Its portfolio of brands says it all: Carolina Herrera, Paco Rabanne, Charlotte Tilbury, Jean Paul Gaultier, Nina Ricci… Puig has become a giant in the beauty and fashion industry with a global presence that awaits this year exceed 4,000 million in turnover. The family business based in Barcelona is preparing the next generational change, a moment that entails risks, as its president, Marc Puig, admits, and that they prepare carefully. Going public, one of the options on the table, is “one of the scenarios, but not the only one,” he emphasizes.

Can it go public?

We haven’t made any decisions yet. Family businesses, and here in Catalonia we have many examples, in each generation they have to find their leadership solution, governing bodies, and way of operating. Now more than 20 years ago, we chose a way of organizing ourselves with the third generation, to which I belong. That has worked all this time and will continue to work for a few more years. Now we wonder if this solution will work for the next generation and that has triggered the rumor mill.

Would it be a good solution?

What we can say is that the leading companies in the world of premium luxury and beauty are usually family controlled, they have a family at their heart. This is the case of the LVMH group (Louis Vuitton), Kering, L’Oréal… And a large majority, but not all, are listed. This system has a number of advantages. Because luxury brands require patience, a long-term view and that is normally given to you by a family, a family business looks more at the next generation than at the quarter. But on the other hand, family businesses have their pitfalls. When there is a generational change there is a risk of fights for leadership, of losing passion or of not finding the right governance solution. And many times, we have seen it with close examples, mistakes or family crises lead to the deterioration of the business project or even a slow death. Being subject to market scrutiny shakes companies. It is not the panacea, it does not provide the entire solution, but it is a good balance between the market, which makes you look short, and the family, which helps you look long. It is one of the scenarios that we contemplate but not the only one.

In any case, if it is decided to go public or another option is chosen, would the Puig family maintain the majority of the capital?

Of course.

And when will the decision be made?

It is linked to the generational transition and that does not happen in a day, it will happen in the next decade, I don’t know when.

In any case, last year he already announced that the fourth generation would not continue in the direction of the company. Does that hold?

The next generational change of the family will not, in principle, be part of the management team, but they will progressively participate in the governing bodies. In companies, and obviously I am an example, the members of the owning family can be part of the management team and until now this has been the case, but when a certain complexity is reached and when the family members begin to multiply, It is better to professionalize management.

What they have already done is convert the parent company into a public limited company, Puig Brands SA. Is it a first step to facilitate this possible IPO?

We had a SL, which has a series of limitations, it does not admit more than 12 members on the board of directors. And we wanted to expand the council to 14, to be able to increase the number of family members from two to five, while maintaining more non-family councilors. And a limited company gives more flexibility regarding other future possibilities.

Last year they recorded strong growth of 40%. What are the prospects for this year?

After Covid, the beauty and perfumery sector, and especially the most selective one, has had a tailwind. The entire sector has benefited, but we have been growing above the rest for three years. In 2022, turnover increased by 40%, to 3,620 million euros, and each of the categories in which we are present, fragrances and fashion, makeup and skin care, grew more than 20%. This allowed us to reach 10% global market share in the fragrance sector. And this 2023 we will exceed 4,000 million in turnover.

What are the main markets?

The first is the United States, followed by England and Spain, which now represents only 7% of sales.

How is this growth above the rest of the sector achieved?

Because of the strength of the brands. 94% of our sales are own brands and only 6% come from licenses. We are where we are because 20 years ago, when half of our business was in Spain and a large part of our products were widely distributed (gels, soaps, shampoos, deodorants), we decided to bet on fashion and selective perfumery and focus all efforts in this activity to be a world-class player. The second important decision was to bet on its own brand and gradually abandon the licenses. In recent times there have been many movements in this sense around the world, it is a global trend, to minimize risks. We have also opted for niche brands (Penhaligon’s, Byredo) and have entered the skin care and makeup sector, bringing all the family brands under the Puig umbrella (Apivita, Uriage) and with the purchase after the company Charlotte Tilbury makeup artist. And finally, a great acquisition process. In 12 years we have made 10 purchases.

When is the inauguration of the new Puig tower scheduled?

The works are practically finished and we will soon begin to install equipment, gradually until the end of the year. We expanded our headquarters in Barcelona with this second Puig tower in Plaza Europa de l’Hospitalet, where we installed our Operations Hub, which will include an innovation center, with 485 workers. There are 20 floors and an area of ??more than 21,000 m2. We thus doubled the surface area of ??the headquarters, which already has 500 workers in the first building. The official inauguration, in any case, will be in the first quarter of next year. We also have new offices in London, Paris and New York and a hub in Miami for travel retail.

What are the future prospects? Continue growing with new purchases?

This is a very dynamic sector. We will continue to grow organically and look to see if there are opportunities for new acquisitions.