Acquisition Mania

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There has been a lot of words written about the latest big business acquisitions in the niche perfume space. I’m going to add a few more.

During the first week of November 2014 Estee Lauder purchased three niche companies: Le Labo, Frederic Malle Editions de Parfums, and Rodin Olio Lusso. This news was met generally with the reaction that Estee Lauder will ruin these brands. Examples used were the previous acquisition of Jo Malone by Estee Lauder ten years ago. Guerlain’s acquisition by conglomerate LVMH is also always mentioned.

Detractors tend to point towards these examples and say they aren’t the same since they were bought. The implication is the business has overtaken the artistry. Except that isn’t true. In Jo Malone’s case the availability expanded dramatically. I would also argue that under the stewardship of perfumer Christine Nagel some of the very best perfumes in that label’s history were produced. The ability to give the creative reins to someone like Mme Nagel only comes when there is a bit of big money behind a brand. If the future holds more opportunity for people to discover great perfumes like Le Labo Rose 31 or Frederic Malle Editions de Parfums L’Eau d’Hiver, how can that be bad? I have always wanted a wider distribution for niche perfume which has embraced the principles of niche perfumery to make something for the true aficionado without worrying about the bottom line. The big money sale of these brands show they have been successful at that and I am hopeful that more people can see there is more to perfume than the latest mass-produced fruity floral.

frederic-malle

Frederic Malle

I have also seen a number of comments around the idea that these two lines which have come to be prime examples of niche perfumery “selling out” is bad for the other brands out there. My short answer to this is, “Good!” One of the things that has distressed me is the proliferation of business people behind new niche brands who believe there is money to be made in this sector, quickly. If nothing else these sales show that it takes time to build a brand identity and allow that identity to find an audience. All of these moneychangers in the perfumed temple looking for a quick buck might realize there is a little more to it than fancy bottles, aspirational pricing, and high-concept marketing. If they want a quick score what the spate of brands bought by the big companies has shown is you better have a good track record over many years.

My bottom line is both Le Labo and Frederic Malle will continue largely unchanged and the only noticeable change will be the opportunity to buy some of their perfumes more widely, a good thing. It might also bring to an end Le Labo’s city exclusives since Estee Lauder would want to have those with a wider availability; also a good thing. Reformulations should be a non-issue as both brands were already IFRA compliant. I think that there are many good years and great perfumes ahead for both brands no matter who reaps the monetary benefits.

Mark Behnke

2 thoughts on “Acquisition Mania

  1. Good points. I hadn't thought about it in quite that way. I heard that Estee Lauder has already owned Tom Ford for quite a while, and that line has still come out with quite good scents. While solely money-oriented owners taking over a beauty company often has poor results (I am sad that Kiehl's was sold – and became absolutely unremarkable – just after I discovered the line; also I used to truly love philosophy's scents, which have become worse than boringly bad since the original owner sold the company), Estee Lauder looks likely to do quite well by their new acquisitions. I bought EL stock.
     

  2. i disagree. that wider audience (the people buying in douglas, sephora…) will be apalled by the price tag of 200+ Euros. ans so we will start seeing reformulations that will bring the price down. what do you think will happen to their quality? good bye CF as we know it today, goodbye Le Labo as we know it today. and before you say this will not happen, think again. plus, the concept of 'niche, exclusive, you name it' looses its significance the moment it becomes main stream. where is the magic? what next? Uncle Serge? Roja? that would be a sight, a reformulated 100 EUR max Diaghilev….

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