The Organization For International Investment

FDI's $400 Billion Secret Ingredient

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18 FDI's $400 Billion Secret Ingredient L'Oréal USA is the largest subsidiary of the L'Oréal Group, the worldwide leader in beau- ty, and manages a portfolio of more than 30 iconic beauty brands. In addition to its corpo- rate headquarters in New York City, L'Oréal USA has research, manufacturing and distri- bution facilities across 13 other states includ- ing Arkansas, California, Florida, Kentucky, New Jersey, Ohio, Texas and Washington with a workforce of more than 11,000 employees. L'Oréal USA leads America's thriving beau- ty industry and serves as the international hub for the product development and marketing strategy for L'Oréal's 18 Amer- ican brands. L'Oréal has achieved its in- dustry leading position through a balance of organic growth and strategic acquisitions. Some examples of L'Oréal's success in culti- vating local brands include the 2001 acqui- sition of Kiehl's, which has seen a six times growth in U.S. sales; and the 2012 acquisition of Urban Decay, which has seen a two times growth in U.S. sales. L'Oréal USA not only in- vests in developing and scaling local brands, but also invests in the brands' existing oper- ational infrastructure and sustainability ex- cellence. For instance, in 1993, L'Oréal USA acquired the professional brand Redken Fifth Avenue with a 194,000 sq. feet manufacturing facility in Florence, KY. Due to significant capital investments over many years, that facility has more than dou- bled in size to over 500,000 square feet, making it one of the company's largest plants worldwide. Finally, in 2016, L'Oréal USA announced two large-scale solar projects at manufacturing facil- ities in North Little Rock, AR (Maybelline acqui- sition) and Florence, KY (Redken acquisition) and the purchase of local- ly-sourced RECs that will allow the company to achieve 100% renewable electricity for its manufacturing in the U.S. Investing to grow: How M&A helps global brands grow The company's success can be attributed to its ability to identify and scale emerging local brands, and many of its acquisitions— Maybelline, Redken, Kiehl's, Essie, Urban Decay, NYX Professional Makeup and Carol's Daughter—have been focused within the highly competitive American market.

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