Wella Group

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Wella Group

Berliner Allee 65
6100 Darmstadt
Federal Republic of Germany
(06151) 340
Fax: (06151) 342748

Public Company
1880 as Franz StröherRothenkirchen
Employees: 14,000
Sales: DM2.41 billion (US$1.43 billion)
Stock Exchanges: Frankfurt Zürich Basel Berlin Vienna Geneva

Wella is Germanys largestand the worlds second-largestproducer of hairdressing products for home and professional use. Wella AG operates in Darmstadt as the head company of the worldwide Wella Group. In the latter half of the 1980s, Wella took a significant step forward into the international hygiene-products market. This period was marked by a number of acquisitions and diversifications into new fields, by expansion into new markets, and by heavy investment in new production technology. Subsidiary companies of international importance include the French companies Parfums Rochas and René Garraud.

From its earliest days, Wella has preserved its character as an independent family business. Although, since 1983, a third of the companys shares have been traded as preference shares with no voting rights, the majority of shares belong to the third and fourth generations of the founding Ströher family and its branches. Since 1973, managing directors from outside the family have run the business, although there are family representatives on the supervising and advisory boards, in accordance with a family contract. Wellas fortunes have been linked strongly to the German economy for many years, as a long-standing supplier to the hairdressing in dustry as well as to the consumer. Wellas logo is one of the most familiar in Germany.

In examining the companys history, a strong sense of tradition emerges. This is particularly evident in its clearly defined production and sales strategies, cooperation with the hairdressing industry, and the image of the company as a family business. This strong sense of continuity has cushioned Wella in times of crisis.

In 1880, at the age of 26, the hairdresser Franz Ströher, the grand- and great-grandfather of todays generations of owners, founded a company for the production and distribution of artificial hair in the Saxon Vogtland. His company was registered on July 1 at the Auerbach district court. The region in which he chose to operate was a traditional stronghold of the textile industry, with a well-established local manufacturing base. Here, the people were skilled, diligent, and pooran ideal workforce for the labor-intensive production of hairpieces and wigs, which were made out of natural and artificial hair. During his years spent traveling as an apprentice hairdresser in Germany, Holland, Switzerland, and, above all, France, Ströher learned about new hair fashions and acquired the necessary hairdressing techniques. In 1872 undulation waving was invented by the Frenchman François Marcel. This became a popular method for waving womens hair, and was supplemented with the addition of natural or artificial hairpieces. In 1880 Ströher set up his own private firm, Franz StröherRothenkirchen, for the manufacture and distribution of artificial hair. After initial difficulties with the development of new production methods he eventually found a material in England that could, with the aid of a waterproof finish that he had developed himself, be used to make wigs. This product, Tullemoid waterproof, became a considerable success at the turn of the century, and in 1904 a larger manufacturing plant was built in Rothenkirchen. This plant still exists, although it has been modified extensively.

In 1908 Ströhers two older sons, Karl Ströher, a merchant, and Georg Ströher, a hairdresser, joined the business. They were to shape the companys history over the following 60 years. As early as 1931 sales extended to the United States, and in Rothenkirchen a staff of 30 was employed in addition to family members. They manufactured many kinds of wigs and hairpieces. The permanent wave had not yet become widely popular. Promising experiments were carried out in the United Kingdom and their results impressed the Continent, but World War I broke out before the hot-wave technique for women could be offered at a reasonable price. The war had a significant impact in more than one respect upon the history of the family business. Franz Ströhers three younger sons were killed, and Franz Ströher himself, almost broken by the events, left the management increasingly to his sons Karl and Georg, and took the less active role of senior partner until he died in 1936. To compound the problems, international hair fashions suddenly changed; the popularity of bobbed hair caused a rapid decline in the demand for hairpieces. This change led to a difficult period of readjustment for the company. There was a brief episode of production of wigs for dolls, clothing for workers, mannequins for hairdressers, and sales of hairbrushes, washing brushes, toothbrushes, face towels, and shaving towels. The war also cut contacts abroad that were difficult to reestablish under new circumstances.

However, one new development after the mid-1920s led to a phase of relative prosperity for Franz Ströher OHG, as the company had been called since 1918. The permanent waving process was at last proving successful and gave a much wider scope to the hairdressing trade. François Marcels waving technique was developed further in Germany by Karl Nessler and Josef Mayer. At this point the Ströher brothers took the opportunity to acquire a license for the manufacture of a new generation of permanent wave machines that used 16 to 24 volts and were easy to operate.

