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Russia's Standoff With West Hits Major Beauty Companies' 2014 Performance

October 3, 2014: 12:00 AM EST

Russia's conflict with the West over its actions in Ukraine is expected to adversely affect the revenue performance of several beauty and personal care companies in 2014. Companies with major presence in Russia, such as L'Oreal, Unilever, and Oriflame, revealed plans to reduce the impact of the market instability on their operations; however, analysts believe the overall effects of the situation are beyond their control. Russia accounts for only 3 percent of global beauty sales of both L'Oreal and Unilever. Oriflame, however, depends more on the market, which contributed almost 30 percent of the company's revenue in 2013. Market uncertainties are also expected to dampen demand for skin and hair care products, prompting Oriflame to reconsider its plan to open a second factory in Russia. Unilever also put on hold its plan to double production capacity in the country.

Ildiko Szalai, "The Impact of Russia’s Sanctions on Global Beauty Players", Euromonitor International , October 03, 2014, © Euromonitor International
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