L'Occitane's delisting from Hong Kong stocks and shift to Europe and America: is it a relief or another tough challenge?

Article | Frontline of Entrepreneurship

In early 2026, L’Occitane, the French beauty group, has been making frequent moves that attract market attention.

In January, according to Bloomberg and other media reports, the group is considering launching its first IPO in the United States as early as this year, and has begun cooperation with JPMorgan Chase and Morgan Stanley on potential listing matters. The following month, market rumors suggested the group is reorganizing its brand matrix, including considering the sale of the UK luxury skincare brand Elemis.

This beauty company, originating from a small workshop in southern France, has completed a capital cycle over 30 years—from regional brand to internationalization, then to listing on Hong Kong Stock Exchange, privatization, and planning to go public in the U.S. Now, after a year of delisting, it is simultaneously pushing forward with a U.S. IPO and brand optimization, facing the dilemma of high-end hand cream categories.

This strategic and capital-driven layout not only reflects changes in global market patterns and valuation preferences but also highlights the urgency to break through category ceilings.

Is L’Occitane’s “second bloom” a new chapter in its capital story, or just the beginning of another tough battle?

Valuation Chase Driven by Capital

L’Occitane, known for its hand cream, has always pursued higher valuations throughout its capital journey.

The story begins in Provence, France, in 1976. Founder Olivier Baussan started with distilled lavender essential oil, insisting on handmade harvesting and natural extraction, imprinting a distinct French pastoral gene on the brand. Early on, it gained footholds in boutique stores with body care products.

In the early 1990s, eager to expand, Olivier sold most of the company’s shares to an investment firm, relinquishing management control.

In 1994, Austrian businessman Reinold Geiger bought a 33% stake in L’Occitane and, through a series of capital increases, became the major shareholder and chairman, officially renaming the company “L’Occitane en Provence.” That same year, the iconic shea butter hand cream was launched, and Geiger adjusted marketing strategies to begin international expansion.

Since then, L’Occitane embarked on a long path of capitalization. In 2005, it entered China, opening its first stores in Shanghai; in 2010, it listed on the Hong Kong Stock Exchange, becoming the first French brand listed there.

Meanwhile, the group continued building its brand matrix.

In 2008, it acquired the organic skincare brand Melvita; in 2012, it incorporated the Korean skincare brand Erborian; in 2018, it acquired the American personalized beauty brand LimeLife and the Brazilian branch L’OCCITANE au Bresil; in 2019, it completed the acquisition of the high-end skincare brand Elemis; in 2021, it acquired an 83% indirect stake in the American premium personal care brand Sol de Janeiro; in 2022, it added the Australian skincare brand Grown Alchemist.

Before delisting from HKEX in 2024, L’Occitane also acquired the Italian luxury home fragrance brand Dr.Vranjes Firenze and sold the underperforming Grown Alchemist in a timely manner. As of fiscal year 2025, the group’s own brand L’OCCITANE en Provence and acquired brands totaled eight.

With continuous new brand introductions, L’Occitane’s revenue grew steadily from €335 million in fiscal 2017 to €2.8 billion in 2025. L’Occitane remains the core brand, with sales of €1.355 billion in 2025, accounting for 48.4% of the group’s total.

China’s contribution was particularly prominent.

Financial reports show that starting from fiscal 2021, China became the group’s largest market globally, and the only market with positive growth; in fiscal 2022, China’s sales reached 2.2 billion yuan, increasing its share from 17.1% to 18.1%, contributing 19.4% to overall growth.

However, a quiet shift occurred. In fiscal 2023, China’s market retreated to the second largest, with net sales share dropping to 14.0%, down 8.84% year-over-year; the U.S. overtook as the largest market with a 27.2% share.

L’Occitane’s decision to list on HKEX was driven by the potential of the Chinese market and the value of cultivating local consumer loyalty.

But when this key growth area underperformed expectations, the Hong Kong market’s valuation also suffered. According to cosmetics industry reports, in August 2023, when delisting rumors surfaced, its forward P/E ratio was only 38.22, far below Estée Lauder’s 54.92 on U.S. exchanges.

By the time of delisting in 2024, foreign media revealed that Chairman and controlling shareholder Reinold Geiger’s ultimate goal was to switch listing venues to seek higher valuation and greater capital space. The current moves to reorganize brand assets and coordinate with brokers align with this goal.

