Marc Puig, chairman of the family-run cosmetics group behind Jean Paul Gaultier and Nina Ricci, has spent two decades juggling the twin tasks of tending his relatives’ corporate assets while trying to curb their influence in the company.
Puig’s IPO on Friday, which is expected to value the perfume, skin cream and fashion brands at around 14 billion euros, marks the biggest step yet in what the Spaniard describes as the family’s process of “self-disempowerment”.
The 110-year-old company’s IPO comes at a time when Europe’s largest family-run cosmetics companies are busy with succession planning. At LVMH, two more children of French billionaire Bernard Arnault joined the board this month, while a grandson of François Pinault, another French billionaire and patriarch of the family behind luxury conglomerate Kering, joined the board of Christie’s, which is owned by the family’s holding company.
But Puig takes a different path. He said the fourth generation – including his children – would have no role in running the Barcelona-based company. “Difficulties can arise particularly in the transition between generations – the search for leadership, a lack of understanding, a loss of passion,” he told the Financial Times last year. Control by outside investors would help avoid the “traps” that family businesses could fall into, he said.
The 62-year-old, who has a degree in industrial engineering, a Harvard MBA and the dignity of a finance director, is the grandson of the company’s founder and one of 14 cousins in the family’s third generation.
Puig’s IPO is expected to be the largest in Europe so far this year and is “many times oversubscribed,” Puig said this week.
The family is selling shares worth 1.36 billion euros and, with the issuance of new shares, will continue to own almost 72 percent of the company and 92.5 percent of the voting rights.
The IPO is expected to boost Puig’s profile as the group has flown under the radar compared to its cosmetics peers despite owning well-known brands such as Rabanne and Carolina Herrera. People outside of Spain even learn to pronounce the Catalan name, which is pronounced “poodge.”
The premium beauty sector that Puig specializes in has been a bright spot for the luxury industry over the past year, and corporations have eagerly snapped up or invested in smaller brands. L’Oréal last year bought Australian high-end cosmetics group Aesop from its Brazilian owner in a deal worth $2.5 billion, while Gucci owner Kering paid €3.5 billion to acquire fragrance brand Creed .
Puig, who has chaired the group since 2007 and is also its CEO, has expanded Puig’s international presence, betting heavily on high-end fragrances and couture and making 11 acquisitions in 12 years, including Belgian designer Dries Van Noten, British brand-up -Expert Charlotte Tilbury and German skincare brand Dr. Barbara Sturm.
The flurry of deals pushed Puig’s revenue past 4 billion euros for the first time last year, when the company reported net profits of 465 million euros, underpinning its bankers’ peak valuation of just under 14 billion euros.
The company declined to comment on how assets will be divided among the four branches of the family within the holding company Exea Empresarial.
Puig and his relatives will see a live share price for around 10 billion euros in combined stock assets. Marc separately owns additional shares worth €83 million and received €26 million last year.
“He is a true entrepreneur with a long-term vision who is both strategically determined and disciplined in execution,” said Francois-Xavier de Mallmann, chairman of investment banking at Goldman Sachs, who worked closely with Puig on the IPO.
Barcelona-born Puig joined the family business in 1986 and was sent to New York in the second half of the 1990s, where he helped develop Carolina Herrera’s 212 perfume and ran the North American business. He joined the company’s board in 1999 and became managing director in 2004.
But the sailing enthusiast found himself in stormy waters: sales were falling and some product launches had failed. Business unit heads suffered from having to report to four-person committees that included three family members and not a single boss.
An official history of the company said that Puig imposed rigor and order and made thousands of employees around the world “work with the precision of a Swiss watch.”
In a 2021 interview, he opined that “a family works with love,” but “family businesses require hierarchy and meritocracy.” He added: “Sometimes clashes occur when two systems come together.”
The solution was “self-disempowerment,” which included having more non-family members than family members on operating, compensation, and nominating committees.
In early April, as part of preparations for the IPO, one of Marc’s brothers and two of his cousins left the now 13-member board and were replaced by two new independent directors. The only remaining family director other than the chairman is Manuel Puig Rocha, another cousin and the company’s vice chairman.
Puig said three years ago that the fourth generation would eventually serve on the company’s governing bodies but would not be part of the management team “unless they go through several difficult filters.”
“We made it very difficult because in my generation we went through a period where leadership selection was through choppy waters,” he explained.
Pedro Nueno, Puig’s board member from 2004 to 2016 and a professor at Iese Business School, said: “There is a lot of support for him in the family.” . I think there is a very good family atmosphere because everyone has all the information and the company is doing well.”
He said Puig’s strengths lie in his “extraordinary knowledge of the entire industry and company” and his success in training and delegating to talented executives. “He doesn’t decide everything that needs to be done.”
Puig’s recent product launches include Gaultier Divine perfume, packaged in a gold bottle shaped like a female body, and Rabanne makeup for Generation Z, inspired by the glitter and shine of fashionable fabrics.
Compared to the extravagance of the brands he oversees, Puig himself maintains an austere appearance. But if he manages to maintain the flavor of his products and calm the family dynamic, he will be the happy boss of a newly public company.
Additional reporting by Ivan Levingston