PARIS — L’Oréal is increasingly acquisitive of late.
In just a four-day stretch, the company revealed it had signed the Valentino fine fragrance and luxury beauty license, and bought Pulp Riot, the professional hair color brand with bright, bold hues that was born online.
On Monday, jointly with Valentino, L’Oréal said the long-term, worldwide licensing agreement goes into effect on Jan. 1. That license is currently held by Puig and before that was part of Procter & Gamble.
“With its unique combination of prestige and modernity, Valentino definitely will appeal to Millennial consumers around the globe and ideally compliments our brand portfolio,” said Nicolas Hieronimus, deputy chief executive officer at L’Oréal, in a statement.
L’Oréal’s Luxe Division also includes fragrance licenses such as Yves Saint Laurent, Giorgio Armani and Maison Margiela.
“We believe Valentino has great potential within the category and that with L’Oréal’s unparalleled expertise in the sector, we will be able to realize that potential,” said Stefano Sassi, ceo of Valentino.
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Meanwhile, L’Oréal keeps growing its share of the digital beauty space with its acquisition of Pulp Riot. Financial terms of the deal, which was announced on Friday, were not disclosed.
The buy of the label, which was started in 2016 by David and Alexis Thurston in Los Angeles, follows fast on the heels of L’Oréal’s purchase of Stylenanda, the South Korean lifestyle makeup and fashion company with a major online presence, earlier in May.
In the course of its brief life, Pulp Riot has already garnered more than 675,000 Instagram followers and generated net sales of $11 million in 2017.
L’Oréal said the brand has been transforming the professional hair color market by creating “industry-leading content, and using social media to effectively inspire and educate stylists across the world.”
Jean-Paul Agon, chairman and ceo of L’Oréal, called Pulp Riot “a very digital, very new, very up-to-date business in professional” during his speech at the VivaTech trade show in Paris on Friday.
Nathalie Roos, president of the Professional Products Division at L’Oréal, said in a statement that the company wants to “amplify the international development of this iconic brand. Its unique creative artistry and stylist-powered education will inspire the entire division.”
L’Oréal’s Professional Products Division has been returning to growth in the recent past. During the first three months of this year, it registered sales of 858.2 million euros, down 7.1 percent in reported terms but up 1.9 percent on a like-for-like basis.
“What we are looking for now are businesses that are very digital-minded,” Agon said. “For example, Pulp Riot is the first professional [hair color] brand that was created on digital. It [has] crazy, daring bold colors, and their success was generated by Instagram.”
“Partnering with L’Oréal, an incredible company, and with all of their heritage in color is a no-brainer for Pulp Riot,” Tevya Finger, ceo and founder of Luxury Brand Partners, Pulp Riot’s parent company, told WWD. “The brand has a perfect new home.”
“This acquisition has removed the risk off the table from our shareholders,” continued David Thurston, founder and ceo of Pulp Riot. “We partnered with L’Oréal because it gives us firepower to achieve our goals.”
He added nothing will change in the day-to-day operations of Pulp Riot, “but this opportunity gives us the best of both worlds.”
“We began our international expansion, and in just a short time sold in 33 countries,” Thurston said. “With L’Oréal, we believe our international expansion will grow at an exponential rate because they have a robust infrastructure in place.”
Today, Pulp Riot has 39 stockkeeping units, while 86 products have been formulated and are slated for release in the next four months. The line debuted with semipermanent hair color and since then has expanded to hit a broader market.
The brand’s best-selling product is the purple hair dye, and its biggest distributor is SalonCentric. Pulp Riot’s largest markets today are the west and east coasts of the U.S.
L’Oréal keeps ratcheting up its digital quotient. It has forged partnerships with the likes of London-based accelerator Founders Factory, Station F start-up campus in Paris and venture capital firm Partech Ventures, also in the French capital. Digital-native brands already in its portfolio include Urban Decay and NYX Professional Makeup.
“Today, obviously, when we look at an acquisition, we would look also at the digital footprint of those companies,” said Lubomira Rochet, chief digital officer at L’Oréal, at VivaTech. “Pulp Riot is an Instagrammable brand. Stylenanda is really a brand that has put again Instagrammability, retail-tainment at the heart of their model.
“If you take a company a few years before like NYX Professional Makeup, it was, again, a digital-first brand,” she continued. “And what is interesting is that in the integration, as Jean-Paul often says, within L’Oreal we didn’t ‘L’Oréalize’ those brands, we ‘NYX-ified,’ in a way, L’Oréal. So we are learning a lot from those acquisitions and from those digital-first brands.”