In the meantime the brand name Wella had been registered at the German patent office as a hairdressing trademark. Since 1927 the production and distribution of perm machines, hair driers, hairdressers equipment, and salon furniture have been carried out under this name. Soon cosmetic hair products appeared as part of the production program alongside professional hairdressing equipment. These took into account the demands of hairdressers. A well-known product at this time was the hair treatment Kolestral, based on recent biological discoveries.

The year 1930 was the 50th anniversary of the company, and marked the beginning of a new phase of expansion. The business adopted the legal status of a public limited company, Franz Ströher AG, with an original capital of 250,000 marks, and employed 150 staff members. From this time the licensed Wella emblem, with a womans head and stylized waves of hair, became an international symbol. The Wella News, a new trade magazine, was published by the company. This journal had a widespread distribution and, combined with the regular training courses offered to hairdressers, helped to establish a strong connection between the company and the hairdressing trade. The factory at Rothenkirchen was by this time manufacturing hair driers, hydraulic chairs, and electric hair-cutting equipment. The program also incorporated the production of furnishings for hairdressing salons and cosmetic products. These were partly produced by the company itself, and partly supplied by others.

In the years before 1938 the company established many subsidiaries, and a manufacturing plant was set up in Plauen, Vogtland. International branches and subsidiary companies all over the world promoted the growth of the family business. It no longer was restricted by the unfavorable location of the Saxon Vogtland. In the course of an allocation policy pursued in the Thüringen region, the head offices of the corporation, together with the manufacturing and export divisions, were transferred to the town of Apolda, although the production of hair cosmetics continued at the parent plant at Rothenkirchen. When the factory at Apolda was dismantled at the end of World War II, in 1945, the firm had well over 800 employees.

This period of expansion also brought about important welfare innovations within the company, such as subsidies for children of employees and allowances for marriage, childbirth, death, and accidents. Provision for the retirement of former staff and their dependents was secured by regular benefit payments, and advanced training within the establishment was extended. Typical of the family business was the strong, almost patriarchal relationship between management and staff. Documents from the Wella archive in Darmstadt demonstrate that employees at the end of the 1930s were on average fairly young. Many surnames occur several times, which points to the recruitment of employees relatives, and a major proportion of staff moved with the management from Sachsen to Thüringen.

As early as the 1930s, Wella laboratories were developing and constantly improving numerous hair cosmetic products, which became best sellers, such as the bleaching compound Blondor, a non-alkaline washing agent concentrate called Wellapon, and the liquid foaming hair tint Wellaton, which came in an wide range of colors. Whereas bleaching and tinting agents were relatively well developed, it took longer to find an effective dyeing compound. Wella Percol Liquid was the best known product. Koleston, a gentle, conditioning cream dye available in a tube, had been developed but could not be produced during wartime, when the raw materials it required were unobtainable.

The economic policy of the National Socialists and wartime conditions were not favorable to Wella. The Ströher brothers were active Freemasons and were opposed to National Socialism. In the course of time, important products could no longer be manufactured due to restrictions on raw-material supplies. The factory in Apolda built new ventilation systems and equipment for submarines, and could no longer make permanent wave machines and hair driers. At the end of World War II the Ströhers had to face the dismantling of the plant in Apolda and expropriation by the government of the plant in Rothenkirchen, still intact with more than 300 working staff, as communal state property.

The Ströhers, supported by a few tireless colleagues, began to look for a new sphere of influence and orientation. In September 1945, at the Hotel Krone, the reconstruction of the business began on a very small scale in Huenfeld, Os-thessen, under the new name of Ondal GmbH. The brothers stayed for the time being in Rothenkirchen. It was only in 1946 that the production of cosmetic products resumed there, followed by the production of hairdressing equipment in May of that year. At the same time, Wella Hairdressing Requirements GmbH was founded in Berlin. After the expropriation of Rothenkirchen, a large-scale manufacturing plant was set up in Huenfeld, which has since been extended several times and represents the center of the companys production. After the division of Germany, Wellas former plant in Rothenkirchen continued to operate. As VEB Londa it became part of a larger chemical concern, which had very limited development potential due to the strict principles of Eastern economic planning. Nevertheless, it came to hold a significant position in the market before the reunification of Germany and had established a considerable number of outlets for the export of goods, mainly to Eastern Europe. However, the profile of the enterprise and the quality of its products were not compatible with Western standards. In February 1990, political changes in East Germany brought about the reintegration of the Rothenkirchen plant into Wella in the form of a joint venture which was to produce and market hairdressing products and equipment in Germany and other European markets. Without the strong bond resulting from their shared origins in the family business the reintegration of the factory at Rothenkirchen with Wella would not have been possible.

