U.S.cosmetics giant Estée Lauder Companies Inc. (EL) recently inked a definitive agreement to take over high-end fragrance and lifestyle brand Le Labo (The Lab) to strengthen its fragrance category. Although the terms of the deal were not disclosed, the company confirmed that it will close in Nov 2014.
Le Labohas offices in New York and London and makes selective assortment of fragrances, body care products and candles, as well as limited-edition “City Exclusive” perfumes. The company sells them through its official website, prestige department outlets and freestanding stores across New York, London, Paris, Los Angeles, San Francisco, Tokyo and Hong Kong.
Post acquisition, Le Labo will be managed by The Estée Lauder Companies’ Group President, John Demsey who also overlooks operations of Estée Lauder, M·A·C, Tom Ford, Prescriptives, Bobbi Brown, Jo Malone, La Mer, Bumble and bumble, Smashbox and Aramis & Designer Fragrances.
With the takeover, Estée Lauder will gain the loyal customer base of Le Labo. The product portfolio of Le Labo perfectly complements Estée Lauder’s prestige brand portfolio.
BNP Paribas became the financial advisor to Estée Lauder and Lowenstein Sandler LLP and Wragge, Lawrence, Graham & Co. served as legal counsel for the deal.
Estée Lauder is one of the world's leading manufacturers and marketers of quality skin care, makeup and fragrance and hair care products that are sold in over 150 countries. The company has been consistently driving decent earnings on the back of product innovation and strategic initiatives.
Estée Lauder currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks to consider in the retail industry include V.F. Corporation (VFC), Perry Ellis International Inc. (PERY) and Gildan Activewear Inc. (GIL). All these stocks carry a Zacks Rank #2 (Buy).