French luxury goods and cosmetics company L'Oreal has started exclusive talks with Clarins Group about buying the Mugler and Azzaro brands, L'Oreal said on Tuesday.
"The perfume category is at the heart of our global strategy for growth at L'Oreal Luxe. In this context, we would be thrilled to welcome Mugler and Azzaro," said Cyril Chapuy, president of the L'Oreal Luxe division.
“These signatures, with a long history in fashion and olfaction, would perfectly complete our portfolio of brands,” he added in a statement.
L’Oreal did not disclose financial details regarding the planned acquisitions in its statement about the talks.
The Azzaro brand was founded by Loris Azzaro in the 1960s and Mugler was founded in the 1970s.
L'Oreal has been trying to revive its sluggish mass market division at a time when its higher-end products such as Lancome or Kiehl's have been finding favour with shoppers seeking luxury anti-ageing treatments, for instance.
In April, L’Oreal reported an 11.4 per cent rise in first-quarter group sales to €7.6 billion driven by its more expensive brands.
A Clarins official said that the two brands’ combined represented sales of €416 million, or 26 per cent of Clarins’ group annual sales of €1.6 billion.
"This deal makes perfect sense in terms of L'Oreal's plans to strength its portfolio of brands. The company has built up via a series of acquisitions and generates enough cash for these types of deals," said Roche Brune Asset Management fund manager Gregoire Laverne. – Reuters
