PPR, L’Oreal Complete YSL Deal

PPR and L'Oreal said Wednesday that they have finalized the YSL Beaute licensing agreements and the sale of the company under the terms announced on Jan. 23.

PARIS — PPR and L’Oréal said Wednesday that they have finalized the YSL Beauté licensing agreements and the sale of the company under the terms announced on Jan. 23. The companies said they plan for an effective transfer at the end of June, following authorization from competition authorities.

As reported, L’Oréal had proposed to pay PPR 1.15 billion euros, or $1.8 billion at current exchange, for YSL Beauté Holding, including its Roger & Gallet subsidiary. YSL Beauté is part of the PPR subsidiary Gucci Group.

Now that the deal is done, L’Oréal obtains an exclusive and very long-term worldwide license for the use of the YSL and Boucheron brands in the fragrance and cosmetics categories, under market conditions. Also under terms of the agreement, L’Oréal will take over YSL Beauté’s licenses for the Stella McCartney, Oscar de la Renta and Ermenegildo Zegna brands in the fragrance and cosmetics categories.

PPR continues to own the Yves Saint Laurent, Boucheron and Stella McCartney brands.

YSL Beauté’s brands will join L’Oréal’s luxury division, which already includes Lancôme, Biotherm, Helena Rubinstein, Shu Uemura, Kiehl’s and Parfums Giorgio Armani, among others.

— Jennifer Weil

Gurwitch Said Near RéVive Buy

NEW YORK — Gurwitch Products is said to be close to acquiring upscale skin care brand RéVive, according to reports circulating in the market. Houston-based Gurwitch, which is owned by Alticor Inc., markets the Laura Mercier color cosmetics assortment and the acquisition of a specialty/department store skin care brand could be seen as a move to complement a color cosmetics brand already present in the same channels of distribution. RéVive, which was founded in 1997, markets skin care products that have an average price point of between $350 and $400 per product and is thought to generate annual wholesale sales of about $25 million. An industry source speculated that the selling price could be less than twice total sales.

Shiseido Profit Jumps 40%

TOKYO — Shiseido Co. Ltd. registered strong net and operating profits for its most recent fiscal year ended March 31, and said, while its domestic sales fell, those abroad — especially in China — percolated.

This story first appeared in the May 1, 2008 issue of WWD.  Subscribe Today.

The Japanese beauty giant posted a 40.2 percent year-on-year spike in net profits to 35.46 billion yen, or $311.3 million at average exchange, and a 26.9 percent increase in operating profits to 63.47 billion yen, or $557.2 million.

Shiseido attributed the rise in operating profits to marginal gains due to sales expansion, plus efforts to rein in expenses. The company’s operating margin came in at 8.8 percent, surpassing Shiseido’s target of 8 percent or higher in fiscal 2007-08. It posted extraordinary profits in the form of a gain on the sale of shares in Shiseido Logistics Co. Ltd. and Shiseido Lease Co. Ltd.

Shiseido’s net sales in the period were 723.48 billion yen, or $6.35 billion, up 4.2 percent. Its domestic cosmetics revenues fell 1.9 percent to 439.02 billion yen, or $3.85 billion, due to the cooling of consumer sentiment in the second half of the period. Cosmetics sales generated abroad, meanwhile, rose 17.6 percent to 263.7 billion yen, or $2.31 billion. That business was driven by China, and got a boost from the effects of a weaker yen.

In China, Shiseido focused on its channel-specific brand strategy. For department stores, for instance, it centered attention on its Aupres and Supreme Aupres brands. And for self-service stores, Shiseido concentrated on fostering its Urara business, leading to strong like-for-like sales.

Elsewhere abroad, sales in the Americas rose 7.6 percent to 59.33 billion yen, or $520.8 million. In Europe, they rose 6.3 percent to 92.79 billion yen, or $814.6 million, and in the Asia-Oceania region, they gained 16.3 percent to 112.15 billion yen, or $984.5 million.

— Koji Hirano

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