PARIS — Another of fashion’s unlikely pairings has unraveled.
WWD has learned that Helmut Lang and his fragrance licensee, Procter & Gamble, are parting ways after a six-year association.
Meanwhile, reports are circulating that P&G is in a dogfight with L’Oréal over the Dolce & Gabbana beauty license, which the Italian-based Euroitalia has held for over a decade and is reportedly due to expire sometime in 2006.
As for Helmut Lang, a spokeswoman for Lang confirmed that the agreement had been jointly terminated, but declined to elaborate on the reasons.
Lang is in the process of “reviewing options” regarding the production and distribution of his fragrances and ancillary products, she said. In the interim, they will be carried at Lang boutiques and the Lang perfumery on Greene Street in New York, she added.
Lang’s agreement, announced with much fanfare, is with P&G’s Geneva-based prestige beauty division. The Austrian-born, New York-based designer is said to have demanded complete artistic control over the fragrance and image.
Indeed, when he launched his men’s and women’s signature duo three years ago, marketers at P&G had pushed for scents that had tested better. In 2002, when Lang introduced the new men’s scent, Cuiron Pour Homme, he cited no specific target customer. “It’s more important to do a great fragrance first,” he said at the time. “The right customer will follow.”
Paolo de Cesare, P&G’s president of global prestige beauty and skin care, had no comment.
Concerning the Dolce & Gabbana speculation, Euroitalia officials refused to comment. A Dolce & Gabbana spokeswoman had no comment.
Euroitalia put Dolce & Gabbana on the beauty map, starting in 1992 with the introduction of Dolce & Gabbana Pour Femme and the 1994 launch of Dolce & Gabbana Pour Homme.
Those scents were followed by Dolce & Gabbana By for Woman and By for Man in 1997, and the D&G Feminine and D&G Masculine fragrances in 1999. Three years ago, Dolce & Gabbana introduced the Light Blue women’s scent that has become a brand bestseller. And, most recently, in 2003, it introduced Sicily for women. The advertising for Sicily won a FiFi award at the prestigious Accademia del Profumo last week during the Cosmoprof trade fair in Bologna.
When asked if P&G is after the Dolce & Gabbana license, de Cesare had “no comment.” When asked about reports of her firm’s pursuit, Patricia Turck-Pacquelier, international brand president of L’Oréal’s Prestige and Collections International, also would not comment.
Industry sources estimate Dolce & Gabbana’s fragrance business rings up more than $50 million in retail sales in the U.S. alone. — Jennifer Weil and Miles Socha
L’Oréal Sales Rise
PARIS — French beauty giant L’Oréal posted consolidated sales of $4.51 billion, or 3.7 billion euros at current exchange rates, in the first quarter of 2004, up 1.3 percent year-on-year.
At constant group structure and exchange rates, the company’s consolidated sales rose 5.4 percent. L’Oréal’s sales were negatively impacted by currency fluctuations. Also, its acquisition of a controlling stake in Shu Uemura and the purchase of Mininurse dragged down results with a net structural impact of 0.4 percent, the company said.
“These figures seem extremely encouraging, even if we attach only relative importance to the performance of a single quarter,” said L’Oréal chairman and chief executive officer Lindsay Owen-Jones in a statement. “It should be noted that the first quarter of last year was particularly strong, reflecting the decision at the time to bring forward launches, notably in the consumer division.
“All the cosmetics divisions have made a good start to the year and the achievements in each geographic zone are in line with our expectations,” he continued.
By cosmetics branch, professional products rang up $621 million, or 510 million euros, up 6.9 percent year on year; consumer products, $2.48 billion, or 2.04 billion euros, a 4.7 percent increase; luxury products, $1 billion, or 822 million euros, a 5.3 percent rise, and active cosmetics, $332.4 million, or 273 million euros, a 15.7 percent uptick.
Owen-Jones added that L’Oréal’s dermatology business has encountered “difficult conditions” in the U.S., its core market. The division, which is 50 percent-owned by the company, posted sales of $69.4 million, or 57 million euros, down 12.6 percent over the same period in 2003.
Owen-Jones said L’Oréal’s cosmetics sales growth in Western Europe, which was up 1.1 percent, to $2.43 billion, or 1.99 billion euros, comes “on top of a particularly high base of comparison last year.”
By region, L’Oréal’s cosmetics sales rose 5.7 percent to $1.13 billion, or 926 million euros, in North America. In other parts of the world — including Latin America and Eastern Europe — the firm’s cosmetics sales registered a 17.7 percent gain to $182.7 million, or 150 million euros.
“In the coming months, a more favorable historical comparison should allow us to further improve our growth rate,” Owen-Jones concluded. “The impact of currency fluctuations, once again strongly negative at the end of March, should be noticeably reduced over the rest of the year, based on present exchange rates.”
— Jennifer Weil
Doctor’s Dermatologic Formula Sold to North Castle Partners
NEW YORK — Executives from HDS Cosmetic Labs, makers of Doctor’s Dermatologic Formula skin care, have sold a controlling interest of the privately owned company to North Castle Partners LLC, a private equity firm based in Greenwich, Conn. Terms of the deal were not disclosed.
North Castle, which includes in its portfolio of investments firms such as Equinox Holdings Inc., Elizabeth Arden Salon Holdings Inc., and Avalon Natural Products, intends to more fluidly expand the 13-year-old cosmeceutical brand founded by dermatologist Dr. Howard Sobel.
The partnership will help DDF fund its recent purchase of an additional 80,000 feet of space, slotted for new manufacturing facilities, as well as continue the company’s “50 percent-plus per year growth” that has been achieved for the past five years, according to Joseph Contorno, chief executive officer and president of HDS Cosmetic Labs.
DDF’s entire executive team, including Contorno, Sobel and co-founder Elaine Linker, will remain with the company. DDF will also remain at its headquarters in Yonkers, N.Y.
According to industry sources, DDF generates an estimated $40 million in annual sales with sales of approximately 60 skin care solutions at doors across the country, including Bergdorf Goodman, Sephora, select Purebeauty stores in California and several beauty boutiques, such as Apothia at Fred Segal.
The deal between North Castle and HDS Labs follows the beauty industry trend of larger companies acquiring portions of smaller, yet well-established brands, to help them reach their full potential. In October, for example, Manhattan-based buyout firm AEA Investors purchased 80 percent of Burt’s Bees, the North Carolina-based natural cosmetics company.
As part of the North Castle and HDS Labs transaction, Easton Hunt Capital Partners, an early investor in DDF, has increased its investment in the company. — Andrea Nagel