L’Oréal Burns Beauty Village

Less than two months after it trumpeted the creation of Beauty Village, a stand-alone unit to handle L’Oréal and its Maybelline brand, as an “innovative, collaborative model,” McCann Worldgroup is scrapping the project.

The decision to kill Beauty Village came as the result of a demand from an unidentified senior L’Oréal executive—who may be a C-suite executive, according to insider speculation—who found out about it well after its launch and who did not want the two accounts handled out of the same agency, sources say. A McCann Worldgroup representative confirmed the shuttering; a spokeswoman for L’Oréal Paris said the company would not comment.

McCann Worldgroup’s failure to clear the initiative with top L’Oréal management is an embarrassment on an account where there are already client issues, multiple sources say. And it could end up backfiring badly on Worldgroup CEO Nick Brien; he was involved in setting up the unit, which was to report to him.

Its collapse is seen by some as a reflection of the degree to which his client-handling skills are being tested. “It’s been a pretty spectacular mistake,” one Brien critic says. “How in God’s name did this get so far, with so much investment before it got in front of a more senior [executive] who was not comfortable with the two accounts under one agency?”

L’Oréal has been a key McCann Erickson global creative account, and the agency also adapts and distributes Maybelline creative outside the U.S. for sister agency Gotham. L’Oréal and Maybelline generate about $100 million in revenue for the two Interpublic agencies, with some 80 percent of that going to McCann.  

A year in the making, Beauty Village had been hiring staff, developing a logo, and making plans for agency space. McCann Worldgroup would not say how many employees had been committed to the new effort, but one source familiar with the situation says, “There was a massive amount of man-hours and loss of opportunities.” And, according to multiple sources, Beauty Village was set up with a separate profit-and-loss line, which would have taken revenue out of McCann and Gotham and moved it into Beauty Village. A McCann Worldgroup representative would say only, “McCann Worldgroup does not discuss nor disclose the details of any individual investment.”

Brand Village was developed in response to a request from Cyril Chapuy, who was named global brand president of L’Oréal Paris last year after serving as the global brand president of Maybelline New York. At Maybelline, he worked closely with the brand’s account lead at Gotham, Sheri Baron, and its global creative director, Jane Mauksch. The two had moved over to run Beauty Village with Aude Gandon, worldwide account director on L’Oréal at McCann in Paris.

The unit’s dismantling and Baron’s return to Gotham with Maybelline has triggered a power struggle at the top of Gotham, sources say. In July, after CEO Peter McGuinness quit to take the same role at DDB Chicago, Gotham named chief marketing officer Nick Johnson and managing director Lyle Tick as co-presidents. Now Baron is said to be demanding the CEO job at Gotham.