In its third luxurious and somewhat idiosyncratic acquisition in less than a month, the Estée Lauder Cos. Inc. has signed an agreement to purchase artisinal fragrance brand Editions de Parfums Frédéric Malle.
The deal is expected to close in January. Terms were not disclosed, although Malle’s business is estimated at roughly $16 million wholesale.
The Malle acquisition joins new siblings Le Labo, an irreverent artisinal fragrance brand that Lauder acquired on Oct. 15, and upscale skin-care business Rodin Olio Lusso, which it bought last week.
Lauder appears to have entered into an acquisition battle with L’Oréal, which has snapped up Carol’s Daughter; NYX Cosmetics; Sayuki Custom Cosmetics; Brazil’s Niely Cosméticos; maker of Chinese facial masks Magic Holdings International Ltd.; Decléor, and Carita this year, although L’Oréal’s acquisitions seem to be larger and more expensive deals than Lauder’s.
Earlier this week, Fabrizio Freda, president and chief executive officer of Lauder, revealed to analysts that while first-quarter profits plunged 24.1 percent, the company’s brands are growing, and he doesn’t plan to sacrifice innovation. “We expect to generate sales growth of 5 to 6 percent this fiscal year, with a significant contribution coming from MAC and our midsize brands,” he told analysts. “To maintain our steady annual growth, we are driving our portfolio on two main fronts. We are strengthening and expanding our existing brands to keep them relevant in all our regions, and at the same time, we are actively seeking and nurturing the next generation with an eye to creating the next big brands of the future.”
Freda hinted to analysts that he might not be finished shopping yet: “We definitely are always scanning the market for future high-potential brands. We do this regularly.…We look at every single category,” he said, adding that when there is a “significant brand with meaningful ideas, we are interested.”
The purchases appear to indicate a change in course for Lauder’s fragrance business, which traditionally has concentrated on department store blockbuster scents. Malle and Le Labo are both high-end niche fragrance brands with similar pricing, albeit in slightly different segments. Malle’s ultraluxury scents retail in the $200 to nearly $400 range — a far cry from the Lauder brand’s stalwarts such as Beautiful, which can be had for less than $75. Both Malle and Le Labo have publicly opined that there are too many fragrances on the market, which runs contrary to the department store model of anniversarying fragrance launches with new introductions.
Le Labo, on the other hand, seems to cultivate its quirkiness: on its Web site, the founders proclaim, “We believe that we are only young once, but we can be immature forever.” It’s a bit of a different spin from Malle, who tends toward the elegant in his messaging.
Malle, seen by many as the godfather of the current artisinal fragrance movement, introduced the Editions de Parfums in 2000. The concept: the world’s best perfumers would compose exclusive, creative fragrances sold under their creator’s names — including Dominique Ropion and Edouard Fléchier — and chosen by Malle. His only restriction to perfumers: “Eliminate all that is superfluous or merely decorative.” He insists that each fragrance be designed to uniquely embrace the body of each wearer rather than just be a “pretty scent.”
The Le Labo team echoes a similar philosophy: “We believe that there are too many bottles of perfume and not enough soulful fragrances,” the company claims.
The Malle collection comprises 21 fragrances created by 12 master perfumers globally. In June, Malle opened his second New York store at 94 Greenwich Avenue in Manhattan’s West Village. He also has three stores in Paris, and noted that he envisions two or three more stores in the U.S., perhaps in Los Angeles and Miami, as well as a store in London.
Fragrance is in Malle’s blood: he is the grandson of Serge Heftler, the founder of Parfums Christian Dior, and Malle began his own career in 1986 with Roure Bertrand Dupont. Malle is the nephew of director Louis Malle.
Le Labo is said to generate yearly sales of $20 million to $30 million, and has roughly 24 fragrances, which retail from $140. It also does bath products and candles.
All three acquisitions also give Lauder some serious muscle in global luxury distribution. The brands are sold in prestigious doors such as Barneys New York, Colette in Paris, Milan’s 10 Corso Como and Liberty of London.
All the acquisitions will be overseen by John Demsey, group president for the Estée Lauder Cos., who also oversees the Lauder brand, MAC Cosmetics, Tom Ford, Jo Malone — another niche fragrance firm Lauder bought in the Nineties during its last acquisition binge — and other brands.
“Editions de Parfums Frédéric Malle represents the epitome of elegance,” said Freda. “Malle’s uncompromising dedication to pure perfumery has established him as the most sought-after collaborator by the world’s most talented perfumers. He has created a true luxury brand that augments our portfolio of prestige beauty products.”
Added Malle: “The Estée Lauder Cos. has great respect for the art of perfumery and for the creativity, dedication and mastery required to create truly exceptional fragrance experiences,” adding that it supports entrepreneurial concepts while preserving each brand’s unique attributes.