L'Occitane's brand building pays off in Asia

It is tempting to place French cosmetics company L'Occitane's Hong Kong listing in the context of a general trend of foreign companies taking the logical next step of fund-raising in Asia, where growth is strong and capital abundant.

In fact, the company first toyed with the idea of listing in Hong Kong in 2008, but the near-implosion of the financial system that year made it impossible.

'Back in 2008 it was already obvious to us that the trend was going to be that sales from Asia would be higher than Europe. We wanted to go to where we had the biggest customer base,' L'Occitane chairman Reinold Geiger said. 'Of course we had to pull the offering in 2008, but it wasn't like we had a deadline to raise money or anything.'

Two years later, L'Occitane has finally completed its listing in Hong Kong and began trading last week after raising US$704 million in an initial public offering, despite its shares being badly hit in a week of market turmoil that saw Swire Properties call off its HK$20.85 billion share offer.

An entrepreneur with a background in engineering, Austrian-born Geiger first came into contact with L'Occitane's founder Olivier Baussan in 1991 through a mutual friend. At the time, Geiger was running his own successful international cosmetics packaging company.

Geiger made an investment in L'Occitane in 1994 when he saw that the investment fund that had bought the company in 1992 had installed a management team that was 'very unsuccessful'.

Two years later, Geiger bought the entire company and opened its first stores in Asia - in Hong Kong and Japan - in 1995.