France’s L’Occitane to buy beauty brand Elemis for $900m

Luxury cosmetics company L’Occitane International agreed to buy privately held has beauty and skincare brand Elemis for about $900 million (Dh3.30 billion) as it seeks to build its presence in the UK and the US.

The Hong Kong-listed company agreed to buy Elemis USA from Steiner Leisure, an international business incorporated under Bahama’s laws, and Elemis, a company incorporated in England and Wales, from private firm Nemo UK, according to a Hong Kong Stock Exchange filing yesterday.

L’Occitane, based in France, said the acquisition will help bolster the group’s growth globally and Elemis will leverage on the acquirer’s geographical presence to expand into new markets, according to Bloomberg. The buyer has a global presence in 90 countries, 3,285 retail outlets, including 1,555 stores directly operated by the group, and more than 8,500 employees, according to its website.

The purchase will be funded by L’Occitane’s cash and bank borrowings. The deal is expected to close in the first quarter of 2019, according to the filing. “This is L’Occitane’s largest acquisition since listing and a major step forward in building a group of premium beauty brands,” said Reinold Geiger, chief executive of the company.

L’Occitane, which reported €1.3 billion (Dh5.47bn) in net sales and €141m in operating profit last fiscal year, listed in Hong Kong in 2010 as it sought to expand in Asia. The company is a natural ingredients-based cosmetic products maker with origins in Provence, France.

Shares of L’Occitane have advanced 6.6 per cent this year, giving the company a market value of $2.9bn. The stock was little changed in 2018.

The news comes after cosmetics and fragrance maker Coty announced a management shake-up at the weekend, two months after the Cover Girl and Max Factor brand owner appointed a new chief executive as it grapples with supply chain issues.

The company, which handed over the reins to Pierre Laubies in November, on Friday named Luc Volatier as head of its global supply chain and Pierre-Andre Terisse as chief financial officer.

Mr Laubies was previously chief executive of coffee company JDE, which is owned by consumer goods conglomerate JAB Holding, Reuters said. JAB is the biggest shareholder of Coty.

Coty last year warned that its full-year performance would be hit by supply chain disruptions from a trucker strike in Brazil, hurricanes in the US and a warehousing issue in Germany.

L’Occitane has a global presence in 90 countries, 3,285 retail outlets, including 1,555 stores directly operated