And so beautiful – Newspaper Kommersant No. 235 (7436) of 12/19/2022

The Russian management of the French perfume and cosmetic chain L’Occitane, which this summer changed its store signs to L’Occitane, had to register a new brand, SoBeautiful. According to Kommersant’s information, this was a requirement of the parent company. Renaming outlets could lead to the loss of 15% of loyal customers, experts warn.

The stores of the perfume brand L’Occitane created in France in Russia, which changed their signs to L’Occitane after the outbreak of hostilities in Ukraine, may be renamed SoBeautiful. In early December, the Russian legal entity of the company filed applications for the registration of SoBeautiful and SouBeautyful trademarks, found “Kommersant” in the Rospatent database. The same name is found in several sections on the website of the Russian online store of the retailer, as well as in the domains of the email addresses of the company’s employees. L’Occitane Rus did not respond to Kommersant’s request.

The opening of stores under a sign in Cyrillic in the Russian division of L’Occitane was explained by the separation of the network’s representative office in the Russian Federation from the parent structure. According to the Unified State Register of Legal Entities, since June 2022, 31% in the Russian legal entity belongs to the CEO of L’Occitan Rus Rostislav Petrovich, 23% each to Natalia Milekhina, Olga Sabirova and Alexei Shumakov. All shares in the company are encumbered, the former owner, L’Occitane International SA, acts as a pledgee

According to Kommersant’s source in the retail market, the head structure of the network was dissatisfied with the branding in Cyrillic. Therefore, according to him, it was decided to find another name that would not be directly associated with L’Occitane.

The executive director of the Association of Manufacturers of Perfumery, Cosmetics, Household Chemicals and Hygiene Products, Petr Bobrovsky, does not exclude that after the renaming, L’Occitane will lose some of its customers, since they will not associate the new name with the old brand and decide that the company has left the market. According to Marina Malakhatko, head of the CORE.XP retail department, companies lose up to 15% of customers in situations of forced rebranding. But the real situation will depend on how much the assortment and design of stores will change, she clarifies. In addition, the expert adds, L’Occitane products are also sold in multi-brand stores.

In the event of a ban on the use of individual elements of store design, the Russian company will have to change the interior of the outlets themselves, says Franshiza.ru expert Anna Rozhdestvenskaya. In this case, in order to maintain customer loyalty, the retailer will have to invest heavily in marketing and advertising, adds Petr Bobrovsky.

Marina Malakhatko believes that after renaming the stores will become multi-brand. However, the question remains, what part of the old customers will be able to keep and whether it will be possible to attract new ones, adds Petr Bobrovsky.

As a rule, multi-brand trading platforms with a similar assortment are opened in place of chain stores leaving the Russian market. So, the Turkish FLO Retailing launched outlets with Sneaker Box sports shoes at the site of Reebok stores. And Inventive Retail Group has replaced certified Lego outlets with World of Cubes stores with designers from different brands. In the cosmetics market, a notable example was the launch by Dmitry Azarov, co-owner of the Russian division of Lush, of a new Oomph chain in place of British brand stores with a similar assortment.

Alina Savitskaya