Looking back, what caused the ups and downs of L’Occitane in the crucial Chinese market?

The Dilemma of L’Occitane China: Neither Necessity nor Face

In fiscal year 2023 (April 1, 2022 – March 31, 2023), L’Occitane attributed its underperformance in China to sluggish post-pandemic consumption recovery. But the reality is more complex.

On the surface, China’s cosmetics retail sales declined for the first time in nearly a decade (down 4.5% YoY in 2022), and L’Occitane’s performance seemed to follow the broader trend. However, the real crisis lies in the fact that domestic brands, amid an industry downturn, are breaking through and rapidly capturing consumer mindshare and market share, while L’Occitane failed to keep pace with structural changes in China’s market.

While the overall market declined, a number of local hand care brands rose swiftly. They offered more competitive pricing, more agile product updates, and better aligned with consumer needs, filling the gap for cost-effective and effective products.

Meanwhile, L’Occitane appeared sluggish in this market restructuring.

First, the pandemic accelerated online shopping, and domestic beauty brands seized this trend quickly. L’Occitane’s online presence, relying on third-party service providers (Beijing Shuju Zhiliang, Hangzhou Youke), showed low direct engagement, making it difficult to accurately grasp domestic consumer preferences and hot topics.

During the most promising growth phase online, L’Occitane instead expanded its offline stores: in 2021 and 2022, the number of stores in China was 198 and 208 respectively, ranking first globally.

This heavy offline, light online strategy reflects a delayed perception of market changes. Despite China being a key market, the acquired brands are not local, and senior management, mostly appointed foreign professionals, lack sensitivity to rapid online ecosystem evolution, causing them to miss critical channel transformation opportunities.

Second, product positioning fell into an awkward zone—neither necessity nor luxury—failing to compete with the cost-effectiveness and efficacy upgrades of domestic brands.

Looking at the products, the core item—shea butter hand cream (priced at 90 yuan/30ml, registered under national cosmetics standards)—exposes two major issues:

One, the production base is not in China, limiting supply chain responsiveness; two, the efficacy is single—mainly moisturizing—using basic ingredients like shea butter, tocopherol, etc., unable to meet current consumer demands for multifunctionality.

Meanwhile, the trend in China’s hand care market has shifted.

Data from Riji Zhiyun shows that in the first half of 2025, the online market size for hand care reached 1.237 billion yuan, up 17.1% YoY, but sales volume growth (28.8%) far outpaced sales value, indicating an industry entering a price-driven inventory cycle. Consumers buy more but prefer lower-priced products.

Domestic brands have capitalized on this trend, with high cost-performance products like roopy (9.54 yuan/25g), Banmu Huadian (14.9 yuan/30g), Anye House (26.27 yuan/60g) topping repeat purchase lists on Tmall, ahead of L’Occitane.

More importantly, these brands not only offer affordability but also add anti-wrinkle, firming, and other functional ingredients, continuously raising consumer expectations. L’Occitane’s response has been slow; for example, in 2024, it launched a sunscreen hand cream—three years behind domestic brands like Ruyi.

After facing obstacles in hand cream, L’Occitane tried to expand into lifestyle markets with products like face creams, perfumes, body lotions, and attempted to adjust channel strategies, accelerate online sales, and explore lower-tier markets, but market response was lukewarm.

Photos / “Frontline of Entrepreneurship” at L’Occitane Beijing SKP store

A visit to the SKP store in Beijing revealed that its display logic centers on “gift sets”: among three counters, only one features layered displays of hand creams, perfumes, and body lotions; the others mainly showcase high-priced gift boxes (around 1,500 yuan) with shampoo, body care, and hand cream.

Sales staff clearly said the products are mainly for gifting. When asked about recommendations for personal use, they only mentioned seasonal essential oil blends, unable to convey more specific product features.

This gift-oriented, non-necessity positioning has led to rigid consumer perceptions.

Interviewee Zhao Ning (pseudonym) said, “People know L’Occitane is expensive and suitable for gifts,” but have no idea about the detailed efficacy of the hand creams; consumers tend to choose 10-50 yuan Vaseline or Mentholatum for personal use, and prefer luxury brands like Chanel or Dior for gifts—L’Occitane is neither a necessity nor a status symbol.

