[Investigation] Perfume: an extension of the luxury domain (Part 1/3)

As a gateway to the brand universe for an aspirational, less affluent clientele, perfume has served as a geographic gas pedal and anti-crisis remedy for luxury companies. While uncertainty is gaining ground, the potential of the Chinese market is giving new importance to this market, to the point that many players want to challenge L’Oréal on its own ground.


The insolent health of Beauty


Although once shaken by Covid, Beauty is now experiencing a rebound in sales, to the point that the major luxury groups are intensifying their diversification and multiplying their investments.


Judging by the number of mergers, acquisitions, and operations in this sector, it has become dynamic and ultra-competitive. L’Oréal, which missed out on the purchase of Byredo in favor of the Spanish group Puig, has just acquired Aesop – the Brazilian group Natura & Co’s nugget valued at 2 billion dollars – under the nose of LVMH and Shiseido. For its part, Estée Lauder has just acquired Tom Ford Beauty and will take over the development of Balmain Beauty. The Coty group has also sold its Lacoste license to Interparfums.


The economic performance of the Beauty category partly explains this renewed interest in the sector, as well as the deteriorated economic context, which forces occasional luxury consumers to make new choices.


L’Oréal, the historic specialist in Beauty, has thus positioned itself particularly well, demonstrating the strategic nature of this accessible luxury product. The L’Oréal luxury division has been THE division of all achievements for the past two years. With 14.6 billion euros in 2022, it has the best sales of the group, an increase of 18.6% as reported, where the growth of the L’Oréal group is only 10.9% on a comparable basis, at 38.26 billion euros. But nothing is more desirable than its operating margin of 22.9% compared with 19.8% for its “consumer” products.



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Featured photo : © Louis Vuitton

Victor Gosselin
Victor Gosselin
Victor Gosselin is a journalist specializing in luxury, HR, tech, retail, and editorial consulting. A graduate of EIML Paris, he has been working in the luxury industry for 9 years. Fond of fashion, Asia, history, and long format, this ex-Welcome To The Jungle and Time To Disrupt likes to analyze the news from a sociological and cultural angle.

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