PARIS — PPR and Groupe Clarins. Coty and Del Laboratories. Speculative reports have been rife that such companies are involved in M&A activities.
The pairing of such names — and more — will probably ramp up in the near term. And it won't all be buzz, said industry sources, who believe numerous beauty deals could be sealed in the months to come.
"There are midsized companies that will either decide to sell themselves or make acquisitions to reach a critical size to remain competitive," said Karine Ohana, partner in Ohana & Co., a boutique M&A firm in Paris. When it comes to fragrance manufacturers, critical mass is key to building muscle needed to negotiate with retailers and for advertising's sake, she explained. For cosmetics makers, it also concerns strengthening research and development.
"Companies might make acquisitions to gain either route to market, period, or to enter into emerging markets," said one industry source who requested anonymity. He explained another driver of M&A activity could be the need for companies to keep their numbers up in the event of an economic slowdown.
Further, financial sources say they expect more private equity firms, particularly smaller funds, to attempt to unload their investments, given lack of liquidity in the credit markets, and that the potential onslaught of firms on the selling block will begin to drive prices down.
Meantime, the Courtin-Clarins family — with 65.1 percent of Clarins' capital and 78.6 percent of its voting rights — has repeatedly said the company is not for sale, despite rumors to the contrary. Just last week, Christian Courtin-Clarins, president and chief executive officer of the firm, issued a statement (in response to speculative reports that Clarins has entered into negotiations with PPR) that said: "To this date there exists no element of a nature to be made public."
According to some speculative reports, PPR could offer its beauty division, YSL Beauté, to Clarins in return for up to a 30 percent stake in the company — and even a right of first refusal if the company is eventually sold.
In the months to come, Ohana believes beauty companies will continue searching for organic and natural brands to buy, as well as holdings to keep them competitive with pharmaceutical players.
Market watchers wonder whether L'Oréal might acquire Natura or Shiseido and if Procter & Gamble will snap up a skin care company. And that's just to name a few M&A possibilities being bandied about.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
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In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)