P&G Prestige Products (Switzerland)

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P&G Prestige Products is the fine fragrance and cosmetics division of packaged goods giant Procter & Gamble. With twin headquarters in New York and Geneva, the business manages a large portfolio of well-known luxury fragrance brands, mostly under license. Key brands include Hugo Boss, Gucci and Dolce & Gabbana. The business was formed in 2005 from the merger of Cosmopolitan Cosmetics, previously a division of Wella, with P&G's existing worldwide fragrance business. Currently ranked #2 behind L'Oreal, the group had originally set its sights on overtaking its rival to become the global #1, and was often identified by analysts as the potential buyer of smaller fragrance-led marketers such as Estee Lauder or Clarins. However, the poor performance of P&G's overall beauty business has become a major concern, and the group is now understood to be planning a complete withdrawal from cosmetics and fragrance, including the probable sale of P&G Prestige. Coty is widely rumoured to be the front runner in that auction. Several smaller brands have already been divested.

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Contact

P&G Prestige Products
47, Route de Saint-Georges
1213 Petit-Lancy 1, Geneva
Switzerland
Tel: +41 22 709 6111

P&G Prestige Products Inc
909 3rd Avenue
New York, NY 10022
United States
Tel +1 212 980 6400

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 20th Jun 2013: Ads of the Week "Street Of Dreams".  The ad for P&G's Dolce&Gabbana: The One fragrance offers a dream team combining brand ambassadors Scarlett Johansson and Matthew McConaughey with director Martin Scorsese. The result is a charm; as artificial as any movie you've ever seen, yet you could almost believe it was a real snapshot of a moment in each actor's off-screen life. 

Adbrands Weekly Update 20th Jun 2013: Procter & Gamble's prestige fragrances division signed up British fashion designer Stella McCartney as well as the Alexander McQueen label. McCartney's previous licensing deal with L'Oreal was terminated this month "by mutual consent", and L'Oreal pulled the plug on an earlier line of McQueen fragrances in 2008. 

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Brands & Activities

P&G's fragrance portfolio is led by seven so-called "thrust" brands, divided into two product groups of Prestige and Luxury. The Luxury portfolio is led by Hugo Boss, also the group's single biggest fragrance brand. Euromonitor & Sanford Bernstein estimated sales of $593m in 2013. There are three main fragrance families: the more formal and sophisticated Boss range (fronted by brand ambassadors Gwynneth Paltrow and Ryan Reynolds), relaxed and urban Boss Orange (represented by Orlando Bloom), and funky, clubby Hugo (with Jared Leto). Close behind is Dolce & Gabbana, for which P&G secured the fragrance and cosmetics license in summer 2006. Ambassadors include Scarlett Johannson and supermodel David Gandy. Combined sales were around $477m in 2013. Lacoste fragrances have their strongest following in France and other continental European markets ($122m), while Dunhill fragrances do best in the US and Asia.

The Prestige portfolio is led by Gucci (sales of $316m in 2013), with support from Escada ($49m) and until 2015 Rochas ($42m). Other products include Anna Sui and a fragrance range branded to singer Christina Aguilera. Among more recent additions to the brand portfolio was the license to produce the James Bond 007 fragrances, launched in the second half of 2012 to tie in with the 50th anniversary of the film series and the release of Skyfall. In Europe P&G also manages a few local jewels including one with cashmere designer Laura Biagiotti (mainly in Italy, sales of $42m), Bruno Banani (in Germany, sales of $22m) and Mexx (sales of $58m). These are all grouped under the heading of lifestyle & celebrity brands. 

In summer 2013, P&G signed British designer Stella McCartney following the termination of her licensing agreement with L'Oreal. The first product, Stella, was launched the following year. It also inked a new agreement with the Alexander McQueen label, whose previous fragrance line was discontinued by L'Oreal in 2008. 

P&G's fragrance portfolio is led by seven so-called "thrust" brands, divided into two product groups of Prestige and Luxury. The Luxury portfolio is led by Hugo Boss, also the group's single biggest fragrance brand. Euromonitor & Sanford Bernstein estimated sales of $593m in 2013. There are three main fragrance families: the more formal and sophisticated Boss range (fronted by brand ambassadors Gwynneth Paltrow and Ryan Reynolds), relaxed and urban Boss Orange (represented by Orlando Bloom), and funky, clubby Hugo (with Jared Leto). Close behind is Dolce & Gabbana, for which P&G secured the fragrance and cosmetics license in summer 2006. Ambassadors include Scarlett Johannson and supermodel David Gandy. Combined sales were around $477m in 2013. Lacoste fragrances have their strongest following in France and other continental European markets ($122m), while Dunhill fragrances do best in the US and Asia.

P&G Prestige also now manages ultra-luxury skincare brand SK-II, sales of which broke through the $1bn barrier for the first time in 2012. (Euromonitor/Sanford Bernstein estimated $935m for 2013). Originally marketed in Asia, it has gradually expanded into other regions, including the US from 2004, and Europe in 2005. 

