Fashion house Prada appoints L’Oreal to run its luxury beauty products amid sales decline in China
- Teaming up with L’Oreal could be seen as a move by Hong Kong-listed Prada to target China’s fast-growing luxury beauty market
- Prada posted a 2 per cent drop in sales in China in the first half of this year
Cosmetics giant L’Oreal will develop Prada Group’s fragrance business, in the first step of a licensing agreement to run the Italian fashion house’s luxury beauty products.
Starting January 1, the parent company of Maybelline, Kiehl’s and Urban Decay will be in charge of creating, developing and distributing Prada’s high-end beauty products, according to an announcement to the Hong Kong stock exchange on Thursday.
It comes after Hong Kong-listed Prada decided not to renew its current perfume licence held by Puig since 2003.
In May, Italian designer Valentino also ended its contract with Puig to work with L’Oreal.
In an email to the Post, Prada, which owns brands including Miu Miu and Church’s, said the deal will include “a variety” of new projects aside from fragrances, without giving further detail.
“We thought it was a good opportunity to select a new partner, also considering the possibility to develop new projects that today we are not ready to disclose,” it said. “We chose L’Oreal because it’s the leading company in the beauty sector and we believe it will help us to further exploit our brand’s potential.”
Partnering with L’Oreal would also help the brand “reach even more audiences around the world”, said Patrizio Bertelli, chief executive officer of Prada, in a press release.
The partnership comes at a time of declining sales for Prada in China, a key market, while L’Oreal is enjoying growth in the country’s high-end beauty sector. As such, teaming up with L’Oreal could be seen as a move by Prada to target China’s luxury beauty market, which is on course to account for over a fifth of global market share in the next five years, according to Euromonitor.