These days, major firms could be on the verge of divesting their non-core beauty assets, leaving the landscape wide open for shifts in market share, particularly as conglomerates such as P&G spend time and resources building up what are now just incremental brands into specialty niche players.
At LVMH Moët Hennessy Louis Vuitton, insiders say that for the past 18 months its Guerlain brand has been shown to various companies for a possible sale. They also say LVMH brands such as Givenchy and Kenzo, plus some of the firm’s smaller beauty holdings and LVMH’s Sephora perfumery chain, could be disposed of.
Unilever PLC’s prestige beauty division, which groups together numerous beauty brands including Calvin Klein Cosmetics, Cerruti, Lagerfeld, Chloé and Valentino, could also be a takeover targets going forward. While sources say the division is not currently on the market, Morgan Stanley had reportedly been called in some months ago to handle a sale.
Already, the beauty industry has been rife with mergers and acquisitions. Within the past six months, LVMH sold two indie brands, Urban Decay and Hard Candy, to the Falic family; Puig Beauty and Fashion signed a beauty license with Commes des Garçons, and Hutchison Whampoa acquired Europe’s leading health-and-beauty retailer Kruidvat Group through its A.S. Watson subsidiary — to name but a few.
Given the tough economic times and the industry’s struggles, most executives believe it is impossible to create new, large brands because of the steep investment required. Small brands, for their part, find it equally difficult to survive because of retail consolidation.