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EXCLUSIVE: Biologique Recherche Gets New Investors

The company has brought in three European family offices and Peter Brabeck-Letmathe as long-term strategic partners.

PARIS — Biologique Recherche, the 40-year-old cult French skin-care brand with an institute on the Avenue des Champs-Élysées, has new investors to help bolster its expansion, WWD has learned.

Three European family offices — the Van Rappart family, Christopher Descours and the Frere family — and Peter Brabeck-Letmathe have signed on as long-term strategic partners. The level of their stakes in Biologique Recherche was not disclosed.

The company’s current owners, Pierre-Louis Delapalme and Rupert Schmid, will remain as copresidents, and Philippe Allouche, the company’s founders’ son, continues as head of creation.

Brabeck-Letmathe, chairman emeritus of the Nestlé Group, where he formerly served as chairman and chief executive officer, will become the non-executive chairman of Biologique Recherche’s board of directors.

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“We know the amazing growth potential of Biologique Recherche and have been carefully looking for the right partnership to grow our brand and take it to the next level,” Schmid and Delapalme said in a joint statement, adding an ambition for the group is to “further elevate our position in the luxury skin-care and wellness market. We are a client-centric business and organization, thus making our decision to partner with family-led partners an integral part of our future.”

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Brabeck-Letmathe said: “I am delighted to help our two copresidents accelerate international expansion while reinvesting in the team, R&D and product innovation. Biologique Recherche has already proven to be a worldwide leader in personalized skin care based upon a unique, proprietary science-based technology, and it is our intention to establish Biologique Recherche as a global leader on the top tier of the professional dermatological wellness market.”

The new investment in Biologique Recherche comes at a time when skin-care companies — especially in the premium category — are hot commodities. Investors are keen on the segment, which over the past two years has been clocking faster growth than either makeup or fragrance, spurred by the rise of Asian consumers and the swelling wellbeing trend.

In 2018, Biologique Recherche generated sales of about 40 million euros, with an operational margin of about 20 percent, according to industry sources. They believe Biologique Recherche sales are growing at more than 20 percent a year, and had ramped up after the company’s U.S. business was recently taken in-house.

Established almost 40 years ago, Biologique Recherche was founded by Yvan and Josette Allouche, a biologist and a physiotherapist, as a research-and-development operation to create treatments and formulate products for professionals.

Today, Biologique Recherche takes a clinical and personalized approach to treatments.

Almost two decades ago, Philippe Allouche moved into a creative role at the brand, injecting it with his holistic vision of skin as an organ connected to the entire body.

Following the death of Yvan Allouche in 2007, Schmid and Delapalme took over the company, with Philippe Allouche as a partner. Together, they opened a new laboratory where the brand’s products are made and internationalized Biologique Recherche, which is now present in more than 70 countries.

Biologique Recherche’s high-touch treatment center, at 32 Avenue des Champs-Élysées, has been operational for 23 years. There, the facial treatment, for instance, includes three main phases and seven stages.

Biologique Recherche's beauty institute in Paris.
Biologique Recherche’s beauty institute in Paris. Courtesy Photo

Body care and hair care are on offer, as well. All the treatments use Biologique Recherche’s products, which are billed to have a high level of concentration of plant, biomarine or biological extracts; no synthetic fragrances; high-quality active ingredients, and are made with a cold manufacturing processes.

The Biologique Recherche acquisition comes after a spate of skin-care purchases already this year. This month, for instance, Drunk Elephant was sold to Shiseido for $845 million. In July, U.K. brand Aurelia Probiotic Skincare was acquired by Health & Happiness, the Hong Kong-based wellness group that owns French nutrition brand Biostime and Australian vitamins and supplements brand Swisse.

In June, Unilever purchased luxury skin-care brand Tatcha for an estimated $500 million.

The start of 2019 saw a flurry of skin-care buys as well. Beauty group L’Occitane International SA acquired British premium skin-care and wellness brand Elemis in January for $900 million. In the same month, private equity firm Gryphon Investors took over the Roc skin-care brand from Johnson & Johnson Consumer.

Skin care eclipsed makeup and fragrance as the fastest-growing beauty category starting in 2017. According to market research provider Euromonitor International, skin-care sales worldwide at constant-currency exchange clocked 7.5 percent gains versus color cosmetics and fragrance, with revenue growth of 5.5 percent each. Between 2018 and 2019, those categories registered rises of 6.8 percent, 5.9 percent and 5.8 percent, respectively.

“In current terms, value growth was the strongest for over a decade. Even in real terms — excluding inflation — 2018 still stands out as a strong year for the industry, reaching highs not seen since 2015, despite Western Europe’s flat performance,” Euromonitor beauty industry manager Hannah Symons wrote in a report titled “World Market for Beauty and Personal Care.”

“The robust results largely reflected Latin America’s sustained resurgence, following economic crisis, as well as Asia-Pacific’s continued strong growth,” she continued.

Symons noted the shift toward trading up and premiumization continues in the beauty and personal-care category. “However, changes in the perceptions of premium attributes are allowing the mass segment to narrow the gap by offering high-quality solutions and value-added characteristics, such as health and ethical claims,” she continued.