Gucci and P&G Beauty join forces for fragrance alliance
The agreements sees end of the legal dispute between German-based
Wella, now owned by Procter and Gamble, and Gucci over a previous
agreement that lasted 25 years, expired in 2003 but is said to have
been silently renewed.
The acquisition of Wella by P&G in 2003 is reported to have
prompted PPR (Pinault-Printemps-Redoute), the owner of Gucci, to try to
regain the rights to the Gucci name, whose fragrances generate
wholesale revenues of approximately €180m a year.
A PPR source quoted by French daily newspaper Le Figaro said that
PPR tried everything to get its perfumes back but the contract with
Wella was very strong and difficult to break.
The legal wrangling has now come to an end with the announcement
that a new agreement between Gucci and P&G Beauty, the second
largest player in the perfume market behind L'Oreal. A joint statement
from the two companies said: "The existing agreement between Gucci and
Wella/Cosmopolitan Cosmetics (acquired by Procter and Gamble in 2003)
is therefore considered expired."
No financial details of the agreement have been released but Mark
Lee, president and CEA of Gucci said: "The new licence with Procter and
Gamble is an opportunity to develop the great untapped potential of the
fragrance sector fro Gucci. We enthusiastically begin what we expect
will be a long term successful relationship in this category."
Hartwig Langer, president of P&G Prestige Products said that the
licence was perfectly in line with P&G's corporate strategy to
develop faster-growing, higher margin, more asset efficient businesses.
"This is going to be a long term relationship," said Langer. "We are
eager to learn from the distinct brand positioning and strong heritage
of Gucci, creating together new fragrances which fulfil the dreams and
desires of men and women all over the world."
P&G Beauty products already include the likes of Max Factor,
Hugo Boss, Head and Shoulders, Lacoste, Dolce and Gabbana, and Cover
Girl, and reported sales of over $19bn (€14.9bn) globally for 2004/05.