Under the terms of the agreement, Shiseido will have the worldwide license to develop, market and distribute Tory Burch beauty products effective Jan. 1. The license has been held by the Estée Lauder Cos. since 2011. Terms of the deal were not disclosed.
“When I think of the beauty category, it’s beauty and fragrance, and I just feel that there is untapped potential from a global perspective,” said Burch in an interview. “From the very first meeting when I met Shiseido, it was clear we had very strong alignment, not only in our vision for the future, but just as far as our culture and our values [are concerned]. We’re both incredibly interested in innovation, women’s empowerment and unwavering commitment to think about evolution, as well, and what does that mean for an industry that’s been around for a long time.”
Beyond growing the fragrance business, Shiseido plans to explore the possibility of launching other beauty categories.
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“I’m very interested in the idea of skin, skin care, and what does that mean as far as beauty and makeup is concerned,” Burch said. “We haven’t explored exactly what potential, and what it will look [like] for us as a partnership, but the initial conversations over the last several months have been very inspiring of what it could possibly mean.”
“There’s a lot of opportunities,” said Marc Rey, president, chief executive officer and chief growth officer of Shiseido Americas. “There’s opportunity in terms of consumer base — the brand is significant in the U.S. but can grow much better here. There’s global potential — we can increase the consumer base [through] recruitment.”
“Tory’s very much into beauty and digital, and there’s a lot of things we can do in terms of digital innovation and frankly, beyond fragrances. So yes, we can grow fragrances, but the brand certainly has potential to grow beyond fragrances,” Rey continued.
Tory Burch’s fragrance line already has significant exposure in America, Rey noted, but has more potential for global reach. Burch said she plans to be very hands-on with the beauty business. “I’m very passionate personally about fragrance, for sure, and about skin and beauty,” she said.
The brand will work with Shiseido’s centers of excellence globally, Rey noted — with the fragrance group in Paris, with the makeup group in New York, and potentially with the skin care group in Tokyo, to develop future product innovations.
The Tory Burch beauty business will be run out of New York, managed by Shiseido Americas.
Masahiko Uotani, president and chief executive of Shiseido, noted that the Tory Burch brand has a clear identity and is “exactly the type of innovative partner we seek to enhance our portfolio as we continue to find new ways of cultivating consumer engagement and bringing value to our business and to society.” He said that Shiseido plans to leverage its R&D, technology and beauty expertise to “maximize” potential for the brand.
“[Tory Burch] fits comfortably in our portfolio, and it fits quite a lot in our values too,” Rey said. “From a business standpoint … it’s a modern, vibrant, American luxury brand, which is very complimentary to our portfolio. We have mainly European brands in our portfolio.”
Shiseido picked up the Dolce & Gabbana fragrance license in 2016, and also has licenses for Elie Saab, Narciso Rodriguez, Issey Miyake, Serge Lutens and Zadig & Voltaire fragrances.
On the values end, Rey noted that Burch has committed herself to causes, including women’s empowerment, and that she’s open to “doing things differently,” including on the digital front.
“We have a motto at Shiseido, which is ‘beauty innovation for a better world.’ On both parts, beauty innovation and a better world, Tory’s completely aligned with our values,” Rey said.
For Rey, the Tory Burch deal is the first since he added chief growth officer to his job description in January. He declined to talk in detail about Shiseido’s M&A strategy, but noted that the business is “trying to do intelligent acquisitions which compliment our portfolio [and] complement our know-how” and that opportunities span skin care, makeup, fragrances and technology.