboard not? jean-paul: when they want free products from us, it means they liked them, so it is ok. i encourage that. david: how is l'oréal approaching e-commerce, especially products difficult to market digitally, color match foundations, perfumes, and how do you compete with digitally-native brands that are building engaged communities online? jean-paul: we compete very well.
in china, e-commerce is for our mass products from is 50% of the business. globally speaking, our e-commerce has grown by 40% last year, which is fast, much faster than the market itself. it represents now more than 10% of sales. we are competing very well. david: what is the best week to get a job with l'oréal? jean-paul: call me. [laughter] david: that might be cut to get a hold of you. jean-paul: very easy. you can email me. i answer them every day directly. it is very easy. suppose somebody wants a senior-level job? jean-paul: what ever job. if a woman comes close to you and she has perfume on, can you tell if it is a l'oréal? jean-paul: normally, yes.
not always. david: if she is wearing cosmetics come into contact if she is wearing l'oréal? difficult.it is very you have to get very close, which sometimes is tricky. david: is there anything that makes you nervous that knife because the world's troubled in certain areas related to your company? jean-paul: my number one strength is i sleep very well. david: really? jean-paul: i sleep eight hours a night, every night come and nothing wakes me up. david: really? --n-paul: maybe it is not but it is the truth. david: well, you are fortunate to be able to sleep that long. jean-paul: i saw that jeff bezos -- david: he said eight hours is what he needs a night. he is still young. his 60's, i doubt he will make it through the night without waking up, but you never know.
i want to thank you very much for giving us insight into what it is like to run a major duty products company. i want to thank you for the advice for things i can do to look better. jean-paul: thank you for having me. it is a great honor. [applause] jean-paul: thank you, david. ♪ want more from your entertainment experience?
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