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.
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
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion