L’OREAL GOES DUTCH: SIGNS VIKTOR & ROLF IN GLOBAL BEAUTY DEAL
Byline: Jennifer Weil / With contributions from Miles Socha
PARIS — L’Oreal is hoping for a little bit of Dutch magic.
The world’s biggest beauty firm is adding a new label to its designer fragrance wardrobe, its first in 17 years. As spectacular as that sounds, even more so is the choice: The long-term deal inked Tuesday is with young Dutch design wizards Viktor & Rolf, whose brand will be positioned as a global player from the word go.
Viktor & Rolf, which is expected to launch its first fragrance by 2005, is part of L’Oreal’s Prestige et Collections International (PCI) division, overseen by Patricia Turck-Paquelier and including such established brands as Parfums Giorgio Armani and Parfums Cacharel.
WWD first reported that Viktor & Rolf were in discussions with L’Oreal about a beauty license on March 8.
“It’s great to be with L’Oreal,” Viktor Horsting said in an exclusive interview. “For us, it has been an ambition to get into perfume and beauty for a long time. We think fragrance and beauty are a very important part of fashion — they give a bigger picture than just clothes. We’re very interested in the aura around fashion, to create a world rather than just a product.”
Turck-Paquelier stressed the Viktor & Rolf brand will in no way be niche. “We think the brand has incredible potential because of Viktor & Rolf’s talents and clear, unique positioning in their category,” she said.
L’Oreal’s strategy is in contrast with that of most other major beauty groups, which have recently launched or are scheduled to introduce new designer fragrances with niche positioning. These days, many firms are cherry-picking young designers and focusing their creative energies on marketing, packaging and product development in order to cater particularly to a hip, 20-to-30-something clientele eager to spend.
The deal also represents a major move by L’Oreal to plug a gap in its portfolio. The group has a longstanding tradition of stressing organic growth through existing brands.
“Why are we launching a new brand?” she asked. “We thought we were missing a European name with a worldwide, couture aura.”
Viktor & Rolf will also be an additional sales driver to boost the company’s fine fragrance business, which currently generates slightly more than 40 percent of L’Oreal’s luxury goods products division, which had sales of $3.2 billion in 2001. Viktor & Rolf will be grown apace with the other PCI brands, albeit with different positioning.
“It’s a young, creative brand that brings a different viewpoint from our other brands,” explained Gilles Weil, vice president in charge of the luxury goods products division at L’Oreal. “[Viktor & Rolf’s] vision of the world is original, and they bring their sensibility, enthusiasm and difference.”
Turck-Paquelier explained Giorgio Armani embodies understated elegance with Italian roots; the French brand Cacharel targets young consumers, and Parfums Paloma Picasso will, after its upcoming relaunch, be characterized as an artistic luxury brand boasting Latin and South American heritage. But Viktor & Rolf is all about flamboyant design — worldwide. And L’Oreal clearly brings its own muscle to the deal — industry sources estimate the Armani fragrance and cosmetics business alone is approaching $700 million at retail worldwide.
Horsting and his design partner Rolf Snoeren, both 32, made a splash in 1998 by showing some of the most arresting, modern couture collections in Paris. Among their propositions were evening gowns a-tinkle with thousands of tiny bells and evening suits inspired by the mushroom-shaped clouds of atomic explosions. The duo launched their ready-to-wear line in February 2000 and eventually suspended their couture label.
Their collections, presented in spectacular, theatrical style, boast such conceptual themes as Black Hole, Hymn of Love and Long Live the Immaterial. Elements of their runway shows have included fog, black light and makeup, plus, most recently, cinematic blue light technology, which allowed the pair to project landscape imagery onto their fall-winter 2002 collection.
The designers’ conceptual slant lends itself to many other media. The pair has already tinkered with fragrance. In 1997, they created a make-believe scent — replete with advertising and bottle — for a Visionnaire exhibition.
“It represented an ideal,” explained Horsting. “It was part of a dream life of being famous designers, which [at that time] was not at all true. It was a genuine ambition.”
That ambition has become reality, and was among the characteristics that drew L’Oreal to Viktor & Rolf. There was also the brand’s worldwide potential — its name, for instance, was well-received in global tests — professionalism, maturity, international vision, story-telling and sense of luxury and irony.
It took less than one year to sign the deal.
While L’Oreal would not divulge the contract’s specifics, small designer brands generally reap royalties of about 4 to 5 percent of net sales of licensed fragrances, according to market sources. But royalties can be lower or higher, depending on the amount the licensor invests in advertising. For major designer brands with huge projected volumes, royalties can be from 2 to 5 percent. Most fragrance licensing contracts tend to be from five to 10 years in duration, with options for renewal coming up in the same intervals.
L’Oreal, however, was vocal about its goals for Viktor & Rolf.
“It is necessary to have realistic ambitions in setting up a new brand and to take the time necessary to have it known and accepted by distributors and future clients,” said Weil. “Starting from scratch demands enthusiasm, creativity, talent and patience from our teams and designers.” He said it is also important to keep from focusing on the short term.
Franck Salzwedel has been named manager of the Viktor & Rolf brand worldwide, reporting to Turck-Paquelier. He has worked with the company for more than a decade, most recently as marketing group manager at Parfums Giorgio Armani.
“Our mission is very much to translate the imagination and dreams of these guys,” said Turck-Paquelier, adding they make a perfect match with L’Oreal.
The feeling, seemingly, is mutual. “We have always liked the iconic value of design,” said Horsting. “[And] L’Oreal is really an icon of the beauty world.”