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PARIS — LVMH Moët Hennessy Louis Vuitton has won a court injunction against the Vivastreet classified ad Web site, which had allowed its users to sell the luxury goods company’s fragrance brands in France.
In what LVMH lawyers heralded as an unprecedented move, Paris’ commercial court, the Tribunal de Commerce, ordered Vivastreet in November to block ads for all LVMH-owned scent brands, including Guerlain, Kenzo and Christian Dior; the court also agreed to impose a fine of 500 euros, or $730 at current exchange, for each LVMH fragrance sold through vivastreet.fr in the future.
“What is really new here is that the injunction doesn’t rely on the alleged liability of the Web site and doesn’t try to compensate for the past situation, but gives a solution for the future by ordering the Web site to block a priori,” explained LVMH’s lawyer Nicolas Brault, who is a partner of Watrin Brault Associates. He said until this injunction, LVMH would have had to check the site daily and order its ads to be removed on a case-by-case basis.
The court ruled that selling LVMH’s fragrances outside of its chosen selective-distribution channel is illegal in France, where prestige beauty manufacturers have tight control over the environment in which their products are sold. Brands here have the right to pull their products if certain criteria, including a high level of service, are not met.
Since the injunction, a warning appears on vivastreet.fr for anyone who tries to place an ad for an LVMH scent. And when buyers search for such a product — like Dior Midnight Poison — a notice informs them it is unavailable.
In the meantime, Brault said LVMH has sent a copy of the injunction to a dozen similar sites. He believes most people purchasing prestige fragrances from unlicensed sites are unaware they are acting illegally and so will stop once warned.
“For the rest, if they go elsewhere, we will follow,” he said.
A Vivastreet spokeswoman said the company has not yet decided if it will appeal the ruling.
— Ellen Groves
Regis Buys PureBeauty and BeautyFirst
NEW YORK — Regis Corp. has one less competitor.
This story first appeared in the January 22, 2008 issue of WWD. Subscribe Today.
The beauty salon giant has agreed to acquire PureBeauty and BeautyFirst, which, like Regis, are beauty supply stores outfitted with salons. Terms of the transaction were not disclosed.
The deal, expected to close next month, is intended to accelerate Regis’ previously announced initiative to transform its 630-unit professional hair care-focused Trade Secret chain into beauty boutiques with a broader offering, including makeup and skin care. Such a move would put Regis’ $253 million Trade Secret division into direct competition with specialty retailers, including Ulta, Sephora and Bath & Body Works.
In a statement released Friday, Regis chairman and chief executive officer Paul Finkelstein said, “We will re-brand most of our Trade Secret locations to PureBeauty and most of our Beauty Express locations to BeautyFirst. We will be combining the best of all our brands, bringing together PureBeauty’s and BeautyFirst’s strength in skin, cosmetics and bath with Trade Secret’s existing professional hair care platform and exceptional real estate.”
Steve Hudson, president and ceo of PureBeauty and BeautyFirst, will become chairman of the newly acquired division and oversee the transformation plan. Hudson is the founder of Cameron Capital Corp., which bought PureBeauty Inc. for roughly $10 million 18 months ago. Regis holds a 19.9 percent stake in PureBeauty and BeautyFirst, which consists of 63 company-owned locations and 51 franchise units in 20 states. Together, PureBeauty and BeautyFirst’s annual revenues are $65 million, and including sales of franchises are $110 million.
Regis Corp. plans to discuss the acquisition further during its quarterly conference call, scheduled for today.
— Molly Prior
A.S. Watson Names Marionnaud CEO
PARIS — A.S. Watson Group has appointed William Koeberle chief executive officer of Marionnaud Group, effective Jan. 18. In the newly created position, Koeberle, who previously oversaw five countries as managing director of Marionnaud International, is responsible for the perfumery chain’s overall European business. He reports to Dominic Lai, A.S. Watson Group’s managing director.