The handoff of the Kors business to Lauder also appears to be the first step in the anticipated sale of the beauty business of two other designers, Marc Jacobs and Kenneth Cole. Although no one is commenting, it is understood that Coty Inc. is in serious negotiations to acquire both businesses. This follows LVMH’s sale in December of two indie brands, Hard Candy and Urban Decay, to the Falic Group, a travel retail company.
The terms of the Kors deal were not disclosed, but sources estimate the price of the deal at roughly $20 million. Lauder said it will integrate the Kors business into its Aramis and Designer Fragrances Division, which is led by group president Patrick Bousquet-Chavanne and president John Karp.
The deal confirms a report that appeared in WWD on April 11, page 2. The purchase marks the second brand that Lauder has acquired this year, as the company snapped up French skin care firm Darphin, as well.
Shortly after the Kors deal was signed Thursday afternoon, Bousquet-Chavanne appeared extremely upbeat about the potential of the business, despite the bearish nature of the fragrance sector, particularly in the U.S. He seemed enthused about working with Kors and his majority partners, Lawrence Stroll and Silas Chou, all of whom he praised for their “tremendous track record, energy and talent.” He spoke of the “significant growth potential of the brand” and pointed to “the quality of the label and the quality of the management” in professing a faith in the odds for success.
“We inherited a good business,” he said. “The people at LVMH, under Camille’s [McDonald, president and ceo of Parfums Givenchy Inc.] leadership have done a good job of bringing this product to market.”
Bousquet-Chavanne pointed to the overseas potential of the Kors fragrance, particularly in London, where the brand has made early strides, and in Paris, where it recently launched. Speaking of the beauty and fashion brands working “side by side in tandem,” Bousquet-Chavanne described the new partnership as “a meeting of minds — the vision of what could be achieved jointly in a convergent future.”