The group has pruned its portfolio since 2005 to focus on what it described as "brands with big global potential, regional star brands or potential growth engines". As a result numerous licenses have been dropped or discontinued, including Helmut Lang, Ellen Tracy, Toni & Tina, Trussardi, Charles Jourdan and Yohji Yamamoto. Old-fashioned British brand Yardley was sold in 2005 to Lornamead; long-established German favourite 4711 was sold to Maurer & Wirtz in 2006. Other licenses including Cindy Crawford, Baldessarini and Ghost were quietly surrendered between 2005 and 2010. For several years, P&G also handled US distribution of the Burberry fragrance range on behalf of Inter Parfums of Europe. That license transferred to Clarins USA during 2010. At around the same time, the Valentino license was shifted from P&G to Puig.

Several other brands have already been divested. Classic high-end fragrance Jean Patou was transferred in 2014 to Designer Parfums, which had already taken control of along with the Naomi Campbell and Ghost licenses. The Puma fragrance brand (sales of $62m in 2013) transferred to L'Oreal from Jan 2015 following the end of P&G's license. Rochas was sold to smaller group InterParfums in 2015.

Combined sales of P&G Prestige were estimated at around $2.5bn in 2013, though that figure includes SK-II. Fragrances and their associated cosmetics contribute approximately $1.7bn.

Management

Joanne Crewes, global president of P&G Prestige Products since 2011, retired at the end of 2014. Her predecessor Patrice Louvet took over control of a merged prestige, cosmetics and salon professional division. Donald Loftus retired as president & CEO of P&G Prestige Products in the US at the beginning of 2013, and was succeeded by Dennis Curran. 

In Geneva, executives include Bill Brace (VP, global market development & operations), Marco Parsiegla (general manager, global prestige products), Michel Lambert (global director, media planning & operations), Maria Carla Luini (VP & GM, global fashion brands), Jean-Paul Jansen (global marketing director & global brand operations leader), Guillaume Tardy (director, global Hugo Boss fragrances), Nikolaus Maass (global brand manager, Hugo Boss), Alex Schellenberger (commercial leader, Hugo Boss), Mary Carmen Gasco-Buisson (associate marketing director, Hugo Boss fragrances), Paolo Gialdi (commercial leader, D&G Fragrances), Sergio Arreola (marketing director, D&G fragrances), Claudia Marcocci (senior global design group manager, D&G fragrances), Jonathan Brinbaum (senior marketing group manager, Lacoste & Escada), Sandra Ekong (global brand manager, Gucci beauty), Julie Gosalvez (market business & digital leader, Hugo Boss), Melanie Montel (marketing group manager, Lacoste) and Rita Cardoso (global brand manager, Stella McCartney & Alexander McQueen).

In New York, executives include Kim Yates (SVP, marketing), Barbara Luisi (VP, sales), Linda Kessler (VP, communications) and TJ Stouder (brand director, Hugo Boss & Lacoste).

Background

Procter & Gamble's current fragrance portfolio has been accumulated gradually as a result of a series of acquisitions over several years since 1990. The group made its first moves into the beauty and cosmetics sector in the late 1980s with the acquisition of Richardson-Vicks, which added Pantene and what is now Olay to the group. Further cosmetics purchases followed, but the group's first real step into fragrance came in 1990 with the acquisition of Shulton, which controlled mass-market men's aftershave Old Spice and other products. 

Additional brands joined the group over the next few years, some as a by-product of other acquisitions. For example, German beauty company Eurocos, which P&G acquired from Revlon in 1992, managed the fragrance licenses for Hugo Boss and Laura Biagiotti as well as Ellen Betrix cosmetics. Other fragrance brands were specifically acquired, such as Giorgio Beverly Hills, acquired from Avon in 1994; famed French perfume house Jean Patou, acquired in 2001, along with its subsidiary brand Lacoste; and the Valentino license, acquired from Unilever in 2003 (but later surrendered to Puig). 

Yet although several of these acquisitions brought with them a European management team experienced in fine fragrance sales and distribution, P&G lacked confidence in the US outside of the mass-market. As a result, sales and distribution of the group's prestige fragrances in the US were outsourced in 1999 to Clarins. P&G's dilemma was solved by the acquisition of Cosmopolitan Cosmetics as part of Wella. This business, which already handled several prestige products in the US, including Gucci, had its own North American management structure. As a result the six year contract with Clarins was allowed to lapse at the end of 2005, at which point P&G regained US distribution of Giorgio, Hugo Boss, Jean Patou, Lacoste and Valentino. Cosmopolitan also brought with it the Rochas couture fashion business. This was eventually closed in 2006.

Patrice Louvet replaced Hartwig Langer as global president of P&G Prestige Products in 2009, reporting to Ed Shirley, vice chairman for global beauty. Louvet was in turn succeeded in July 2011 by Joanne Crewes.

Last full revision 1st May 2015


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