The world of fragrances tied to fashion and lifestyle labels has been somewhat turbulent in the past 24 months, with a lot of changes in licensing partnerships and in licensees’ strategies for their designer portfolios. Some of the notable developments include:
- Fashion sport brand Lacoste signed Inter Parfums to a 15-year global agreement that begins January 1, 2024, with the first product launch expected later that year. The terms of the deal include an “entrance fee” of $95.5 million (€90 million). The December announcement came just a day after Lacoste and Coty announced that the latter would sell its license back to Lacoste after a successful six-year alliance that led to improvements in quality, sales, and positioning. At the time of the sale, Coty noted that its objective was to focus on its largest licenses going forward.
- G-III’s Donna Karan and DKNY brands moved to Inter Parfums as of July 2022, in a deal announced in October 2021. The agreement includes existing scents with top sales levels and critical acclaim, as well as new products to be launched starting in 2023. The brands had been with Estée Lauder for 25 years, since 1997. Estée Lauder announced in the fall of 2021 that it would shutter its designer fragrance division, with most of its key licensing agreements ending between then and 2023. It planned to hold several licenses, however, including Tom Ford Beauty, Jo Malone London, and Aerin, among others.
- Richemont’s Dunhill label and Inter Parfums announced in April 2022 that they would part ways after a 10-year relationship that began in 2013. The partners have continued to sell the products as usual until the official end of the agreement this year. At the time of the announcement, Inter Parfums noted that it planned to focus on its biggest current licenses, although it also said it planned to expand its brand portfolio overall through new deals. No new fragrance deal has been announced for Dunhill yet.
- Superdry signed a 10-year license, announced in April 2022, with Lalique Group, for women’s and men’s perfumes, with the first scent planned for spring 2024. Superdry first launched into the fragrance category back in 2011.
- PVH’s Tommy Hilfiger brand announced last January that it had named Give Back Beauty as its licensee for fragrance, beauty, and wellness, with the first new products expected to debut this year. The deal also includes a takeover of the label’s existing fragrances, including Impact and Tommy Now. In addition to fragrance, the agreement includes cosmetics; skin, hair, and body care; and home fragrances. The Hilfiger license had been with Estée Lauder since 1993.
- Dolce & Gabbana partially terminated its licensing deal with Shiseido and its Beauté Prestige International division, effective in December 2021. Most global licensing activities ceased, with the exception of those carried out from France through BPI, for a limited time. The two partners had been together since 2016. D&G announced shortly thereafter, in February 2022, that it would assume 100% control of manufacturing, sales, and distribution of its fragrance and beauty portfolio as of January 2023, establishing a new entity called Dolce & Gabbana Beauty to oversee the business. Shiseido said its decision to end the license was in keeping with its new strategy of focusing on profitability and cash flow rather than business growth.
- Salvatore Ferragamo licensed Inter Parfums as its fragrance licensee for a period of 10 years, with a five-year optional extension, in a July 2021 agreement. The business is being handled from a new wholly-owned subsidiary in Italy, with many employees of Ferragamo’s former in-house-controlled fragrance business joining the licensee organization. In December 2021, Inter Parfums followed up with a new license for Emanuel Ungaro fragrances, also handled through the new Italian subsidiary. That deal, which includes fragrance and other beauty categories, was also for 10 years with a five-year option; Ferragamo previously served as Ungaro’s fragrance licensee.
- Capri Holdings’ Michael Kors brand, which had been with Estée Lauder, entered into a new 15-year licensing deal with EuroItalia in 2021. At the same time, Capri announced that its licensing deal with EuroItalia for Versace, which has grown to one of the biggest luxury fragrance programs in the world, would be extended for another 15 years, on top of the 15 the partners have already worked together.
There have also been some renewals that will result in continuity for key brands in the industry. These include the renewal of Coty’s Hugo Boss licensing agreement, announced in December 2022. The partners have been together since 2016 and the new license, which includes all BOSS and HUGO fragrances for men and women and contains no material changes in licensing terms, the partners said, runs to 2035. Coty noted in the announcement that its top six brands account for 80% of its fragrance business and that collectively they should see stability ahead, with the remaining duration of the contracts for those six averaging 10 years.
One of the results of this period of change is growing power for Inter Parfums, already a key player in the designer-licensed fragrance sector. It has seen strong sales growth company-wide in both 2021 and 2022; just yesterday it announced that it expects full-year 2022 net sales to reach $1.08 billion, a 23% increase over the previous year, thanks to strong fourth-quarter sales. It predicts that growth trajectory will continue into 2023.
A note that we have posted our annual review of the top licensing trends of 2022. If you have not done so yet, you can read the piece here.