Cosmetic revival

The CEO of personal care products company, Lornamead Group, Mike Jatania talks to Neelum Bains about reviving heritage brands, how he’s surviving the crunch and why he turned down investing in the IPL

 

Born in Uganda, raised in London, with his first job in Nigeria and now ready to expand his empire in India – few can argue that Mike Jatania is a man of the world.

The 44-year-old is the chief executive of the Lornamead Group, which sells personal care products, including Lypsyl lip care and Yardley fragrances, in 80 countries. It is this global influence that has seen Jatania top the list of richest British Asians, with a reported fortune of almost £1bn.

Jatania made his vast fortune by manufacturing and marketing household brands worldwide for the family business. But one venture he turned down was buying a team in the lucrative Indian Premier League (IPL) cricket tournament, which ended last month.

Jatania was offered the chance to buy a franchise when the Twenty20 competition launched last year and join the likes of Bollywood superstars Shahrukh Khan and Preity Zinta and business tycoons like Vijay Mallya and Mohit Burman.

Jatania, who played county cricket for Leicestershire in his youth, told Asian Enterprise he did not let his passion for the sport cloud his business judgement.

“I was offered an opportunity to invest in the IPL and I wish I had at that time,” he jokes. “The first year was very successful, but we were focusing on our core strengths, which is personal care. I wasn’t going to expand into sports, just because I am a huge fan. I wanted to keep sport as a pleasure pursuit.

“I got an organised prospectus from IPL chairman, Lalit Modi and I still think it’s an industry that has had great success, but equally it needs to prove it is a sustainable format. It looks to be a great success at the moment, especially for younger fans who find the five-day Test matches difficult to follow because there is no guarantee of a result.”

It is this strong conviction to turn down tempting offers and pick winners that has seen Jatania build a global empire since he joined Lornamead in 1984.

The group was founded in 1978 initially as a trading house to represent blue chip companies in Africa. However, since 1998 it has steadily expanded, buying over 35 brands from giants including Unilever and Procter & Gamble.

Jatania took the decision to stop acquiring brands in 2006 because of the inflated prices and he believes this key decision has helped the Surrey-based company deal with the financial turmoil.

Instead, Jatania has been adapting and evolving the company by ensuring the products remain a good value proposition for customers. “We are focused on our brands and organic growth and are likely to continue this for another 12 months.

“Commodity prices have been increasing over the last 12-months like the cost of oil. We're trying to avoid passing on the increase to consumers through taking excessive packing out, re-formulating products. We have to be lean and mean on overheads.”

One of the big challenges when buying a brand is how you develop it without upsetting its loyal customers. Jatania, who will celebrate 20 years at the helm next year, admits he learned a lot from what calls the “infamous” purchase of Harmony hairspray from Unilever in 1998.

“In the early days, we changed the product too much in terms of pricing, format, packaging and the fragrance, but consumers preferred a slower change. Things like the blue can were all important brand equities.

“After that we became very careful. Before making any changes to a brand, we had to first understand things from a consumer perspective.”

But Jatania got an even bigger lesson when he first entered the business, after finishing his accountancy degree at South Bank University in London. He was sent to Nigeria where he launched the company’s products in an incredibly turbulent market.

“Rather than work through distributors, we set up operations there indirectly. I had heard a lot of stories about the troubled marketplace. There was the fluctuating currency, counterfeit products, fuel shortages and the democratic government was overthrown. It was unstructured and the perfect breeding ground for entrepreneurs.

“I thought 'is this a great opportunity or problem?' and I discovered that if you can cope in emerging markets, you can cope anywhere. It was probably the most memorable experience for me.”

His time in Nigeria gave Jatania the confidence to accelerate the company’s growth to a global scale and today, Lornamead has offices in Dubai, Hamburg, Lagos, Moscow, Mumbai and Stamford, in the US, and employs over 400 people.

One of his main goals is pushing the famous Yardley brand, which he bought for £60m in 2005, in India and the Middle East. After a history of being passed around to different owners, Jatania is determined to be the one that drives the 250-year-old brand forward.

“The trends of growth are in the Middle East, India, and Australia. We have developed the lavender spa sub-range within the brand to appeal to younger consumers. The lavender towel, soaps and body sprays are more nostalgic and have a tremendous brand and heritage,” he adds.

“We've seen Cadburys relaunch its Wispa chocolate brand, Hovis relaunched with a major TV campaign, so there has been a revival in heritage brands. In the last 24 months we've had a TV campaign in the south of India and the results have been so positive that we will extend it to a national campaign.”

Jatania’s international outlook is not just restricted to business. He is a keen traveller and earlier this year went to Southeast Asia. “I explored Ho Chin Minh, Hanoi in Vietnam and also went to Cambodia where I saw some amazing temples.”

“I also enjoy scuba-diving. I learned in the Maldives seven years ago. It is like meditating underwater. I've seen some amazing fish and sea-life, it’s a magical feeling, so there is plenty to occupy me when I'm not working.”

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