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Friday, February 26, 2016

Another niche perfume brand bought up by a giant corporation

We have been reporting this snatching up of smaller niche fragrance brands for some time now because it shows just how powerful capitalism is and just how businesses need cash to flourish and expand. Or perhaps how the dream of founding a brand is to eventually sell it to a bigger stake? In any case, the latest news revolves around an interesting (and seemingly contradictory?) acquisition.

According to Fragrantica who reports based on the Business Wire reportage:

"Estee Lauder started to build a strong portfolio of prestige perfume brands with the aquisition of Tom Ford. Recently, Le Labo and Editions de Parfums Frédéric Malle have also come under EL control. Now, Kilian Hennessy -  the grandson of the founder of The LVMH Group - sold his brand to EL, although everyone was always hinting at the big support of LVMH behind By Kilian."



It's also reported on The Street Insider. (section Acquisitions/Mergers)

The Lauder Group portfolio currently includes: Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, Tommy Hilfiger, M·A·C, Kiton, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin, Tom Ford, Smashbox, Ermenegildo Zegna, AERIN, Marni, Tory Burch, RODIN olio lusso, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, By Kilian.

My grumbling had began in 2013 when I lamented the "loss" to Big Market of L'Artisan Parfumeur and later Diptyque and Penhaligon's. And it was back then that I featured a true indie's views on how the market works and what lies in the future aheadWhen Frederic Malle was bought by Lauder in 2015 the furore spread on online communities like wildfire. And Le Labo's acquisition too.

It's safe to assume that if your favorite fragrance niche brand is expanding, issuing more and more perfumes and accessory products (candles, linen sprays, hair scents etc.) it's bound to get sold very very soon! However if The Aesthetic Principle® should apply, fear not; you shouldn't feel guilty of fanning the fires of capitalism.

But let's revert to the case at hand. An originally LVMH company bought up by the Lauder Group. A company headed by someone related to LVMH bought up by the Lauder group. We live in interesting times!

18 comments:

  1. The question we should ask ourselves is why do Estee Lauder collect niche perfume lines.

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    Replies
    1. I replied to Lady Jicky down below. Good question!

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  2. So let's see...if we're in America and don't like the above situation, should we vote for Sanders, and if we do like it, Trump? I'm so confused !!!!! (not really)

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  3. Mimi G16:49

    I hope Maison Francis Kurkdjian is not the next one to go !

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    1. Since he vehemently denies it, it can be safely assumed it will happen at some point soon.

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    2. Mimi G17:05

      After 8 years of being a perfume nut .. I concur !! Money talks and as much as I respect Francis K a lot... he has always said perfume was not his first love .
      The perfume industry echos the dairy industry in the US . One or two big names own nearly everything.

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    3. Mimi G17:05

      After 8 years of being a perfume nut .. I concur !! Money talks and as much as I respect Francis K a lot... he has always said perfume was not his first love .
      The perfume industry echos the dairy industry in the US . One or two big names own nearly everything.

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    4. Hmmm....judging by the seemingly disdainful way he treats his online fans, I would suppose that the move is surer than ever. True amateurs (in the etymological sense, those who LOVE their craft) never alienate their fan base; they appreciate it and cajole it. Just look at Tauer.

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  4. I'm not current with the various corporate brand purchases, but it does seem that LVMH is not much interested in the high end niche market (or at least, it's content to use Guerlain and Dior special editions for that), while Estee Lauder clearly sees this as a segment worth expanding into. Perhaps EL found it difficult to wrestle more perfumery space in regular dept stores and Sephora like stores. (It already occupies a lot of expensive cosmetic space at Macy's, with EL, Clinique, MAC, and Bobby Brown, but none of these have much space for perfumes. And Sephora is of course owned by LVMH). Instead, it decided to occupy the wealthy suburban kingdoms of Saks and Neiman Marcus. By Kilian was well represented there. In constrast, Malle and Le Labo have yet to appear there, and for now remain in the smaller (if more high end) realm of Barney's.

    And yes, Kurkdjian has recently gotten a lot of space at NM - so one wonders whether it does indeed have a backer, or is the next purchase.

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    1. As always a much more insightful reading of the market and the retail circuit than I could ever hope for. Thanks M, it's as you say. And I'm sure MFK is going to a high bidder soon.

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  5. Well, I shan't twell you what I wear for fear it too my soon be on it's way out!

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    1. This is also risky practice; things that do not get bought by lots of people get discontinued... :-(

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  6. And I have no comment! You all know way more about all this than I do! The perfume I just bought for myself is in actuality owned and manufactured by L'Oreal. I wouldn't have bought it if I had realized in advance, so this is a timely post for me to read. Thanks!
    Jean :)

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  7. Lauder buy their competition ...... very clever but very sad :(

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    1. But was it really their competition? I wonder. Because By Kilian was positioned as much more $$$. I doubt that a By Kilian buyer was buying Lauder mainstream. (and not for lack of quality).
      I think they're exploiting the segmentation of the market; aiming higher at richer wallets. Corner all corners.

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    2. Yes you do have a point Helg ......I guess they see some company that is sort of "popular" and they just buy it! They sure do have the money hanging around! LOL

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    3. Money needs to be invested, not stay idle, and what better investment than a company that is both close to what they already do (but in a different spin) and which shows great potential of growth (many plutocrats wanting to lay down good money)?

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