By penetrating other segments with existing brands

In 1991, seeking to take advantage of the success of the Clarins skin care brand, the Group launched its first make-up line (totally revamped in 2007). This was followed by the creation of ClarinsMen in 2002 and two Clarins fragrances in 2005. The other Group brands have also adopted a strategy of leveraging their success in their respective markets with investments in other segments. These initiatives have included Azzaro skin care products for men, AzzaroLab Skin Force and a joint offering of make-up and high end fragrances through Thierry Mugler Beauty.

By strengthening its portfolio with new brands

In 1990, Clarins joined forces with Thierry Mugler to create Angel followed by the purchase of the brand in 1997. In 1995, the Group acquired Parfums Azzaro that already had a strong position in the market of men's fragrances. Clarins has successfully strengthened its portfolio by adding brands offering growth potential and opportunities to explore new territories. Through its investment in Kibio that will enable it to become the majority shareholder, the Group was a pioneer in acquiring a position in the promising segment of organic cosmetics.

With the creation of My Blend by Dr. Olivier Courtin, based on cutting-edge research establishing the link between the lifestyle of women and their skin characteristics, Clarins Group has expanded the range of premium skin care and adopted a new approach to distribution in department stores where there exists strong demand for high quality advice at points of sale. In addition, the Group is currently developing a new brand proposing specific technical care solutions for pharmacies.

2  PROPOSING INNOVATIVE AND CREATIVE PRODUCTS

A pioneer in many areas, the Group has consistently surprised the market with its innovative and creative products. With the Clarins skin care and make-up brand, the Group has pursued a competitive innovation strategy based on the achievements of its research centre, with no budget restrictions. Clarins products have always been recognized for their effectiveness and ongoing improvements in their formulations incorporating the latest breakthroughs by its scientific teams. For fragrances, the Group has focused on developing unique universes before creating the "juice" and the packaging, working with the leading perfumers and bottle designers.

3  BECOMING A MAJOR INTERNATIONAL PLAYER

International expansion was an early priority of the Group that opened its first foreign distribution subsidiary in the United States in 1981. Today, the Group is present in 150 countries through 20 distribution subsidiaries, 140 local agents and 19,000 points of sale. While continuing to support its brands in markets where they are solidly established, the Group is actively pursuing expansion in countries that today offer high growth potential such as China, India, Latin America or Russia.

4  DEVELOPING NEW DISTRIBUTION CHANNELS

Clarins Group has adopted a strategy of selective distribution (department stores, integrated perfumery chains and traditional independent perfume stores) for all its products. In response to concentration in this segment, the Group began to develop new distribution channels. In 2003, it started to open directly-owned Clarins boutiques (currently numbering 14). In France and the United States for the time being, the Clarins, Mugler and Azzaro websites have added e-commerce functionalities for the online sale of their products. Finally, with Kibio, the Group has begun to expand into other distribution channels such as parapharmacies and direct sales.

5 DEVELOPING STRATEGIC ALLIANCES TO OPTIMIZE STRUCTURES
AND CREATE SYNERGIES

Clarins Group has signed exclusive license agreements with Porsche Design and David Yurman in 2006 and in March 2008 with Swarovski to create cosmetic products. These licenses highlight the Group's creative capacities while optimizing its production and distribution capabilities. In the same spirit, distribution agreements have been concluded with prestigious names of the cosmetic sector to further optimize use of the Group's sales forces. Finally, partnerships concluded with the L’Occitane Group in 2001 and Kibio in 2006, in addition to representing promising financial investments, have provided opportunities for synergies and exchanging expertise.

6  STRATEGIC ACQUISITIONS

With a very healthy balance sheet and a net cash balance of €185 million, Clarins Group explores all potential acquisitions that may arise, focusing in priority on skin care and fragrance brands.