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P&G Prestige Products was until 2016 the fine fragrance and cosmetics division of packaged goods giant Procter & Gamble. With twin headquarters in New York and Geneva, the business managed a large portfolio of well-known luxury fragrance brands, mostly under license. Key brands included 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. 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 became an increasingly major concern, and the group finally announced a complete withdrawal from high-end cosmetics and fragrance in 2014. Coty was the victor in an auction of P&G Prestige and other beauty assets and took control of the business in October 2016.
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Adbrands Weekly Update 19th May 2016: Elizabeth Arden is to take charge of the Christina Aguilera fragrance license from P&G. Aguilera was one of a handful of licensors who declined the opportunity to transfer to Coty along with the rest of the P&G fragrance business. The other major holdout is Dolce & Gabbana, who have yet to confirm the destination for their cosmetics business. [UPDATE Shiseido secured that license in July 2016]. Aguilera joins a number of other music-related celebrity licensees at Arden, including Taylor Swift, Justin Bieber, Nicki Minaj and Mariah Carey. Sales of her perfumes are estimated at around $80m a year.
Adbrands Weekly Update 14th Jan 2016: P&G secured the necessary permissions from most - but not all - the licensors of its prestige fragrances for transfer of those brands to Coty. As a result, 10 of the 12 affected licenses are clear to move across later this year: Hugo Boss, Gucci, Lacoste, Stella McCartney and Alexander McQueen as well as lesser brands Bruno Banani, Escada, Mexx, Gabriela Sabatini and James Bond. However, consent was not received from singer Christina Aguilera for the transfer of her license; nor more significantly from Dolce & Gabbana, one of the lead brands in the portfolio. To avoid any additional hold-ups to completion of the sale, those two product licenses will now remain with Procter & Gamble, subject to further negotiation.
Adbrands Weekly Update 16th Jul 2015: Procter & Gamble confirmed, as already widely rumoured, that it has agreed to sell the bulk of its prestige beauty business to rival Coty for $12.5bn. More than 40 brands will be divested, comprising CoverGirl and Max Factor cosmetics; the entire P&G Prestige fragrance portfolio including Hugo Boss, Gucci and D&G; the Clairol consumer hair colours range and the global Wella professional haircare division. Combined sales are around $5.9bn, or almost a third of the current P&G Beauty portfolio. Precise details of the deal's structure are yet to be finalised but to maximise tax benefits, it's likely that the brands will be spun out into a separate company, RMT Brands, which will itself then merge with Coty. Because of the complications inherent in such a process, completion is not expected until the second half of 2016. P&G expects to report a gain on the deal of between $5bn and $7bn. The acquisition represents a triumph for Coty, which will more than double in size to annual sales in excess of $10bn. It will be the biggest player by far in fragrances (current brands include Calvin Klein, Marc Jacobs and Adidas), #2 in salon haircare (behind L'Oreal) and #3 in colour cosmetics (it already owns Rimmel and Bourjois) behind L'Oreal and Estee Lauder.
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.
Until its sale to Coty in 2016, P&G's fragrance portfolio was led by seven so-called "thrust" brands, divided into two product groups of Prestige and Luxury. The Luxury portfolio was led by Hugo Boss, also the group's single biggest fragrance brand, produced under license from German fashion group Hugh Boss AG. 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 was Dolce & Gabbana, for which P&G secured the fragrance and cosmetics license in summer 2006. Over the years, ambassadors included Scarlett Johannson, Matthew McConaughey 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 was led by Gucci (sales of $316m in 2013). As with Boss, there is a collection of different scent families under the overall Gucci umbrella. Guilty, Bamboo, Flora and Gucci by Gucci were all laucnhed under P&G. By 2017, sales were estimated to have risen to as much as $600m for the whole portfolio. The first to emerge from new owner Coty is Gucci Bloom, introduced in 2017.
The P&G Prestige portfolio also included Escada (sales of $49m in 2013) 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 were a license to produce 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 managed 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 were 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 Prestige also managed 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 pruned its portfolio after 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 were 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.
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.
In 2015, P&G agreed to sell its entire fragrance portfolio to rival Coty. It secured the necessary permissions from most - but not all - the licensors for that transfer. The main exceptions were singer Christina Aguilera and more significantly Dolce & Gabbana, one of the lead brands in the portfolio. Separate deals were agreed to transfer Christina Aguilera to Elizabeth Arden, itself subsequently acquired by Revlon. The D&G license was acquired by Shiseido.
The only business from the old Prestige portfolio retained by P&G was skincare range SK-II, which remains a core brand within what is left of P&G's beauty business.
Combined sales of P&G Prestige were estimated at around $2.5bn in 2013, though that figure included SK-II. Fragrances and their associated cosmetics contribute approximately $1.7bn.
Joanne Crewes, global president of P&G Prestige Products since 2011, retired at the end of 2014. Her predecessor Patrice Louvet took back control of a merged prestige, cosmetics and salon professional division. However, all three of those units transferred to Coty; Louvet moved up to head P&G Beauty. 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. Following the agreed sale to Coty, Curran moved to GlaxoSmithKline. Most other marketers either stayed with P&G in different roles, transferred to Coty or left the business.
Procter & Gamble's fragrance portfolio was 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 15th March 2017
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