PUIG PURCHASES MYRUGIA

Byline: Jennifer Weil / With contributions from Jennifer Weil, Paris / Pete Born, New York.

PARIS — With its acquisition of Myrurgia SA, Puig Beauty and Fashion SL is digging deeper domestic roots and beefing up its international presence — particularly in Latin America.
The Barcelona-based, family-run holding company has taken a “substantial majority” stake in Myrurgia, Spain’s second-largest beauty company, confirmed Marc Puig, president of Puig USA and an executive officer of Puig B&F.
“It reinforces our position in Spain’s mass and class fragrance categories, along with other divisions,” he said, referring to skin care and cosmetics. Puig explained that the Myrurgia buy enables his firm to control about 24 percent of Spain’s fragrance market and also to boost its presence in Latin America.
While Puig would not divulge Myrurgia’s purchase price, industry sources estimate that it was less than $215.9 million.
(All figures are at current exchange rates.)
Myrurgia’s net sales for 1999 were $194.3 million, of which about half came from licensed products. The bulk of its business was rung up through sales of low-end prestige fragrances, such as Adolpho Dominquez, and upper-end mass scents, such as Massimo Dutti, Puig said.
Myrurgia’s portfolio is also expected to allow Puig to develop a business in color cosmetics and skin care — two categories where it has little or no presence — since it includes high-end French skin care firm Payot and Spanish color cosmetics brand Pinaud.
The Myrurgia business is to be overseen by Javier Cano, who also heads up the Spanish activities for Puig and is a member of Puig B&F’s executive team.
The Puig companies have long been a source of interest within the beauty industry thanks to their innovative marketing — especially with Paco Rabanne — and because they make up one of the few family-held firms remaining in the luxury goods industry.
Its sales last year were $647.7 million and are expected to reach $863.6 million for 2000.
Hofmann said, adding that credit should be given for efforts made.
Attorneys in the U.S. noted that ownership rights should have been squared away in the manufacturing agreement. That’s so that if the parties part ways, one of them can’t say it could still continue production for someone else. In addition, other documentation — patent registration or contract governing trade secrets — could help clarify who owns what.
These days, the issue of intellectual property rights, and its development under French law, is of critical importance to fragrance companies. In an unprecedented decision, a French commercial court ruled in September 1999 that a scent has the same intellectual property rights as a book or painting, and is protected under the same legal umbrella.
At issue were Mugler’s Angel fragrance and Molinard’s Nirmala, launched in 1992 and 1993, respectively. Mugler claimed that Nirmala’s juice copied Angel. While industry experts, including a perfumer and an electronic nose, were called in to compare the two, it was really the result of a blind survey of 1,100 women that most influenced the court, according to Mugler’s lawyer Jean-Jacques Le Pen at the time. “Angel was recognized as a work of art,” he said. Molinard was given until yearend 1999 to pull its scent. The company appealed late last year and is still awaiting a decision.
Legalities aside, nothing has stopped fragrance executives from putting in their two cents.
One U.S. based-perfumer said, “We’re in a kind of a philosophical debate. The Fifi award is [somewhat upsetting] since it seems to be the result of a deliberate and unilateral approach from Techpack to apply for a Fifi award. I probably would have approached BPI in this case and asked for some kind of clearance from BPI executives. I believe both BPI and Techpack should get full credit for the idea and its execution, respectively.”
Sources say that Techpack had given BPI prior notice, but Techpack would not confirm that assertion and the attorney for BPI, the only executive cleared to speak for attribution, could not be reached.
Bloomingdale’s in March rolled out the red carpet for Gaultier and his Fragile perfume. The New York-based retailer’s windows were filled with blown-up images of the innovative snowglobe bottle. Fragile signage appeared on pillars and escalators. And Gaultier fashions were prominently featured in the store.
According to industry sources, about 200 pieces were sold, totaling $13,500 for the day it was rolled out. U.S. distribution of Fragile, which was launched in Europe in October, will be limited to 110 doors.
The issue begs the question whether suppliers should get some recognition for their contribution, even though manufacturers say the execution is under their complete chain of command.
A Paris-based package designer said, “The only thing the packaging designer has is paternity over a creation, not ownership, since it is transferred over to the client. To us, the client is always the owner. I understand BPI’s position.”
The criteria for the Technological Breakthrough award for “cutting edge technological components” include fragrance creation, fragrance production, delivery systems and methods of fragrance ingredient extraction. The concept “must be original, have been created in 1999 and have the potential to move the industry as a whole.”
And how is The Fragrance Foundation responding? It has adopted the clarification agreed to between BPI and Techpack in Magnin’s July 3 letter, while still listing Techpack as the award’s winner.
And Green has grown a bit wiser as a result of the fracas. “In the future,” she said, “we will have to look at how to deal with any supplier-submitted entry with a client’s name on it.”

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