Ongoing exclusive acquisition negotiations
L’Oréal entered exclusive negotiations with Clarins Group in July this year, stating perfume was “at the heart” of its global growth strategy.
At the time, Clarins said a sale to L’Oréal would fulfil the group’s ambition to ensure its beauty business reached full potential. “The fragrances industry has changed dramatically in recent years to become one of the most competitive and demanding markets in terms of marketing and investment and critical mass. This project would enable the Mugler and Azzaro brands to continue to grow amid these new conditions.”
L'Oréal and Clarins Group signed the acquisition agreement yesterday, finalisation of which remains subject to standard regulatory approvals.
‘Iconic fragrance brands’
The full acquisition agreement includes Mugler, Thierry Mugler (Fashion), Clarins Fragrance Group, Clarins Fragrance Group France, Cosmeurop and Clarins Fragrance Group UK – business activities that totted up €340 million sales in 2018. The L’Oréal Group generated sales of €26.9 billion euros in 2018.
“The Clarins Group owns successful, international iconic fragrance brands and benefits from a recognised and valued know-how in the industry. Angel has revolutionised the market, Alien has built solid positions, Azzaro Pour Homme and Chrome are classics, and Wanted and Wanted Girls appeal to millennials,” L’Oréal said in a statement.
Mugler recently unveiled a line of refillable, perfumed cosmetic brushes for its Angel, Alien and Aura brands that could also be used for skin care and make-up application. A year prior, the Mugler brand also launched perfume pencils.
L’Oréal continued: “By joining L’Oréal, Mugler and Azzaro brands will pursue their international development while benefitting from the resources of the world’s beauty leader in marketing, distribution and innovation.”
Fragrance to bolster ‘flattish’ Western Europe
Back in August, chairman and CEO of L’Oréal Jean-Paul Agon told investors in the company’s second-quarter earnings call that Western Europe continued to be “flattish”. Asked by an analyst what might bolster business in the region, Agon said the company had several growth initiatives, specifically in fragrances.
He said L’Oréal had a Lancôme Idôle perfume launch planned, which happened mid-August; a fragrance launch under Yves Saint Laurent, which happened early-September; and a Valentino Born in Roma duo fragrance launch, which happened at a similar time with late-year airport rollouts planned.
“You know that of all zones, the one that is most important in terms of fragrance is Western Europe. So, we really believe that for the luxury division, for example, the launch of these three fragrance initiatives will definitely be very important,” Agon said.
