NEW YORK — Cradle Holdings, the beauty start-up that purchased skin care brand Erno Laszlo and English toiletries brand Penhaligon’s earlier this year, is showing no signs of losing its appetite for acquisitions."We have a short list of 12 other properties we’d like to acquire," Cradle chief executive Robert Nielsen said during a recent interview at the firm’s offices on Madison Avenue here. "We’re in the process of due diligence on our third."Though a dozen brands may fit Nielsen’s criteria of having "deep roots and strong inherent positions in need of nurturing," he expects to realistically have five or six brands under the Cradle umbrella by the end of next year. They will "represent the various segments" of fragrance, color and skin care, he noted, without elaborating on what the third acquisition may be, or what category it may represent.He added, however: "We’re not in the makeup business yet." Sources indicated the acquisition is likely to occur during the fourth quarter.Nielsen, along with Jane Terker, Cradle’s president and chief operating officer — both of whom are veterans of The Esteé Lauder Cos. — believe "nurturing" Penhaligon’s translates to opening more store-in-store concepts and freestanding stores in the U.S."Penhaligon’s has deep roots in that it is 130 years old," Nielsen said of the brand, which has had at least four owners in the last six years. As reported, Cradle purchased Penhaligon’s from Warnaco for an estimated $10 million to $15 million. "We thought, ‘here is a wonderful business that could be made into a bigger business without compromising its image.’"Currently, there is one Penhaligon’s store-in-store — at Saks Fifth Avenue’s flagship in Manhattan — and one freestanding store on Madison Avenue. Saks has entered into a pact to open six more of the store-in-store concepts by yearend, as reported. In the longer term, Cradle hopes to open Penhaligon’s departments in 30 to 35 more Saks Fifth Avenue locations by 2005 — the same year, it hopes to be operating 12 to 15 freestanding U.S. stores in major markets.Cradle may open a second freestanding store on the West Coast this year and expects to open three to five more freestanding locations in the U.S. next year. Internationally, Penhaligon’s has seven stores in the U.K., one in France and one in Hong Kong. There are points of sale in Italy and Germany as well.Sources estimate that the total worldwide sales volume of Penhaligon’s — which markets men’s and women’s fragrances; leather accessories like wash bags, slippers and makeup bags, as well as cufflinks, shaving products and clocks — is currently $25 million at retail.In the midst of the expansion campaign, Cradle is launching a new Penhaligon’s fragrance called Artemisia. American Flavors and Fragrances did the juice for the women’s eau de parfum, which includes floral, vanilla and jasmine tea notes. Artemisia will initially be available in two sizes, a 50-ml. for $60 and a 100-ml. for $85, and industry sources believe it could do $500,000 in first-year retail sales.

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