Estee Lauder Companies Signals Growing Luxury Appetite, Possible M&A On Horizon
ELC’s Guillaume Jesel has been named president of global brands overseeing Tom Ford Beauty and Balmain Beauty, the latter targeted for launch in fall 2024 under a licensing agreement with the French fashion house announced on 26 September. Jesel also will head up luxury business development with a “key role in prospective acquisitions and investment strategy.”
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Estee Lauder’s agreement values Tom Ford Beauty and its trademarks at $2.8bn. Acquisition will “fortify" growth plans for the brand and help to fuel long-term luxury beauty momentum, says CEO Fabrizio Freda.
The Estee Lauder Companies recorded a sales decline of 10% in the fiscal 2022 fourth quarter, generally in line with revised guidance in May as new China lockdowns were impacting its business. Challenges in China and fragrance license terminations are expected to weigh heavily on fiscal 2023 first-quarter results as well, with improvements in Q2 and, ultimately, 7% to 9% organic growth for the year.
Expecting China to evolve into the largest prestige beauty market in the world, Coty believes it is well-positioned to benefit as one of the fastest-growing beauty firms in the country as consumers increasingly flock to fragrance. The firm’s Asia Pacific sales grew 9% in the fiscal third quarter, reported, to $158.1m.