Will L’Occitane adjust its market strategy and regain vitality?

As the competitive environment shifts, eager to open new chapters, L’Occitane is turning its eyes to the European and American markets, attempting to restart growth in familiar territory.

In the mid-year earnings call for 2024, executives stated they will continue to develop the lower-tier Chinese market, opening new stores in third- and fourth-tier cities, with 10-15 stores under the same brand. At the same time, upon delisting from HKEX, L’Occitane emphasized that leaving the Hong Kong market does not mean abandoning China.

However, a visit to its official website shows all functions have migrated to the “Provence L’Occitane Southern France Home” mini-program; combined with recent brand matrix restructuring, it’s clear the group’s strategic and capital focus is firmly on the fastest-growing European and American markets.

This approach is not new.

As early as 1997, Reinold Geiger opened the first L’Occitane store in Japan, which within eight years became the group’s largest market, maintaining a leading position for years. In 2015, Japan’s 111 stores generated about 1.3 billion RMB in revenue. After entering China, L’Occitane also cultivated it into the group’s largest market within seven years.

Now facing setbacks in China, the group is adjusting its development strategy again—deepening its main brand’s lifestyle positioning while expanding personal care; exploring lower-tier channels in China and continuously seeking growth opportunities in the Americas.

But can L’Occitane, shifting markets and seeking a new boost, truly blossom again? From the perspectives of market perception and operational models, the outlook may not be optimistic.

First, there is a significant perceptual gap in the core hand cream category between China and Europe/America.

In China, high-end hand creams are associated with the early luxury, scarcity positioning akin to Hermès. But under the impact of interest e-commerce, L’Occitane’s reliance on shelf logic shows signs of fatigue.

In Europe and America, consumers value efficacy verification, offline experience, and specific use scenarios more. Despite the advantage of a global offline network, the group must contend with fierce local efficacy brands.

Whether growth in Europe and America can quickly offset China’s decline will be the first challenge in its market transition.

Chart / Xin Jing Bao report

L’Occitane’s 2025 financial report shows a net sales of €2.8 billion, with the core brand L’OCCITANE en Provence still being the main revenue source, accounting for about 48.4%. The brand reported strong sales performance in the U.S.

However, growth in other markets does not seem to offset the decline in China. Based on available data, the net sales of L’OCCITANE en Provence in 2025 was €1.355 billion, slightly down from €1.389 billion in 2024, indicating a shrinking scale.

Second, the group’s confidence in transitioning to the U.S. stock market partly stems from the rise of the personal care brand Sol de Janeiro. It demonstrates the group’s ability to incubate brands that appeal to Generation Z’s sensory and emotional needs, entering high-growth categories like solid perfumes with body lotions and jelly fragrances.

According to Xin Jing Bao, in fiscal 2025, the acquired personal care brand Sol de Janeiro became the second-largest brand, generating €885 million, up €199 million from 2024, accounting for 31.6% of the group’s sales, and leading in Sephora and Amazon in North America.

Meanwhile, the group’s revenue in the Americas reached €1.299 billion, up €209 million from €1.009 billion in 2024. Almost all of this growth was driven by Sol de Janeiro’s excellent performance in the U.S.

After initial accumulation, Sol de Janeiro faces a highly saturated market. In the U.S., the top three cosmetics companies (L’Oréal, P&G, Unilever) hold over 20% market share each, with the top ten brands accounting for over 40%. The road from 1 to 10 brands still faces many challenges.

Currently, L’Occitane owns eight brands, including its own and acquired ones. Among these, only Sol de Janeiro and LimeLife are U.S.-based brands; the other six are spread across different countries and regions. Sol de Janeiro has become the group’s second-largest brand, but LimeLife and others still have limited influence in the U.S. market.

Whether other brands can leverage Sol de Janeiro’s success to gain ground in the U.S. remains to be seen.

If L’Occitane wants to truly flourish in new markets, it must simultaneously reshape perceptions, refine brand operations, and optimize its brand matrix—these are precisely the core issues that caused its setbacks in China. Without overcoming these challenges, L’Occitane may fall into a cycle of superficial change without real breakthrough.