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The answer to these questions was include major implications for the luxury industry. As the world’s pleasure designers struggle to make a income in trend, they’re looking to boost sales and profitability by expanding into beauty. According to a Mckinsey review, scent and cosmetics are a “flagship” business that can drive development in many other categories for extravagance brands.
But the method is not without hazards. The crowded category can be difficult to crack. And the divisions of a brand often do n’t speak to each other, making it difficult to create integrated marketing and communications campaigns.
The circumstance of Burberry, which took its beauty enterprise in- house under former Ceo Angela Ahrendts in 2013, offers a cautionary tale. The decision to terminate the agency’s licensing contract with Interparfums Sa, which held the permit for its Montblanc and Van Cleef & Arpels shampoos, sent shares of the company tumbling 9.4 pct on Sept. 6. Kering’s acquire of Creed at a 14- periods revenue multiple in October furthermore made investors sit up and take notice.
