The Clarins group has reported a strong recovery in second quarter net sales, rising by 10.2% against 3.7% in first quarter and first half 2007 sales increased by 6.9% in terms of constant exchange rates to €494.6m. However, the group saw a fall in first-half profits owing to unfavourable currency trends and problems in the US market. Net profits dropped 12% to €37m while operating earnings plummeted 24% to €40m. Operating margin dipped 2.9 points to just over 8% in line with group forecasts. Clarins has nonetheless confirmed its forecast for 2007 as a whole of sales growth of 6% owing to the anticipated benefits from product launches in second half.
Meanwhile, a fresh wave of market speculation on the Paris Bourse over a potential takeover of Clarins by L'Oréal revived the family-owned perfumier's share price which rose 8.2% to €60 after falling from €68 to €58 during the summer. One Paris-based cosmetics sector analyst, who said he preferred to remain anonymous, said "the rumour took off and has no more basis today than it had yesterday". The company has also denied reports that it is to be bought out by L'Oréal, stressing that it is in fact eyeing smaller acquisitions of its own.
Following the death of the founder of Clarins and president of the supervisory board, Jacques Courtins, last March, the market has seen intermittent speculation about a change of control within the company punctuated by intermittent statements from Clarins about its wish to retain its independence. Christian Courtin-Clarins, president of the group board, said recently that the family, which controls 65.1% of the capital and 78.6% of the voting rights, saw no reason to sell its interest in the group.
Jean-Paul Agon, director-general of L'Oréal, did however confirm at the end of August the interest his group might have in Clarins "eventually" and he went on to praise the brand.
A study by the broking group, Oddo Securities, has maintained interest in the issue by naming Clarins as "among potential targets" for acquisition. Oddo has described Clarins as "the ideal prey" because L'Oreal has the means to extract the full value from Clarins in pushing forward the company's presence in international markets.