L'Oréal has confirmed it has entered into exclusive negotiations with the Clarins Group as it considers buying the French luxury skin care, cosmetics and perfume company’s Mugler and Azzaro brands.
Perfume focus
"The perfume category is at the heart of our global strategy for growth at L'Oréal Luxe,” revealed Cyril Chapuy, President L'Oréal Luxe.
“In this context, we would be thrilled to welcome Mugler and Azzaro: these signatures, with a long history in fashion and olfaction, would perfectly complete our portfolio of brands,” Chapuy went on to say.
The Azzaro name was first set up in the 1960s by Loris Azzaro, while Mugler came a decade later and was founded in the 1970s. The Mugler and Azzaro brands are thought to be worth a total combined sales of €416 million. This sales figure makes up a total of 26% of the Clarin brand’s total sales, which amount to €1.6 billion.
What we know about the possible acquisition
Negotiations between the two household names comes as L'Oréal strategises to boost its presence in the premium cosmetics space.
Other brands including perfume and cosmetics house, Lancôme (which forms part of the company’s Luxury Products division), and skin, hair, and body care retailer Kiehl prove popular with target consumers opting for specific segments such as anti-ageing treatments.
However, L’Oreal has experienced problems with lifting its mass market business.
“This deal makes perfect sense in terms of L’Oreal’s plans to strengthen its portfolio of brands. The company has built up via a series of acquisitions and generates enough cash for these types of deals,” explained Roche Brune Asset Management fund manager Gregoire Laverne to Reuters.
The purchase, which is currently under discussion, is expected to be completed during 2019. The potential agreement will continue to be subject to consultation with employee representatives and the approval of the regulatory authorities, L'Oréal confirms.
What’s 2019 had in store so far?
In June 2019, L’Oréal ploughed investment into a minority stake in green chemistry company, Carbios, to pledge support for innovations that manage the lifecycle of plastic and textile polymers. L’Oréal made the injection from its corporate venture capital fund, Business Opportunities for L’Oréal Development (BOLD).
To date, in 2019, L’Oréal has centred its efforts on sustainable development, the skin’s microbiome, artificial intelligence and beauty, acne-fighting tech, and continuing to push ahead in the luxury market.
