Estée Lauder Acquires Frédéric Malle Fragrances
Perhaps one of the largest makeup brands in the beauty industry, Estée Lauder has decided to acquire the perfume brand Frédéric Malle. Created in 2000, Frédéric Malle is a fragrance brand that allows perfumers to create unique scents under their own names. For example, Dominique Ropion’s Carnal Flower has a sexy sultry scent while Pierre Bourdon is more classic and fresh. Obviously, creativity comes with a price tag for high-end perfume costing around $300 and more. The collection includes about 21 fragrances and is sold at their own stores in New York and Paris, along with Barney’s New York stores and Liberty in London.
Although Estée Lauder is a global makeup “superbrand,” owning brands such as MAC, Bobbi Brown, Tom Ford Beauty, and Clinique, its sales have not done particularly well within the last year. Sales have declined in Asia by 24% because of the strong US dollar and protest-plagued Hong Kong. There has also been a dip in sales in the United States. Estée Lauder acquired another French fragrance company called Le Labo, which has a similar creative feel to the Malle fragrances, however, they are much cheaper and have more of an apothecary vibe to them. The brand believes as well that there are “too many bottles of perfume and not enough soulful fragrances.” Estée Lauder also acquired the skincare line Rodin Olio Lusso last week.
So what gives? Why is Estée Lauder acquiring companies and brands that are small, high-end and don’t have as big of a customer base as, say, Clinique or Bobbi Brown? Those brands are found everywhere and address many women’s everyday needs because they produce good quality products and are also reasonably priced. If sales are declining, why acquire brands that aren’t as readily available? CEO and president of Estée Lauder Companies, Fabrizio Freda explains, “We are strengthening and expanding our existing brands to keep them relevant in all our regions, and at the same time, we are actively seeking and nurturing the next generation with an eye to creating the next big brands of the future. We definitely are always scanning the market for future high-potential brands. We look at every single category. [When there is a] significant brand with meaningful ideas, we are interested.” That being said, Estée Lauder companies are more interested in diversifying their line of products; it’s not necessarily who will make them the most money.