Outbidding L’Oréal, Puig Acquires Majority Stake of Byredo

Byredo, the top Swedish luxury fragrance brand that has attracted the attention of Chinese department stores and shopping malls, has finally achieved results.

A few days ago, the Spanish beauty and fashion group Puig issued a statement announcing that it will acquire a majority stake in Byredo. The brand's original majority shareholder Manzanita Capital will continue to hold a minority stake, and founder Ben Gorham will continue to serve as Chief Creative Officer.

Less than two weeks ago the French newspaper Le Figaro reported that L’Oréal was expanding its portfolio of luxury perfume brands by completing its acquisition of Byredo.

French media pointed out that L’Oréal had attempted to acquire Byredo and was willing to pay 1 billion euros (about 7.1 billion yuan) for it, but in the end Puig’s offer surpassed the competitors. According to market sources the acquisition has been completed for more than 1 billion euros.

The person in charge of a Chinese domestic department store told the Cosmetic Business Online (CBO) reporter that many brands under the Puig Group are increasing input in the Chinese market. He is hoping that, under the leadership of Puig, Byredo can enter department stores with a more open mind. 

01

Co-Create a New Luxury Beauty

Byredo is a luxury fragrance and lifestyle brand founded in Sweden. Byredo began a steady expansion from its perfume products in 2006, launching leather goods in 2018 and cosmetics in 2020. More recently, the brand has also attracted high-profile former Chanel makeup artist Lucia Pica as its Creative Image and Makeup Partner. At present, Byredo has established its own “retail empire” in high-end department stores and shopping centers around the world.

“Byredo has established a culture and a tribe that people want to belong to.” Manuel Puig, Vice Chairman and Chief Sustainability Officer of Puig Group, said.

“Since 2006, I have had the privilege of working with people who believe brands can redefine the culture of luxury and beauty. This brand is both inspiring and inclusive. Over the past 15 years the brand has experienced steady and significant growth, bringing new challenges and opportunities at every stage. I am confident that Puig's experience with founder-led beauty and fashion brands will help us reach our full potential across multiple categories. Puig showcases a competitive and disruptive approach to business – which truly resonates with Byredo’s culture.” Byredo Brand Founder Ben Gorham said.

This is Puig’s second acquisition since the outbreak of the pandemic. In June 2020 Puig acquired British make-up brand Charlotte Tilbury for around 900 million Euros. Currently, the Puig Group is owned by the third generation of its founding family. In 2019 Puig’s sales were 2 billion Euros (about 14.4 billion RMB), and the pre-tax profit was 226 million Euros (about 1.6 billion RMB).

Puig Group is not a newbie in the beauty field. Especially in the fragrance market, Puig is in a leading position. 

As a beauty and fashion giant in Spain, Puig Group owns brands covering the beauty & fragrance business, such as Paco Rabanne, Carolina Herrera, Jean Paul Gaultier, Nina Ricci, Dries Van Noten, Penhaligon’s and L’Artisan, Christian Louboutin and Comme Des Garcons, as well as lifestyle brands Adolfo Dominguez, Antonio Banderas Shakira and Benetton.

At present, the perfume business makes Puig Group the world’s fifth largest fragrance-maker, with almost 10 percent of market share. In addition, Puig’s Derma division incorporated the Uriage and Apivita brands and Puig’s 50% stake in Spanish skin care firm Isdin. These three brands together position Puig as the third largest player in Europe in the sector of dermo-cosmetic products for sale in pharmacies. 

Earlier, Puig Group reached a beauty agreement with highly coveted luxury French fashion label Jacquemus, and Jacquemus is reportedly launching a beauty brand with Puig in 2022. Earlier this year Puig Group's Belgian fashion brand Dries Van Noten also made efforts to enter the beauty market by launching perfumes and lipsticks. 

02

Accelerate to Build Strong Position in the Chinese Market

At the end of 2020 Puig announced the Group's medium-term development plan to 2025. The goal is to achieve sales of more than 3 billion Euros by 2023 and more than 4.5 billion Euros by 2025. Among the goals, by 2025 the Chinese market will account for 25% of its global sales.

In other words, by 2025 Puig Group's sales in the Chinese market will reach more than 1.1 billion Euros (about 7.9 billion RMB).

Among them, perfume is undoubtedly its ace card for the Chinese market, followed by makeup.

Since last year, Puig Group has accelerated the pace of planning in the Chinese market. Its four major perfume and beauty brands (Penhaligon's, L'Artisan Parfumeur, as well as French designer perfume & beauty brand Christian Louboutin beauty, and British makeup artist brand Charlotte Tilbury) have opened more than 10 stores in half a year. In addition, in September last year Puig also exclusively participated in the Scent Library B round of financing.

Meanwhile, Byredo is also accelerating its retail planning in the Chinese market. 

In November 2019 Byredo opened its first Shanghai boutique in Chinese mainland market, followed by more stores in Shanghai, Beijing, Shenzhen, Chengdu and other places in the following years. Nowadays, many shopping malls and department stores are full of expectations for this fragrance brand with luxury genes.

“At present, Byredo’s monthly performance in the store has reached 1.5 million RMB, which is not bad.” One person in charge of a TOP5 domestic shopping center told the Cosmetic Business Online (CBO) reporter.

On the other hand, Charlotte Tilbury, a makeup brand owned by Puig Group, has also continued to open stores in high-end department stores and shopping malls after officially entering the Chinese market in 2021.

According to the Person in Charge of a high-end department store, at present in the department store Charlotte Tilbury is performing well. Not long ago Charlotte Tilbury officially announced Chinese film star Gong Jun as its Global Spokesperson. Gong Jun is currently recognized by the industry as one of the male stars with super ability to promote products, which shows Charlotte Tilbury’s confidence in the Chinese market.

Interestingly Puig, the Spanish beauty giant who is particularly fond of the Chinese market, is also one of the beauty groups that likes to express their support for Chinese culture through traditional Chinese festivals such as the Chinese New Year through social media.

As with the sale of Byredo, will Diptyque, another major fragrance brand under the British Manzanita Capital which has attracted much attention in the Chinese market, have the same fate? This question has triggered speculation from the outside world. Maybe next time, the "L’Oréal"won’t give in.