Thursday, June 03, 2010

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Jean Paul Gaultier to Launch Home Furnishings
PARIS — Jean Paul Gaultier is poised to get back into home furnishings, with a collaboration with upscale French furniture brand Roche Bobois due to be unveiled in full over the coming months.

Ungaro Taps Giles Deacon
PARIS — Emanuel Ungaro is hoping it will be sixth-time lucky. The French fashion house, which has seen a revolving door of designers since the retirement of its chief designer Estrella Arch, presumably due to problems with Lindsay Lohan, the brand's briefly employed and much maligned artistic adviser.

ALL FOR ADLER: Jonathan Adler followers converged on the Seven For All Mankind flagship in New York’s SoHo on Wednesday evening to mark the summer launch of Adler’s cobranded range of jeans and sportswear with the denim maker. “I love the colors Jonathan uses and wanted to see the collection,” said Dylan Lauren, whose Dylan’s Candy Bar just signed a new license for a collection of stationery and partyware with Lifeguard Press — the company that makes similar products for Adler. Simon Doonan of Barneys New York, Adler’s husband and biggest fan, was sporting white corduroys from the new line. “I’m glad they have a bit of stretch because I have very muscular legs,” he mused. Had he given Adler any design tips for the denim line? “No, I’m hopeless at things like that because I come up with very uncommercial ideas, like putting lamp-shade fringe on the bottom.”
Also on hand were Abigail Breslin, Jamie-Lynn Sigler, “Real Housewife” Kelly Bensimon, model Sessilee Lopez, and Penn Badgley and Matthew Settle of “Gossip Girl.”
Asked if he had pulled any strings with Doonan to try to get the line into Barneys — the store is not carrying it — Adler demurred. “We’re too busy playing Ping-Pong and watching reality shows to talk business with each other,” he noted. “I like the really grim reality shows, like ‘Intervention’ and ‘Hoarders.’”

MAC Does Disney
PAGING MICKEY MOUSE: MAC Cosmetics is teaming up with Disney to create a limited edition color collection, intended to launch globally in late September in all MAC locations. The products will feature four Disney characters, on which the brand is keeping mum at the moment — although with a collection name of Venomous Villains, it is assumed that we’re not talking Donald Duck and Minnie Mouse here. Lipstick, powder, lip gloss and blush shades will be sold, ranging in price from $12 to $29.50.

