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Nov 9, 2014
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Estee Lauder snaps up third luxury brand in a month

By
Reuters
Published
Nov 9, 2014

Estee Lauder Cos Inc bought French luxury perfume brand Editions de Parfums Frédéric Malle, its third acquisition in less than a month as the company looks to boost its portfolio of high-end luxury perfumes and skin care brands.

The maker of M.A.C. and Bobbi Brown beauty products joins rival L'Oreal in bulking up on niche brands, which have been eating into their market share.


Karen Graham, the face of Estée Lauder from 1970 through 1985 | Photo: Estée Lauder


Paris-based Editions de Parfums Frédéric Malle is known for its collection of fragrances designed by master perfumers around the world. Terms of the deal were not disclosed.

"The company has had a history of buying small brands and pushing them through its distribution channels. Frederic Malle will probably be the next generation of that," Sanford Bernstein analyst Ali Dibadj told Reuters.

The Frédéric Malle fragrances, which cost upwards of $150, are sold through five standalone stores in Paris and New York. They are also sold at Barney's in the United States and Liberty in London, Estee Lauder said.

The U.S. cosmetics company said in October it would purchase Le Labo, a high-end French fragrance brand. The acquisition is expected to close this month.

It also acquired Rodin olio lusso, an Italian luxury skin care oil brand founded by the New York stylist Linda Rodin.

In September, L'Oreal said it would acquire Niely Cosmeticos Group, one of Brazil's top independent hair coloration and hair care companies. It did not disclose the deal amount.

Consumers are suffering from brand fatigue in cosmetics and fashion and are increasingly seeking out brands that are more exclusive, less well-known and not so widely distributed as big brands.

Estee Lauder and L'Oreal reported disappointing quarterly sales this week, hurt in part by competition from such smaller niche brands.

Estee Lauder cut its full-year profit and sales growth forecast, while L'Oreal's third-quarter sales grew at their slowest pace since 2009.

Estee Lauder's shares were up 1.1 percent at $72.60 on the New York Stock Exchange on Friday afternoon.
 

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