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While neither party would discuss the terms of the deal, which was signed Thursday afternoon, sources in the market estimate the sale price between $45 million and $50 million for both licenses combined. That would leave LVMH with an aftertax profit on its total investment, according to estimates by market sources.
The sale of the Jacobs and Cole licenses follows the May 8 divestiture of the Michael Kors beauty business to The Estée Lauder Cos. for a sum estimated by industry sources in excess of $20 million. Thursday’s developments confirm a report that first appeared in WWD on April 11.
The Jacobs and Cole brands will be handled by Coty’s Lancaster Group, which is headed by president Michele Scannavini. Lancaster already has three designer licenses — Jil Sander, Wolfgang Joop and Vivienne Westwood. It is also home to Jennifer Lopez, who stunned the prestige fragrance world last fall with the success of her Glow by JLo fragrance. The Coty Beauty mass market division followed up this spring with another celebrity launch with a scent by Celine Dion.
Bernd Beetz, chief executive officer of Coty Inc., described the two designer businesses as “fitting extremely well” within the Lancaster mix and the stature of the designers will allow Coty to “give special attention to the U.S. market.” Jacobs’ fragrance business has mostly been centered in specialty stores, and Beetz indicated that the acquisition of the two licenses will allow Lancaster to extend its distribution deeper into more fashionable turf. In an earlier prepared statement, he said, “The whole team at Lancaster Group is looking forward to working with Kenneth and Marc to create new fragrances that will appeal to their existing clientele and beyond.” Speaking by telephone from Spain Thursday, Beetz added that he also has designs on the rest of the world, with plans to take Jacobs and Cole into Europe and Asia.
Beetz is familiar with the workings of LVMH, since he previously was president and chief executive officer of Parfums Christian Dior France. The market-leading J’adore fragrance was launched under his direction.