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.
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For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews