Paco Rabanne's 1 Million

PARIS — Puig’s profits rose 6 percent and sales remained stable in 2018, negatively impacted by currency fluctuations and some changes to reporting methods.

The Spanish fragrance and fashion house’s net profits last year reached 242 million euros, while net sales came in at 1.93 billion euros, the company said Thursday. At constant group structure and exchange rates, sales advanced 5 percent.

Puig reiterated its goal of crossing the 3 billion euro revenues threshold by 2025, and said it aims to boost the Paco Rabanne and Carolina Herrera brands above the 1 billion euro sales mark.

The latter objective was set after Puig’s fragrance license with Valentino was discontinued by mutual agreement in 2018. That caused a strategy shift involving giving more support to Puig’s own brands – particularly the larger ones.

“We are more ambitious with our expectations for the potential role of those brands,” Marc Puig, the company’s chief executive officer, told WWD.

On a geographic basis last year, 86 percent of Puig’s sales were generated outside its domestic market, where the company remained leader in both selective and mass-market perfumery. The group’s retail sales of prestige fragrances to end consumers in Spain increased by more than 1 percent, according to the company.

Forty-one percent of the group’s overall revenues were rung up in emerging markets, where sales increased 4 percent in comparable terms, and European Union countries.

Puig’s sales in Argentina and Brazil were down 6 percent, due to the drop in exchange rates there. Meanwhile, sales in developed markets grew 8 percent in reported terms and 9 percent on a like-for-like basis.

Altogether the company, which manufactures in Spain and France, sells its products in more than 150 countries, of which 26 have affiliates.

When it comes to its own brands, Paco Rabanne’s fashion collections, designed by Julien Dossena, have been well-received. “He’s doing a super job,” said Puig. “[Paco Rabanne] is our biggest brand,” he added, referring to the combined fashion and fragrance activities.

The label’s perfume franchise has ranked fourth worldwide since 2015, with two lines – Invictus and 1 Million – placing in the top 10 of selective fragrances. The latter maintained its fourth rank, a decade after launch.

Carolina Herrera’s perfume business moved up three notches in the prestige women’s fragrance ranking worldwide, reaching the 11th spot, in spite of contraction noted in its key markets. The brand – which was billed as the fastest-growing feminine line in the fragrance industry last year – kept its pole position in Latin America and bolstered business with strong sales from the Good Girl scent.

Wes Gordon has been creating Carolina Herrera fashion since last February, after the label’s founding creative director passed him the design reins.

“Wes is someone that is respectful to the legacy of Carolina Herrera, and that’s something that we wanted to find with whoever took over the house,” explained Puig. “The business is progressing very nicely.”

Plans are afoot for both the Rabanne and Herrera brands to enter new categories soon.

Meanwhile, the Jean Paul Gaultier fragrance label reached a historic sales level in 2018, three years after Puig took the business in-house. Gaultier the couturier’s “Fashion Freak Show,” recounting his life story, has had two extensions to its run in Paris already since last October.

Nina Ricci underwent a brand relaunch, with new creative directors Rushemy Botter and Lisi Herrebrugh, and general manager Charlotte Tasset. “We feel the first reactions have been very positive,” said Puig.

Dries Van Noten, which was acquired in 2018, is to be expanded into the perfume category with highly selective distribution.

“There are operational things we are working on with Dries and his team,” said Puig. “It’s clear the two houses have a common language. We are really excited about the future of Dries Van Noten.”

Also last year, Puig inked a deal with Christian Louboutin for the development of beauty products. The high-end footwear brand has a few doors worldwide selling its color cosmetics, marking Puig’s entry into that product segment.

“We are eager to, step by step, gain experience and territory in that category,” said Puig. “So far the potential of this brand, the evolution and progress we’ve made is beyond our expectations. And in the near future there will be some of the brands in our portfolio that will enter into the color-cosmetics category, too. We want to do it right – not necessarily big up front.”

In Puig’s portfolio, as well, are 35 fully owned Penhaligon’s stores, which with the digital activity generate more than 70 percent of the sales of the brand, which is posting double-digit growth. L’Artisan Perfumeur, registering a strong performance, is now ready to be scaled internationally.

Puig would not disclose any details of the fragrance license with Prada, which, as previously reported in WWD, is under discussion.

However, the executive did say that Puig is open to continuing to expand its portfolio through acquisitions. “Opportunities come when they come, and sometimes you have to look for them,” said the executive. “But we’ll be active going forward.”


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