How fashion and beauty executives are preparing for tariffs

Looking ahead, our outlook remains based on our best assessment of the current geopolitical backdrop, as well as the macroeconomic environment. This includes inflationary pressures, tariffs and other consumer spending-related headwinds, supply chain disruptions and foreign currency volatility, among other considerations.

Nicolas Hieronimus, CEO of L’Oréal

The consumption of particularly premium goods in the US will be dynamic. Of course, there are many unknowns on the situation of the US market, the tariff strategies may evolve and then whether it will have an impact on local inflation is hard to predict. But today, we see the US as a land of opportunity.

Sue Nabi, CEO of Coty

As is evident in the last few weeks, the global geopolitical and tariff situation remains quite fluid, further adding to the broader uncertainty. Having said that, our teams have been planning for several different scenarios with action plans to minimise the potential impact on Coty. For context, our sourcing from China, Canada and Mexico into the US is fairly minimal. As we contemplate a potential 10 per cent tariff on finished goods shipped from Europe into the US, or potential retaliatory tariffs in North America, this could represent a few points of impact to our annualised EBITDA. In the meantime, we are already making adjustments in our product flows and sourcing, including having some extra inventory on hand in the US and shifting more of our mass fragrance production to our North Carolina plant. And of course, pricing remains an additional lever, particularly in the relatively price-inelastic prestige beauty market.

Jennifer Wong, CEO of Aritzia

The news is changing all the time. That said, we have been systematically diversifying our manufacturing for years, since our IPO. The great majority of our product is manufactured outside of China. What is most important to us, even with all of this discussion around tariffs, is that we will focus on ensuring and protecting the quality of our product. This means we have long-standing partnerships with manufacturers and partners and can count on them to produce the quality we’re after — so we’re not making any knee-jerk changes. That said, if there was a 10 per cent [tax] on goods from China, that would be less than approximately a 30-basis-point impact on us, and that is before further mitigating action. Given that we have a diversified sourcing strategy, I think we have good things in place that allow us to hedge against disruptions, whether it be a tariff or even natural disaster risk.

Fernando Fernandez, CFO of Unilever

We’ve seen some return of inflation to our basket of commodities. It is not a general increase, it is really concentrated in a few families of materials. It is very difficult with the start-stop [nature] of tariffs and the significant moderating currencies to predict the material inflation. [Inflation] will drive some acceleration of pricing, hence our guidance of further balance between volume and pricing, and we expect pricing to materialise from Q2 onwards.

With additional reporting by Madeleine Schulz.

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