By  on January 17, 2006

PARIS — L'Oréal is revved up about Diesel, its newest fragrance license.

The French beauty giant has signed a long-term deal with the Italian denim firm, which is famous for its strong youth appeal and edgy advertising.

While specifics of the license were not disclosed, L'Oréal and Diesel executives told WWD their expectations for the new business. The first Diesel scent is due to hit perfumery and department store shelves at the end of 2007.

"We think Diesel has the potential as a brand to be in the top 10 of fine fragrances worldwide," said Marc Menesguen, president of L'Oréal's luxury products division. While Menesguen declined to offer specifics, it is generally understood that for a fine fragrance brand to land a top 10 position globally, it needs to generate about $365 million.

Renzo Rosso, Diesel's chief executive officer, and Menesguen agreed the synergies between their two companies are manifold.

"I chose L'Oréal because it is very close to my mentality," said Rosso. "The most important thing is to build something new, something different, something strong."

He said the two companies share a passion for their work, too.

Explained Menesguen, "The first reason we signed with Diesel is because it is a huge business, and the second is that it is perfectly complementary with our existing brand portfolio. We have Giorgio Armani, which is Italian; Ralph Lauren, which is American, and Lancôme, which is French. With Diesel, we touch a new area of experience in fragrance."

The billion euro, or $1.2 billion, Diesel brings a demographic reach different from that of L'Oréal's other prestige brands, which include Viktor & Rolf, Parfums Cacharel, Paloma Picasso and Parfums Guy Laroche.

"Diesel is an icon among young people in all countries," said Patricia Turck Paquelier, international brand president of L'Oréal's prestige and collections division.

"We were amazed at how huge and exciting the brand is," Menesguen said of Diesel, which was started in 1978. "It attracts men as well as women."

L'Oréal was also lured to Diesel for what Menesguen called its "unique point of view."

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