"It’s true that the growth is not broad-based,” RBC analyst James Edwardes Jones said in a note to clients, “but given L’Oreal’s proven ability to identify, stimulate and capitalize on those parts of the business where the most attractive growth is to be had, we struggle to find fault with this.”
The results show luxury’s resilience, as surging demand from Chinese shoppers fueled 14 percent quarterly growth for the division selling brands like Armani, Kiehl’s, and YSL.
Meanwhile, some other manufacturers of products such as automobiles and electronics were hurt by a slowing Chinese economy.
“It’s a real appetite of the young generation in China to go directly to these luxury brands. It’s really positive for us,” Chief Executive Officer Jean-Paul Agon said on a call with analysts. Western Europe showed some signs of improvement and could post a solid year, Agon said, “but nothing that would
compete with what we see in Asia.”
The growth of the global consumer’s appetites for the trappings of modern living is likely to be an upward trajectory for decades to come. The first thing people buy when they have a little more money is soap. That feeds demand for progressively more cosmetics as incomes rise. With economic development peoples’ priorities shift from survival to enjoying life to longevity and the products tailored to those demands increases in price commensurately.