We’ve seen the first signs of financial crisis in October

The first two quarters of 2008 were ‘spectacular’ for Oriflame Romania, while the last quarter was ‘disastrous’, said Monica Tatoiu (photo) in an interview to Wall-Street.

“Our company is tightly connected to the economic environment, and the Romanian economy started to crack in October. We got hit by the ‘tsunami’ in December, when we had a 15% decline in sales which compensated a very good first quarter. However, we’ve talked to some of our colleagues in pharmaceutical, food or clothing industry, and the sales were 10-15% lower than in the year-ago period”, said Monica Tatoiu.

Although she was on the brink of stepping down as managing director after 15 years, Tatoiu decided to remain at the helm of Oriflame Romania until end-2010 due to the financial crisis.

“I was thinking about leaving at the end of 2008. When you build a company from zero, it is unfair and immoral to abandon it in stormy times. A genuine leader leaves something clean and flawless behind, not something defective or damaged. Therefore, I’ve decided to stay until the end of 2010 as managing director, and as of 2011 I will remain in the board of directors”, said Monica Tatoiu.

There are two candidates, she added, running for managing director position, two women who work in the company.

“I disagree with the idea of an outsider running the company. An insider however, has a formed insight and he doesn’t need any further training sessions. The future managing director has to be a clone of Monica Tatoiu. The core values of the company mustn’t change or break”, Tatoiu confesses.

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If in 2008 the local cosmetics industry rose 15% this year, the growth pace will be more moderate, due to the economic crisis, says the managing director of Oriflame Romania.

“There are figures in the market which I strongly disagree with. I think that many of the field forces report exports too. I don’t think the Romanian cosmetics market is 800 million euros, but around 600 million euro. Expressed in lei, it grew 15% in 2008, whereas in euro, the growth was merely 10%”, Tatoiu added.

The evolution of the cosmetic industry, she said, will heavily depend upon “how prompt will be the Government in enforcing those measures it’s talking about for the last month”.

As result of the crisis, Romanian clients are now shifting their focus to products at lower prices, with reduced but constant consumption rate.

“People continue to buy; the Romanian client will never give up satisfying his needs, like Germans or Swedish. He consumes less, but constantly. Romanians were always focused on discounts and prices. They still prefer “quantity” over “quality”.

Nevertheless, she proposes a solution to enhance efficiency: a new team, wide market visibility and not a drastic rise in prices, measures that Tatoiu will remain faithful to at least until June.