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What happened?
During its 2023 annual results conference call on Friday, L’Oréal announced that it has signed an exclusive long-term licence agreement with Miu Miu, which will see the French conglomerate handle the creation, development and distribution of luxury beauty products for the brand. It comes as the beauty giant reported a fourth-quarter sales increase of 6.9 per cent to €10.6 billion, falling below analyst expectations.
“We are now thrilled to welcome Miu Miu and unleash its outstanding potential in beauty together,” Cyril Chapuy, president of L’Oréal Luxe, said. “With its unique positioning, fuelled by limitless creativity and experimentation, Miu Miu will perfectly complement L’Oréal Luxe’s portfolio of iconic brands and reinforce our worldwide leadership in fragrances.”
“In Luxe, no one size fits all,” Chapuy said during the call with analysts and press. “The division’s ambition is to steadily upgrade the consumer experience with its unique portfolio of brands. It goes without saying that Aesop adds another jewel to the deluxe crown and we’re very happy to welcome the newcomer Miu Miu today.”
The first Miu Miu fragrances under L’Oréal Group are expected to be launched in 2025. The agreement will be effective after customary regulatory approvals.
Why does it matter?
This new agreement underscores L’Oréal’s bid to strengthen its position as a leader for luxury beauty. The Luxe division rose 4.5 per cent in fiscal 2023, compared to the previous year, and has increased investment in the sector, adding more brands to its portfolio.
Miu Miu is in good hands. It joins a number of luxury brands who already rely on the conglomerate to handle the creation and distribution of its beauty and fragrance products. The Luxe division — which consists of 25 luxury and contemporary brands such as Diesel, Yves Saint Laurent and Giorgio Armani — is an important category for L’Oréal as it looks to capitalise on the industry-wide shift to ultra-premium beauty. Its broad portfolio of brands meets the needs of luxury aspirational beauty customers. And its diverse price range — which the brand believes will help consumers make their first entry into luxury beauty as well as serve customers looking for ultra-luxury offerings — moves between €30 and €600.
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For Miu Miu, this partnership offers a chance to leverage L’Oréal’s expertise from R&D to distribution, and drive brand growth. “This new chapter will sustain the brand’s growth and help to further untap Miu Miu’s full potential in the category,” Miu Miu CEO Benedetta Petruzzo said in a statement. The French beauty giant has already established a strong relationship with the Prada Group — owner of Miu Miu — when it agreed to licence the house’s fragrance and beauty products back in 2021. Previously, Miu Miu's beauty licence was held by Coty.
L’Oréal’s bet on prestige beauty is slowly paying off. Meanwhile, its competitors, including Estée Lauder, say the category is experiencing a slowdown, particularly in Asia. Within this division, fragrances remain a key driver, with the category growing 17 per cent, led by its “star performer” Yves Saint Laurent Beauté among other fragrances by Valentino, Prada and Mugler. In skincare, ultra-luxury brand Helena Rubinstein passed the €1 billion mark. Momentum accelerated in makeup during the second half of the year, the company said, driven by couture brands. Aesop, which completed its integration last year, is “off to a good start” and is up double digits, the company said; this year, it plans to “fully exploit the potential of Aesop”, Chapuy said during the conference.
“Looking ahead to 2024 and beyond, I’m ambitious for L’Oréal Luxe and I’m extremely confident in our ambition to reinforce our leadership even further and deliver solid consistent growth,” said Chapuy. “As one of the major entry points to luxury, I’m very confident that the luxury beauty market will continue to be dynamic, whilst the global upper-middle class continues to grow.”
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