No ‘Nepo-Baby’ Successions, Newly-Listed Spanish Beauty Giant Says

The
Catalan
businessman
running
the
110-year-old
family-owned
beauty
group has
openly
called
for
his
family’s
“self-disempowerment.”

This
is
a
stark
difference
from
Europe’s
biggest
family-backed
conglomerates,
ranging
from
LVMH
(LVMH)
to
Kering
(KER),
where
succession
plans
have
entrenched
family
control.
 

Puig,
however,
has
made
it
clear
that
the
fourth
generation
of
his
clan,
including
his
own
children,
will
not
be
involved
in
running
the
company.

Morningstar
consumer
equity
analyst
Dan
Su
agrees
Puig’s
steps
show
he
is
dedicated
to
injecting
professionalism,
transparency,
and
accountability
into
the
business.  

“It
makes
a
lot
of
sense
because
beauty
is
a
global
market
and
it
involves
a
lot
from
skin
science,
fashion
trends
to
manufacturing,
to
distribution
and
logistics,”
she
says.

“By
including
more
professional
management
into
the
talent
pool
the
company
is
doing
itself
a
favour
in
building
a
high-quality
management
team
to
move
the
company
forward.”

XTB
financial
analyst
Javier
Cabrera
is
not
surprised
either,
despite
the
profitability
family-owned
brands
in
the
luxury
space
have
achieved
in
Europe.

“It
is
true:
you
must
have
some
control
mechanisms
in
place,
even
if
there
is
not
an
advisory
board
that
may
or
may
not
have
executive
powers,”
he
says.

“[There
must
be]
people
who
are
in
touch
with
how
the
business
works
so
the
family
cannot
act
solely
in
the
interest
of
benefiting
their
holding.” 

As
a
case
in
point,
Cabrera
highlights
the
controversy
surrounding
the
Spanish
global
healthcare
group
Grifols,
which
has
been
accused
of
manipulating
its
debt
and
earnings
through
transactions
to
a
company
connected
to
the
Grifols
family.
 

“Because
of
this
Marc
Puig
wants
to
show
that
he
is
transparent
to
the
market
and
to
show
that
something
like
this
cannot
happen
at
Puig,”
he
says.

Despite
this,
the
Puig
Family
still
retains
71.7%
of
the
group
and
92.5%
of
the
governing
rights.
It
is
also
a
managing
shareholder
of
the
group
and
its
minority
business
partners
in
affiliate
businesses
Charlotte
Tilbury
and
Byredo.

A
Welcome
End
To
Europe’s
IPO
Drought 

The
flotation
of
Puig
Brands,
which
also
owns
Paco
Rabanne,
Chartlotte
Tilbury,
and
Christian
Louboutin,
made
headlines
when
the
company
debuted
on
La
Bolsa
de
Barcelona
last
week
at
€24.50
(£21.11).

The
listing,
which
valued
Puig
at
€13.9
billion
(£11.98
billion),
is
the
largest
float
in
Europe
this
year
and
the
biggest
Spain
has
seen
since
2015.
 

The
business
now
holds
the
number
15
spot
on
the
Spanish
Stock
Exchange
for
its
size,
which
makes
it
a
clear
candidate
to
enter
the
IBEX-35,
Spain’s
top
equity
index. 

Su
says
it’s
fair
to
think
shares
have
been
flat-ish
since
the
debut,
though
she
remains
bullish
on
the
business’s
core
fundamentals. 

“Its
share
price
is
not
going
up
a
lot
from
the
IPO
level,”
she
says.

“But
from
the
Spanish
market
perspective
this
IPO
generates
a
lot
of
interest
because
the
Spanish
Stock
Exchange
is
not
one
of
the
bigger
ones
in
Europe.
So,
it
was
interesting
that
they
decided
to
list
in
Spain.

“It
is
probably
fair
to
say
Puig
is
a
high-end
beauty
company.
That
is
how
the
company
has
positioned
itself.
I
would
say
the
competitors
for
Puig
in
this
case
are
more
likely
to
be
L’Oreal
and
Estée
Lauder,
which
are
both
very
strong
in
the
premium
beauty
space,
and
there
is
a
little
bit
of
competition
with
Coty.”

Cabrera
believes
Puig’s
share
price
is
quite
expensive
for
a
newly-listed
business,
but
reflects
the
significant
growth
it
has
already
achieved,
especially
in 2022
and
2023.  

“If
the
company
continues
to
grow
at
a
double-digit
rate
above
15%,
it
will
be
trading
on
a
multiple
that
it
deserves
without
a
doubt,
especially
because
the
returns
on
invested
capital
are
quite
high.
In
2023
they
were
returning
around
30%.

“In
Puig’s
case,
they
know
how
to
bring
in
a
new
company,
they
know
how
to
maintain
the
core
nucleus
of
the
business,
and
that
includes
the
family
members
that
may
be
behind
the
acquired
company,
while
finding
a
way
to
integrate
them
into
the
wider
business.

“That
alignment
of
interests
between
Puig
and
the
company
that
was
acquired,
is
noticeable,
and
it
makes
the
brands
keep
working
in
the
right
way.”

In
the
last
century,
Puig
expanded
into
fragrances
propping
itself
up
as
a
manufacturer
for
other
brands
such
as
Caroline
Herrera.
But
Marc
Puig
pushed
for
the
firm
to
acquire
companies
in
fashion,
make-up,
and
skincare,
which
now
account
for
more
than
90%
of
all
of
the
firm’s
sales.

At
the
time
writing
Puig
Brands
is
trading
at
€26.50
(£22.84).

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