U.S. cosmetics giant Estee Lauder Companies Inc. (EL) has inked a multi-year licensing agreement with American sportswear brand, Tory Burch, thereby mentoring its way in the fragrance market.
The Aramis and Designer Fragrances, a division of Estee Lauder, will take over the exclusive worldwide license rights to produce fragrances for Tory Burch to be launched in 2013. This is Tory’s first venture into perfume business and comes after years of the beauty industry’s anticipation for a fragrance from the lifestyle brand.
The forthcoming perfumea is expected to capture the innate beauty of women and also bear the spirit of the designer and CEO Tory Burch. The companies also said that the fragrance launch is to be followed by a launch of a capsule beauty collection that is in line with the designer's vision.
Previously, Tory Burch was in talks with beauty giant Coty for partnering for its foray into the fragrance business, but it chose Estee Lauder as its guide in the beauty zone.
Estée Lauder is one of the world's leading manufacturers and marketers of quality skin care, makeup and fragrance and hair care products. The Company's products are sold in over 150 countries and territories under brand names like Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, MAC, Bobbi Brown and Tommy Hilfiger.
For Estee Lauder, the deal is a part of the company’s strategy to increase the division’s (Aramis and Designer Fragrances division) market share in America. The division has already bagged several licenses like Michael Kors and Donna Karan in America. The company acquired Zegna in July 2011, which gave it a broader reach in Europe and Asia’s men’s fashion world.
Estee Lauder also inked a multi-license agreement with Milan based fashion house Marni very recently, and thus will accompany the European fashion giant in its first foray into perfume business.
Estee Lauder posted robust results for the fiscal year 2011. The full-year 2011 earnings per share were $3.69, in line with the Zacks Consensus Estimate, and surpassed the fiscal 2010 earnings of $2.75 per share. The earnings also exceeded management’s guidance of $3.55 to $3.65 per share.
Estee Lauder, which competes with Procter & Gamble Co. (PG), holds a Zacks #3 Rank, which translates into a short-term Hold rating consistent with our Long term Neutral recommendation.
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