The Cost (and Spend) of Beauty

I really don't want to know what my wife spends annually on those feminine accoutrements that she chalks up to the price of beauty. All I know is that LVMH and L'Oreal must be doing fine by her and her friends. Now at least one of them will be doing even better given that L'Oreal plans to "improve its gross margin further through 'major' productivity gains in its supply chain," according to sources close to the cosmetics and beauty provider. In a recent press conference commenting on its financial results, L'Oreal noted that it is "planning to reduce its number of buying offices to four from seven" and is studying what they term "targeted" partnerships with their supply base to cut costs. On the surface and shareholder level this all sounds well and good, but when I peel back the mud mask on it, I can't help but wonder whether or not L'Oreal plans to pass on the savings to its customers. Probably not. After all, beauty is price -- and margin -- blind. Of course, all of this is much to the chagrin of husbands who don't flinch when their wives spend $30, $40, or even $50 for a single piece of make-up.

- Jason Busch

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