Leonard A. Lauder, Kilian Hennessy, Fabrizio Freda and William P. Lauder

Estée Lauder Cos. Inc. has acquired perfume brand By Kilian, expanding the business’ collection of luxury fragrances.

This story first appeared in the February 25, 2016 issue of WWD. Subscribe Today.

Founded in 2007 by Kilian Hennessy, By Kilian sells perfumes, candles and other accessories and has about $25 million in net sales, according to industry sources. Hennessy will continue to lead the brand under Lauder. The company did not divulge a purchase price, but industry sources estimate the price could have been as high as $80 million.

“Kilian Hennessy’s innate passion for luxury and fragrance influences every aspect of By Kilian,” said John Demsey, Estée Lauder group president. “As a brand builder, Kilian has done an incredible job of expressing his…olfactive and visual philosophy to his enthusiastic global fan base. We see a bright future for this brand, building on what Kilian and his talented team have already accomplished — and we can’t wait to get to work.”

By Kilian is sold in freestanding retail locations, select specialty stores and perfumeries in more than 40 countries, mostly in North America, Europe and the Middle East. Some of the fragrance collections are exclusively sold in certain regions, and many products come in refillable packaging, including crystal fragrance bottles.

“The Estée Lauder Companies not only understands the philosophy behind By Kilian — which is to bring perfumery back to the level of luxury that it enjoyed in the early 20th century — but also has the resources and support to help By Kilian continue to strategically grow by category, region and distribution,” said Hennessy.

Lauder’s slew of deals for premium scents underscores a wider industry trend towards fragrance premiumization and brings to a head the company’s drive to upgrade its fragrance portfolio. The By Kilian deal follows the company’s 2014 fragrance buying spree, when it scooped up Editions de Parfums Frédéric Malle, Rodin Olio Lusso and Le Labo.

“By Kilian is a perfect complement to our portfolio of prestige fragrances,” said Fabrizio Freda, president and chief executive officer of Estée Lauder. “Kilian has built a beautiful and sumptuous brand that elevates the art of perfume creation with elegance and uncompromising luxury. This acquisition gives our company a strategic opportunity to continue to build upon our leadership in ultraluxury fragrances.”

For the quarter ended Dec. 31, Lauder’s fragrance sales grew 7 percent year-over-year to $470.6 million. Net sales were up 3 percent to $3.1 billion for the quarter.

BNP Paribas was Lauder’s financial adviser for the deal, and Lowenstein Sandler LLP, Wragge Lawrence Graham & Co. LLP and Arendt & Medernach provided legal advice. Michel Dyens & Co. provided financial advice to By Kilian, and Skadden Arps Slate Meagher and Flom LLP and CMS Bureau Francis Lefebvre acted as legal counsel.

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