Marc Puig, the beauty boss giving his family wealth instead of power

Marc Puig, chair of the family-owned beauty group behind Jean Paul Gaultier and Nina Ricci, has spent two decades juggling the twin tasks of nurturing his relatives’ corporate wealth while trying to scale back their influence in the company.

Puig’s initial public offering on Friday — which is expected to value its perfume, skin cream and fashion brands at about €14bn — marks the biggest step yet in what the Spaniard has called a process of family “self-disempowerment”.

The IPO of the 110-year-old company comes at a time when Europe’s biggest family-backed beauty groups are navigating succession planning. At LVMH, two more of French billionaire Bernard Arnault’s children joined the board this month while a grandson of François Pinault, another French billionaire and patriarch of the family behind luxury group Kering, joined the board of Christie’s, which is owned by the family’s holding company.

But Puig is taking a different path. He has said that the fourth generation — his children included — will have no role running the Barcelona-based company. “Difficulties can arise, especially in the transition between generations — the search for leadership, a lack of understanding, a loss of passion,” he told the Financial Times last year. The scrutiny of outside investors would help the avoid the “traps” family businesses can fall into, he said.

The 62-year-old, who has a degree in industrial engineering, a Harvard MBA and the solemnity 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 flotation is set to be Europe’s largest so far this year and was “multiple times oversubscribed”, Puig said this week.

The family is selling €1.36bn of shares and, with the company issuing new stock, will continue to own nearly 72 per cent of the business and 92.5 per cent of the voting rights.

The IPO is expected to boost Puig’s profile with the group having flown under the radar compared with its beauty peers, despite owning well-known brands including Rabanne and Carolina Herrera. People outside Spain are even learning how to say its Catalan name, which is pronounced “poodge”.

The premium beauty sector in which Puig specialises has been a bright spot for the luxury industry over the past year and groups 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 transaction with an enterprise value of $2.5bn while Gucci-owner Kering paid €3.5bn to acquire the fragrance brand Creed.

Puig, who has been the group’s chair since 2007 and is also its chief executive, has expanded Puig’s international presence, bet big on high-end fragrances and couture, and orchestrated 11 acquisitions in 12 years, including Belgian designer Dries Van Noten, British make-up maven Charlotte Tilbury and German skincare brand Dr Barbara Sturm.

The deal spree pushed Puig’s revenues above €4bn for the first time last year, when it reported a net profit of €465mn, underpinning the top-of-the-range valuation of just under €14bn set by its bankers.

The company declined to comment on how wealth is divided between the four branches of the family within Exea Empresarial, its holding company.

Puig and his relatives will see a live share price on roughly €10bn of shared equity wealth. Marc separately owns another €83mn-worth of shares and was paid €26mn last year.

“He is a real entrepreneur with a long-term vision who is both decisive strategically and disciplined in execution,” said Francois-Xavier de Mallmann, chairman of investment banking at Goldman Sachs who has worked closely with Puig on its IPO.

Born in Barcelona, Puig joined the family business in 1986 and was sent to work in New York in the second half of the 1990s, where he helped create Carolina Herrera’s 212 perfume and led the North America business. He joined the company’s board in 1999 and became chief executive in 2004.

However, the sailing buff found himself in stormy waters: sales were falling and some product launches had flopped. Business unit leaders were suffering from having to report to four-person committees that included three family members rather than a single boss.

An official history of the company talks about Puig imposing rigour and order, making thousands of employees around the world “operate with the precision of a Swiss watch”.

In a 2021 interview, he reflected that “a family functions with love” but “family companies require hierarchy and meritocracy”. He added: “Sometimes when two systems combine, there are clashes.”

The solution was “self-disempowerment”, which included, for example, having more non-family members than family members on operating, compensation and nominating committees.

In early April, as part of flotation preparations, one of Marc’s brothers and two of his cousins left its now 13-person board and were replaced by two new independent directors. The only remaining family director other than the chair is Manuel Puig Rocha, another cousin and the company’s vice-chair.

Puig said three years ago that the fourth generation would eventually participate in the company’s governing bodies, but would not be part of the management “unless they go through several difficult filters”.

“We’ve made it very difficult because we went through a period in my generation when the processing of choosing the leadership went through choppy waters,” he explained.

Pedro Nueno, a Puig board member from 2004 to 2016 and a professor at the Iese Business School, said: “In the family there is a lot of support for him . . . I think there’s a very good family atmosphere because everyone has all the information, because the company is doing well.”

He said Puig’s strengths lay in his “extraordinary knowledge of the whole industry and the whole company” and his success in training and delegating to talented executives. “He doesn’t decide everything that has to be done.”

Puig’s recent product launches include Gaultier Divine perfume, packaged in a gold bottle in the shape of a female body, and Rabanne make-up aimed at Gen-Zers, inspired by the sparkle and gloss of fashion fabrics.

Puig maintains an austere presence himself in comparison to the extravagance of the brands he oversees. But if he can maintain the flair of its products and keep the family dynamic calm, he will be the happy head of a newly listed business.

Additional reporting by Ivan Levingston