It has been hard not to notice more and more instances of luxury fashion brands extending their reach to the beauty sector in recent times. This begs the question: should your fashion business follow suit? The answer is complex and can very much depend on your current corporate trajectory.
In October 2023, the French-based Kering — the luxury goods purveyor with the celebrated names Gucci, Balenciaga, and Alexander McQueen under its wing — acquired Creed, a fragrance brand with a history dating as far back as 1760.
Similarly, last April saw the Estée Lauder Companies purchase Tom Ford, with these two brands having already long partnered in beauty since 2005.
Why have more fashion houses started embracing beauty?
Many opinions on this subject were voiced at the online publication Beauty Independent’s Dealmaker Summit EU/UK 2023 held in December. The trade show took place in London, where we have based Skywire London, our marketing agency for luxury brands.
Speaking at the two-day event, Sandra Nait-Amer — managing director of the Paris-headquartered bank Rothschild & Co — observed to attendees that many fashion companies had recently orchestrated a “complete shift of strategy”.
This change, she added, was prompted by “the realisation that there is a big business to be made within beauty”. She pointed out that beauty gave businesses access to a dynamic and large-scale global market and was not driven by the sales cycles often seen in fashion.
Have moves into beauty actually worked out for fashion brands?
It is easy to see instances where they indeed have. Nait-Amer noted: “When you look at brands like Chanel or Dior, 40% of the brand sales are from fragrance and beauty.”
Nonetheless, one key factor is exactly how the shift into beauty is made. Nait-Amar acknowledged that as luxury fashion brands take “a lot of time to build”, there is considerable sense in creating a beauty arm afresh under an existing brand, as opposed to acquiring and scaling another fashion house.
In heeding this advice, your own fashion business could take inspiration from the Swiss luxury titan Richemont’s recent creation of a perfume and beauty division. You may also recall the Italian-based Dolce & Gabbana internalising its beauty activities via Dolce & Gabbana Beauty in 2022.
Should your fashion business start taking its own steps into beauty?
Nait-Amar enthused that while fashion brands would previously “only see the beauty potential in launching their own fragrance under the same name… now you can really build a whole beauty business that’s worth billions, beyond just fragrance.”
Still, jumping into beauty remains the sport of kings — what Nait-Amar called the “mega luxury brands”. It could be argued that smaller, lesser-established fashion companies would be better served by focusing on their core business.
For such firms, one major stumbling block is that stretching into beauty would entail a high level of investment that may be impractical for a company to undertake during the earlier stages of its growth journey.
Here at Skywire London, we are proud to be a marketing agency for luxury brands that are looking to make the most of their current assets in support of their growth ambitions over the short, medium, and long term. To enquire about any of our specialist services, please email [email protected]today.