17. Oriflame

Sweden

www.oriflame.com

Beauty Sales: $1.9 billion

Key Personnel: Magnus Brännström, president and chief executive officer; Jesper Martinsson, executive vice president, global sales and marketing and deputy chief executive officer; Gabriel Bennet, chief financial officer.

Major Products: Skin care, color cosmetics, fragrance, personal and hair care, accessories and wellness products.

New Products: Tycoon, Silk Beauty Shower Cream, NY Master Curl Mascara, Volume Boost Shampoo and Conditioner, Mirage Daydream EDT, More by Demi.

Direct seller Oriflame launches 300 products a year.

Comments: Although Oriflame had a presence in 60 countries at the end of 2012, the European debt crisis and a decline in active representatives impacted Oriflame’s results. Sales fell 1% last year due to a 5% decline in the number of units sold, partially offset by a 4% gain in price and mix.

What’s more, sales were weakest in Oriflame’s largest market—Eastern Europe and Russia—which accounts for 54% of sales. Sales within the Commonwealth of Independent States and Baltic region declined 4% overall, due to a 6% drop in sales in Russia. The sales force fell 13% to 1.8 million consultants.

Sales in Europe, Middle East and Africa (28% of sales) fell 1%, even as the number of representatives increased 4% to 900,000. Although sales rose in northern Africa, Romania and Hungary, weakness in southern Europe hampered results. During the year, Oriflame acquired franchise businesses in Kenya, Tanzania and Uganda.

Sales in Asia (11% of sales) rose 12%, with the biggest gains in China, India and Indonesia. The sales force rose 5% to 500,000 consultants.

Sales in Latin America (7% of sales) increased 8%, driven by gains in Mexico. The number of Oriflame consultants rose 7% to 200,000.

In its annual report, the company reiterated its long-term financial goal of achieving a 10% gain in local currency a year.

By product category, color cosmetics accounted for 24% of sales, followed by skin care (22%), personal care and hair care (20%), fragrances (20%), accessories (9%) and wellness (5%). The company says it adds 300 products annually.

The biggest initiative of 2012 was a partnership with actress Demi Moore for product development, endorsement and marketing. The More by Demi collection, which included color cosmetics, body care and fragrance products was said to be a popular addition.

For the six months ended June 30, CEO Magnus Brännström commented:

“We ended the second quarter weaker than expected, however we see a sales growth of 3% in the third quarter to date, and higher in Russia. Our key future growth markets are performing very well. Initiatives to increase sales and efficiency within the Group are being intensified.”

In September, Oriflame India launched a daily care baby care range that is free of paraben preservatives and promotes soft and healthy skin.

Oriflame is a sponsor—and the official cosmetics brand—of the Women’s Tennis Association.