PARIS: L’Oreal is launching cut-price products to boost sales in the weakened  economic environment but the head of the French cosmetics giant said this will not be at the expense of its profitability.

“We will preserve both (our sales and profit margins),” chief executive Jean-
Paul Agon said yesterday in an interview published in French newspaper Le
Figaro.

On Monday, the world’s biggest beauty- products group posted full-year sales growth below its twice-revised target.

The French maker of Lancome lipstick and Biotherm creams said annual sales rose 3.1 per cent on a like-for-like basis to 17.54 billion euros (S$33.78 billion) in the 12 months to Dec 31.

The company had set itself a target of 4 per cent sales growth last October, down  from a forecast of around 6 per cent in July, and 6 to 8 per cent before that.

But Mr Agon said he remained optimistic about the coming year.

“This year, we will benefit from positive effects linked to factors that had weighed on our costs last year: the drop in raw-material prices, the rebound of the dollar, and lower interest rates that will reduce our financial costs,” he said.

L’Oreal is also implementing a hiring freeze, except for new starters, and cutting
travel expenses.