EXCLUSIVE: Parfums de Marly and Initio Parfums Privés Are Acquired by Advent International
PARIS — Two hot niche fragrance brands — Parfums de Marly and Initio Parfums Privés — have been snapped up by Advent International, which took a majority stake in the labels.
Financial terms of the transaction were not disclosed, but industry sources estimate that the deal was valued at more than $700 million.
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Parfums de Marly and Initio have been on steep growth trajectories, together registering retail sales of $366 million last year, and the new financial backing is meant to help bolster that.
“The group has grown rapidly to become a leading niche perfumery house in the attractive niche luxury fragrance segment, which represents the fastest-growth area within the sizable [approximately] $60 billion global fragrance market, and benefits from high levels of customer loyalty and resilience,” Advent said in a statement.
Investors have demonstrated keen interest in the niche perfume category as it continues to grow rapidly within the prestige fragrance segment, which has taken off strongly again since the coronavirus pandemic took hold.
“It’s very much of a continuity plan that we are going through,” said Julien Sausset, chief executive officer of Parfums de Marly and Initio, of the deal with Advent. “It’s a real partnership approach.”
Sausset said Advent plans to maintain both brands’ DNA.
“They have a very international, integrated approach as private equity, which has experience in helping brands to upgrade and to elevate their leadership [position], but also with a real continuity plan with the existing distributors, suppliers and teams,” Sausset said. “It’s really what we were after.”
Julien Sprecher launched Parfums de Marly and Initio’s parent company, the Sprecher Berrier Group of Companies, then served as SBGC chairman and creative director to Parfums de Marly. The executive remains in both roles now and is a significant minority investor in the business, as well as the sole co-investor alongside Advent.
SBGC’s management team is to stay in place, too.
SBGC executives had been speaking to investors for a few months, but explained in a WWD interview published on March 27 that there was no rush for a deal, as they were seeking the right partner to accompany Sprecher’s vision.
Co-exclusive advisers to Parfums de Marly and Initio were BNP Paribas and Jefferies.
In 2009, Sprecher started the Parfums de Marly brand nodding to 18th-century France. He gleaned inspiration from Louis XV, his passion for horses and the Marly castle dedicated to horses’ well-being.
The brand in 2022 posted retail sales of $280 million, with growth driven by business in the U.S. and Asia, as well as new boutique openings.
Parfums de Marly is sold through about 1,400 sales points worldwide. Last year, it was the fastest-moving niche perfume brand in U.S. department stores, with 73 percent growth.
The America’s business generated half of Parfums de Marly’s total sales and gained 50 percent against 2021. The brand’s activity was also powered by its performance in Asia, where sales rose 60 percent.
The perfume label’s largest boutique, a worldwide flagship measuring 1,940 square feet, recently opened in Beverly Hills. A branded store debuted in London’s Covent Garden last December, and a store in Shanghai and in Beijing are expected in September,
Meanwhile, Parfums de Marly’s Paris flagship is being moved to Rue Saint-Honoré from Rue Cambon.
Parfums de Marly’s fragrance bestseller is Delina, followed by Valaya.
Between March and May, Parfums de Marly ran a campaign in China with actor-influencer Theo Zhu. That spot garnered 7 million views in its first two days.
The brand is recruiting new employees and expects to open an office in Asia, probably in Hong Kong, by early 2024.
Building brand awareness remains the top priority for Parfums de Marly in coming years, and to do that upping investment in digital and pop-ups are envisioned.
For its current fiscal year ending March 2024, Parfums de Marly is targeting retail sales of $375 million. Executives’ ultimate goal is for it to lead in the niche fragrance category.
Initio, a unisex brand, was launched in 2015 exclusively in Bergdorf Goodman in the U.S. Its first flagship was inaugurated on Paris’ Rue Saint-Honoré in May 2022, with a design conceived around the concept of a speakeasy. The brand is now sold in 900 doors and last year made retail sales of $86 million. For its current fiscal year ending March 2024, Initio is expected to ring up $125 million in retail sales.
The idea is for a branded boutique to open in London and in New York.
Initio this year launched a scent called Paragon, which was introduced in the U.S. exclusively at Neiman Marcus and is being rolled out elsewhere.
Brands such as Parfums de Marly and Initio are helping to keep the prestige fragrance category percolating. It was flat to down in mature markets before the health crisis, but started to fly again during and after it, driven in part by emerging markets such as China.
Between 2021 and 2022, the premium fragrance market grew 9.1 percent to $57.36 billion and is forecast to rise another 7.9 percent between 2022 and 2023, and 6.7 percent between 2023 and 2024, according to Euromonitor International.
It’s trickier to track niche fragrance sales, as there’s no clear-cut definition of what constitutes “niche.” When it first came into the lexicon for fragrance, the term encompassed indie start-ups, but a number of those have morphed into multimillion-dollar businesses.
Industry experts feel niche scents are fueling the perfume market’s growth.
Euromonitor’s statistics on “super premium” fragrances, last year with sales of $21.01 billion, estimate that the segment’s growth will be 5.7 percent between this year and 2024, and 6.7 percent between 2024 and 2025.
Private equity and strategic investors are interested in niche fragrance brands, since they’ve been alluring to the increasing number of consumers on a quest for olfactive individuality. Once more, it is difficult to build a brand from scratch today, and so most multinationals are keen to acquire them instead.
A landmark deal took place last year in May, when Puig acquired Swedish fragrance and lifestyle brand Byredo, valuing the label at $1 billion.
Investments — of all sizes — in the niche perfumery space have continued at a rapid clip thereafter. This month, a majority stake in Sabé Masson, which began with solid fragrances, was sold to Boris Gratini et Hélène Ortola.
In May, Juliette Has a Gun raised a new round of funding with Cathay Capital, as did Perfumer H, with Natura & Co.’s venture capital fund Fable Investments.
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