A display of French cosmetics group L'Oreal at a duty-free shop at the Nice International Airport.Eric Gaillard/Reuters
France’s L’Oréal, whose beauty brands range from Lancôme creams to Maybelline makeup, is stocking up cosmetics in Britain as part of its preparations for Britain leaving the European Union, its chief executive said.
The company is processing the paperwork needed to smooth truck deliveries of its products between France and Britain in the event the United Kingdom leaves the European Union without a negotiated deal, boss Jean-Paul Agon added.
“We’re preparing for all scenarios,” Mr. Agon said on the sidelines of a media event late on Thursday.
He said that a no-deal Brexit would not have a major impact on the group, however, with Britain accounting for roughly 3 per cent of sales, though it was also bulking up stocks in the United Kingdom, where it no longer has a manufacturing base.
Companies in Britain and elsewhere are ratcheting up preparations in the event of a chaotic Brexit in March, after Prime Minister Theresa May’s transition deal agreement with Brussels was rejected by U.K. lawmakers.
Firms from British fashion brand Burberry to U.S. automaker Ford this week indicated they could face hefty bills in such a scenario if trade tariffs rose as a result, while supply chains would also be disrupted.
The French government is also preparing for the worst and a possible “no-deal,” Finance Minister Bruno Le Maire said on Friday. A contingency plan involving 50-million euros (US$57-million) of extra French investment in ports and airports to help them cope with an abrupt U.K. exit from the EU is already in motion.
L’Oréal makes the bulk of its sales in emerging markets, particularly Asia, with Chinese demand for its high-end skin-care treatments driving growth in recent years.
Mr. Agon told analysts in July that the U.K. market was “not in great shape,” with tourist spending down versus the year before on high-end products, and due to more muted consumer sentiment that he attributed to Brexit.
L’Oréal is due to report full year results on Feb. 7.