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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast