The agreement, initially signed in October, last year, following several months of exclusive negotiations, sees L’Oréal take on Mugler, Thierry Mugler (Fashion), Clarins Fragrance Group, Clarins Fragrance Group France, Cosmeurop and Clarins Fragrance Group UK – business activities that totted up €330 million in sales in 2018.
Successful, international and iconic fragrance brands
At the time of signing the agreement in October, L’Oréal described the fragrance brands within Clarins Group as “successful”, “international” and “iconic”.
Clarins said the 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.”
During negotiations, Cyril Chapuy, president of L’Oréal Luxe said: “The perfume category is at the heart of our global strategy for growth at L’Oréal Luxe”.
Speaking yesterday on completion of the deal, Chapuy added: “We look forward to welcoming the Mugler and Azzaro teams to the L’Oréal family, and to accompany them, especially in this difficult time.”
The perfume push from L’Oréal
Last year, L’Oréal invested heavily in fragrances, with a flurry of important perfume launches: Lancôme Idôle in August; Yves Saint Laurent Libre in September; and Valentino Born in Roma in September.
Jean-Paul Agon, chairman and CEO of L’Oréal, said these initiatives were important in bolstering a relatively flat sales environment in Western Europe. Speaking to investors in the company’s first-half (H1) 2019 earnings call last year, Agon said: “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.”
Coronavirus impacting business – 2020 guidance suspended
Like many beauty firms worldwide, L’Oréal has acknowledged the impact the ongoing coronavirus (COVID-19) pandemic will have on business.
Just this week, it pushed back its Annual General Meeting and suspended 2020 guidance due to “lack of visibility” on when the coronavirus would come to an end. The company said these decisions had been made in “exceptional circumstances linked to the COVID-19 epidemic”.
