PARIS — Inter Parfums SA is the latest beauty company to take a gamble on fashion.
This story first appeared in the March 20, 2015 issue of WWD. Subscribe Today.
The firm said Thursday that it is acquiring the Rochas fashion and fragrance business from Procter & Gamble Co., as the consumer products giant rethinks its place in beauty overall.
Philippe Benacin, chairman and chief executive officer of Inter Parfums SA, confirmed the transaction and purchase price of $108 million.
The deal marks a first step into fashion for the Paris-based subsidiary of Inter Parfums Inc. of New York, whose stable of licensed fragrance brands includes Montblanc, Jimmy Choo and Van Cleef & Arpels.
Benacin said the Rochas acquisition would “open up new opportunities in terms of creativity as well as aesthetic design and marketing choices. It will also allow us to apply a global approach to managing a fragrance brand boasting a very high name recognition and without time constraints.”
He told WWD: “Rochas was a major brand of the French fragrance industry. I think [it has] ingredients to do well.”
That, Benacin explained, includes its fashion component. Yet historically, it’s been difficult for companies with a beauty focus to successfully run fashion labels.
The Rochas fashion brand has been shuttered numerous times in the past. Marcel Rochas, a couturier known for his feminine silhouettes and for inventing a bustier, called the guêpière, founded his house in the Thirties. Following his death in 1955, the company dismantled its fashion operation, opting to concentrate on fragrance. It launched scents such as Madame Rochas, Monsieur Rochas, Eau de Rochas and Audace.
German cosmetics giant Wella purchased Rochas in the late Eighties and resurrected the fashion as an image machine. But Irish designer Peter O’Brien, on whom the house called in 1989, failed to generate buzz. Olivier Theyskens succeeded O’Brien in 2003. Despite critical acclaim, P&G, which inherited Rochas that year as part of its purchase of Wella, recognized fashion wasn’t a core competency and closed the then money-losing Rochas fashion business in 2006.
At the time, a P&G spokeswoman said: “Running a fashion business in terms of the distribution chain requires specific skills. We had to make tough choices.”
Rochas subsequently reintroduced fashion again and today, Alessandro Dell’Acqua is the house’s creative director.
Other beauty companies that have struggled with fashion include L’Oréal, which bought Lanvin in 1994 and sold it in 2001 after attempting to engineer a makeover miracle and with the stated aim to continue “refocusing on its core beauty business.” Groupe Clarins at one point stopped manufacturing the Thierry Mugler fashion brand (that has since been revived) to focus on its hit fragrances.
Benacin said the Rochas fashion component is “very important” and will remain. He also explained Eau de Rochas and Rochas Men will be kept the same, while the rest of the fragrance portfolio is to be reconsidered, with scents like Femme, Madame and Tocade possibly being updated.
Rochas in 2014 registered net sales of $46 million, bolstered primarily by the Eau de Rochas fragrance line. That includes $2 million of royalties generated by licensee agreements for Rochas fashion and accessories.
Benacin said: “Under Inter Parfums’ scope, we could generate approximately 25 million euros [or $26.8 million at current exchange] of sales in 2016.”
The Rochas acquisition, expected to close in the first half of this year, will be payable in cash and financed through a medium-term loan.
Boutique investment firm Ohana & Co. advised P&G on the sale of the Rochas fashion and beauty activities.
Inter Parfums SA has been particularly open to acquisitions since the March 2013 termination of the Burberry beauty license agreement.
The Rochas sale comes as P&G is slimming down to focus on more profitable brands. Thirty-five of those have already been sold, and sources said the company is weighing a potential initial public offering of its beauty business, which also includes brands such as Olay and SK-II. The Wella business is reportedly being shopped around, and Frédéric Fekkai is said to be looking to buy back his luxury hair-care brand.