Estee Lauder to Buy Smashbox Cosmetics
The Estée Lauder Cos. Inc. has gone Hollywood, nabbing the photo-studio-born makeup company Smashbox Beauty Cosmetics Inc. in a bid to move deeper into the fast-growing, alternative retail channel and gain entrée into the digital media space.
Lauder said Monday it has signed a definitive agreement to buy the Los Angeles-based makeup brand, founded in 1996 by Dean and Davis Factor, the great-grandsons of legendary Hollywood makeup artist Max Factor. The acquisition includes a minority stake in Smashbox Studios, the Los Angeles photo facility started by the Factor brothers in 1991. The deal is expected to close in July, subject to certain conditions, including regulatory approval.
The purchase price was not disclosed, but sources estimated it was between $200 million and $300 million. WWD first reported on April 23 that Lauder may have been in talks to buy Smashbox.
“We like the brand and its photo-studio inspired, Hollywood positioning,” Lauder’s president and chief executive officer Fabrizio Freda told WWD during a call from Los Angeles Monday morning. “Smashbox operates in a selling environment that is of big interest to us, specialty retail, where we want to continue to grow.”
North American department stores account for 30 percent of Lauder’s total revenue of $7.3 billion in fiscal 2009.
Freda added that Smashbox Studios, complete with its digital capabilities, will benefit the entire Lauder company. The deal marks the first acquisition since Freda assumed the ceo post in July. Leonard Lauder, chairman emeritus of the company, could not be reached for comment, but it is known he is a strong supporter of the acquisition.
Smashbox generates about $80 million in wholesale revenue and $140 million in retail sales, according to a source with knowledge of the company’s finances. In 2006, private-equity firm TSG Consumer Partners acquired a minority, noncontrolling stake in Smashbox.
“We and the Factors are pleased that the brand will now reside within the Lauder company,” said Hadley Mullin, a managing director at TSG. “We are confident that Lauder will be a tremendous steward.”
Mullin said TSG and Smashbox have been in serious talks with Lauder about a potential acquisition for several months, and that the brand has fielded inquiries from interested buyers for a number of years.
About a year ago, Smashbox tapped Deutsche Bank to act as a financial adviser as it considered strategic alternatives, including the sale of the company.
Smashbox’s prowess in fast-growing retail channels, particularly TV shopping, and its presence in open-sell store formats, including Ulta, Sephora and Macy’s Impulse Beauty concept, offer Lauder a stronger presence in alternative channels, particularly as shoppers continue to shift away from department stores. It also rounds out Lauder’s holding of venerable makeup artistry brands, which include MAC Cosmetics and Bobbi Brown.
Smashbox is sold throughout North America as well as some 60 countries worldwide, said Dean Factor. “We’ve grown to a point where we feel that the Lauder company can take us to the next level,” said Factor. Smashbox will continue to operate out of its Los Angeles office, and Dean Factor, co-founder and ceo; Davis Factor, co-founder, chief creative officer and celebrity photographer, and Budd Taylor, president, are expected to play key roles in the integration and the brand’s future plans.
Caris & Co. analyst Linda Bolton Weiser said, “[Lauder] has a history of taking something relatively small and expanding sales.” She added, “They’ve made MAC and Bobbi Brown hugely successful.” Bolton Weiser said Smashbox is Lauder’s largest acquisition of a brand that is dominant outside of department stores.
The deal broadens Lauder’s presence on the airwaves of the largest TV retailer, QVC, where Smashbox consistently ranks among the top 10 beauty brands. Smashbox also is sold on QVC in the U.K. and Germany.
Allen Burke, director of merchandising at QVC, where Smashbox premiered in 1998, credited Dean Factor’s vision for taking a chance on television home shopping. “He comes across as casual California. He is really a very bright business guy,” said Burke. “He was willing to listen to where we were going and what we were doing, and it made sense to him, and he clearly charted his own path. To be fair, it was a time when there was a lot of makeup artist brands emerging and the field got cluttered quickly, perhaps that was part of the attraction.”
Smashbox’s move to QVC was auspicious and the home shopping channel has been an important platform for the brand’s products. Halo Hydrating Perfecting Powder, which boasts the benefits of skin care ingredients, is a case in point. QVC put the product, priced at roughly $72, on its Web site three months before it was presented on air and had a year-long exclusive. To date, more than 144,000 units have been ordered via QVC.
Currently, Lauder sells Bobbi Brown, Origins, Clinique and the hair care line Ojon on QVC. At this point, none of the Lauder brands are sold on QVC’s main rival, HSN.
Smashbox is best known for camera-friendly products such as Photo Finish primer and Photo Op Under Eye Brightener. Freda said its positioning as a photo-studio inspired, Hollywood brand gives Smashbox a unique positioning within the Lauder brand portfolio, which includes makeup artist-created lines MAC Cosmetics, with its strong fashion bent, and Bobbi Brown, which is tailored for everyday women. Also, because Smashbox largely lives in different retail channels from MAC and Bobbi Brown, Freda said he does not anticipate the brand to cannibalize sales of the other two or the remaining 24 brands in the group’s portfolio.
John Demsey, Lauder group president responsible for the MAC, Bobbi Brown, Estée Lauder, Tom Ford, Prescriptives, Jo Malone and La Mer brands, will oversee Smashbox after the close of the deal. “This is a meeting of like-minded organizations,” he said, noting they are both family oriented and focused on field service and selective distribution. Demsey said, “We come here with tremendous respect for what [Smashbox] has accomplished. Smashbox offers a fresh new way of looking at specialty retail and at video and creative production.”
William Lauder, executive chairman of Lauder, stated, “One of the enduring strengths of the Estée Lauder Cos. is our ability to identify brands with unique positioning and nurture those brands to accelerate their momentum and realize their full growth potential. The addition of Smashbox to our portfolio continues this 64-year legacy. We expect that with our strong cultural synergies and shared appreciation for family heritage, this will be a wonderful union.”
At first glance, Smashbox doesn’t seem to neatly fit into Lauder’s strategic priorities — as outlined by Freda earlier this year — of skin care and Asia. But last month, Freda clarified to WWD, “Skin care and Asia are our priorities, but we also will look more broadly.” He emphasized, “We’ve always said [mergers and acquisitions] are part of our strategy,” adding the company will pursue opportunities that widen its reach by category, distribution channel and in geographic scope.
As one analyst declared, “Lauder can’t ignore open sell anymore.”
The news of Lauder’s acquisition of Smashbox did not shock retailers, although some expressed modest surprise. They are curious to see how Lauder will grow the brand.
Robin Coe-Hutshing, founder and creative director of Studio BeautyMix, which houses a Smashbox Pro Studio, said, “I knew Lauder would never be going the indie route again with smaller brands. I don’t see them nurturing small brands to the finish line any more.” She added, “It has to be something that can really go to the distance in the Lauder scheme of bigness and this certainly fits the bill. I think it complements their other brands. It is not particularly redundant in terms of the mission statement of the brand.”
Burke of QVC gave the union his blessing, saying, “We love Smashbox. We are so grateful to them for their commitment to us for all of these years, and we are very much in awe of the Lauder corporation and anxious to be a greater partner to them. It is good thing as far as we are concerned.”
As mergers and acquisition activity has begun to thaw this spring, multichannel beauty brands have been in high demand. Earlier this year, Shiseido Co. Ltd. acquired mineral makeup company Bare Escentuals Inc. for $1.7 billion, giving the Japanese cosmetics giant a stronger foothold across all retail channels, TV shopping and open sell included.