From 1950 the business was registered as Wella AG. The central management of the company operated from Darmstadt, Hessen, where the head offices were based. The reintroduction of the successful Wella logo proved highly advantageous. Wella, having had a modest turnover of DM10 million in 1950, then attempted to retrieve international rights for trademarks which had been expropriated, and business connections which had been lost after 1945.

Wella owes its international reputation to its early and aggressive penetration of international markets. As early as the 1950s Wella had included Third World countries in its trading policies, and had met with strong opposition. Production started in 1952 in Chile, Italy, and the Netherlands, in 1953 in Africa, and in 1954 in Australia and Brazil. In the 1960s the Asian and Pacific territories were entered in stages. An international distribution network was set up and larger manufacturing plants all over the world helped protect the firm from world trade friction, and set the prototype for Germanys international business relations after World War II.

In 1950 Koleston, the first hair-conditioning cream tint, was introduced and initiated a new generation of hair products that conquered the markets. Koleston still is produced. Its high research-and-development costs are reflected in a high price for both hairdressers and consumers. Wella has a large range of successful products including such well-known brands as Wella Balsam, Shock Waves, Bellady, and System Professional. For some time now, a change in consumer attitudes and a stronger awareness of the environment have caused increasing recourse to natural ingredients, the abolition or reduction of propellant gas in sprays, and the increasing use of biodegradable packaging made of raw materials that break down naturally. In most cases it is costly to develop new environmentally friendly products, as well as to market them effectively, since there is often a discrepancy between ecological requirements and consumer demand.

The Wella Group still sees itself as an independent family business, in which the founders influence can still be felt. Since the beginning of the 1950s, members of the third generation were additionally brought into the management of the company. However, Wellas considerable growth and diversification have resulted in its transcendence beyond the role of a middle-class family business. In 1973 the day-to-day running of the group was entrusted to directors, who were not members of the founding family. The family members concentrate their capacities on supervising and advisory activities. It was due to these changes that in 1978 Wellas worldwide sales passed DM1 billion for the first time, and have continued to rise ever since. In 1983 Wella turned to the stock market in a move to adjust its capital structure to cope with its rapid growth.

Principal Subsidiaries

Kadabell GmbH & Co. KG (99.8%); Emil Kiessling & Cie. GmbH & Co.; Dr. rer. nat. Peter Theiss Naturwaren OHG (75%); Wilhelm Oberle Verwal-tungsgesellschaft mbH; Tondeo-Werk GmbH; Wella Fri-seurbedarf GmbH; Intercosmetic S.A. (Belgium); Ondal-France E.u.r.l. (France); Ets. Pelleray E.u.r.l. (France); Rene Garraud S.A. (France); Parfums Rochas S.A. (France); Ondawel (G.B.) Ltd. (U.K.); Intercosmetic (G.B.) Ltd. (U.K.); Soc. Labocos s.a.s. di Rolf Kissing & C. (Italy, 80%); N.V. Handelsmaatschappij van Ravensberg (Netherlands); Wella International Finance B.V. (Netherlands); Interkosmetik Ges.m.b.H. (Austria, 95%); Intercosmetic AB (Sweden); Wella Beteiligungen AG (Switzerland); Productos Cosméticos S.A. (Spain); Cosmetic Products Pty. Ltd. (Australia); Cosmetic Suppliers Pty. Ltd. (Australia); Belcosa Distribuidora de Cosméticos Ltda. (Brazil); Tianjin Liming Cosmetics Joint Industrial Co. Ltd. (China, 51%); Fine Care Co. Ltd. (Japan, 63.3%); Productora de Cosméticos S.A. (Mexico, 99.8%); Sonata Laboratories Ltd. (New Zealand); Chemo-Technische Manufacturing Inc. (Philippines, 62.2%); Myungmy Cosmetics Co. Ltd. (South Korea, 50%); The Wella Corporation (U.S.A., 99.8%).

Wieland Sachse

Translated from the German by Karin Potisk