The new company is a partnership between Dilesh Mehta, CEO of Designer Parfums, and Tony Bajaj, the CEO of LUXE Brands.
Designer Parfums and LUXE Brands handle fine fragrance and beauty brands, such as the House of Jean Patou. And LUXE, in particular, is looking ahead to fall, when that company will launch a fragrance with pop star Ariana Grande.
Both businesses are moving to grow their beauty industry portfolios, a strategy that’s in contrast to the reorganization underway at P&G. “The company is currently in the middle of a significant restructuring that will see up to 100 brands culled from the portfolio,” reported Cosmetics Design earlier this year.
By streamlining its personal care portfolio and structuring its beauty business around profitable brands, such as Pantene and Olay, P&G hopes to minimize declines in sales and revenue.
Easy come, easy go
P&G acquired the hair care brand in 2008 for just over $400m from the private equity firm Catterton Partners. At the time the company saw Fekkai as a high-margin subsidiary that could be leveraged to help protect P&G profits, despite falling consumer demand for personal care items and increasing supply costs.
Fekkai hair care is sold at the eponymous salons as well as at retailer locations, including Ulta, Bluemercury (which was recently acquired by Macy’s), and Henri Bendel.
Terms of the Fekkai Brands, LLC. deal ensure that Frédéric Fekkai, the man, maintains a prominent role within the company: “Mr. Fekkai retains his role as adviser and brand architect at the flagship salon on 5th Avenue in New York,” states a media release announcing the sale.
Hair salon employees will also be staying on. “Approximately 225 people are currently employed in the salon business; they are expected to transfer to the newly formed entity.”
Indeed, this “latest sale indicates P&G’s growing detachment with the beauty business, which includes skin care and makeup, hair care, and fragrances segments,” observes Trefis.com.
But, as the saying goes, one man’s trash is another man’s treasure. "We are excited to be working with the extraordinary talent of Frédéric Fekkai and the Fekkai brand to optimize and further develop his brand of world class and innovative hair care products," Mehta says.