Burton to Be Named Creative Director at McQueen
LONDON — Sarah Burton, the late Alexander McQueen’s trusted colleague, is set to be named creative director of the London-based fashion house.

Jean Paul Gaultier to Exit Hermès
Hermès is saying adieu to Jean Paul Gaultier and bonjour to Christophe Lemaire.
The French luxury goods house said Wednesday it was parting ways with Gaultier, its artistic director.

Coach's Poppy Scent to Launch in Summer
There’s a new girl in the Coach fragrance family — and she’s helping to usher the brand’s scent portfolio into a new era of its distribution strategy this summer.

The Olsens Branch Into Eyewear
Mary-Kate and Ashley Olsen are extending their reach into eyewear.
Elizabeth and James, the Olsens’ contemporary sportswear line, will launch a sunglass collection in November designed...

SHUTTERING: Jasmine di Milo, the clothing label designed and owned by Jasmine Al Fayed, is closing. An industry source in London said that Al Fayed, a daughter of Mohamed Al Fayed, the former owner of Harrods, wanted to leave the fashion business and pursue other interests and challenges. A spokeswoman for the company did not return phone calls at press time. The source said the business would be wound down in an orderly fashion and the company would honor all of its contractual commitments, including delivery of the fall collection. The label, which had sales last year of 5.5 million pounds, or $8 million, is stocked at Harrods, as well as at Maxfield, Intermix, Le Bon Marché in Paris, Liberty of London and Luisa via Roma in Florence. Al Fayed unveiled the label, which is known both for its figure-hugging silhouettes and draping, on the trade show circuit in 2005 and made her runway debut in March 2006 in Paris at the Ritz, another one of her father’s properties.

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