Coty extends Marc Jacobs Beauty licence for 40 more years

Coty has extended its Marc Jacobs Beauty licence for a further 40 years, securing what it calls one of the core brands in its prestige portfolio. The extension is agreed with WHP Global and G-III Apparel Group, which co-own the Marc Jacobs brand.

The four-decade arrangement will let Coty accelerate the global growth of Marc Jacobs Beauty across categories and markets, the company said. The beauty group first partnered with the American fashion house in 2003, a relationship now running for more than two decades.

Marc Jacobs is the New York fashion label founded by designer Marc Jacobs in 1984. Under Coty the brand has established several fragrance pillars, including Daisy, Daisy Wild and Perfect. Those scents now rank within the top ten to fifteen prestige female fragrances in four markets.

That ranking holds across the United States, the United Kingdom, Canada and Australia. The figures give Coty a durable block of prestige fragrance sales whose growth it can now plan against with confidence, rather than against the short cycles a nearer licence expiry would demand.

The extension comes months after Coty led the revival of the discontinued make-up line Marc Jacobs Beauty this year. The company says the relaunch has had an outstanding start and is already exceeding its targets. The collection launched on 28 May, built around a theme it calls joyride sensoriality.

That theme plays out in surprising textures, tactile finishes, bold colours and formulas designed to be played with. The make-up brand's eyeliners and eyeshadows are within the top five at Sephora in the United States, a detail Coty is treating as proof the line has landed.

The line is also among the top twenty make-up brands at Sephora in the United Kingdom and in Australia and New Zealand. That climb follows years in which the make-up line had been discontinued entirely, before Coty brought it back this spring.

What the executives said

Markus Strobel, Coty's executive chairman and interim chief executive, said Marc Jacobs is one of the great creative names in fashion, adding that the partners are proud of what they have built together over more than two decades.

Strobel called the extension "a powerful testament to Coty's position as a partner of choice for the world's leading luxury fashion and lifestyle brands". He added that the company looks forward to building on the partnership and shaping the next chapter of Marc Jacobs Beauty.

Yehuda Shmidman, founder, chairman and chief executive of WHP Global, said Marc Jacobs has tremendous momentum and opportunity ahead. He said beauty matters to how consumers connect with the brand, and that Coty has been instrumental in building that side of the business.

Coty built the fragrance operation and relaunched Marc Jacobs Beauty, Shmidman added. He said WHP Global looks forward to continuing the partnership and unlocking new opportunities for Marc Jacobs, without specifying what those new opportunities might be in the near term.

What this changes

The deal locks Coty into a brand we have covered as it moved through new ownership. Marc Jacobs named John Wattiker, a near-fifteen-year Hearst Magazines veteran who began his career at JP Morgan and Deutsche Bank, as chief marketing officer weeks after its $925 million sale to WHP Global and G-III closed.

That sale completed the brand's move under the WHP and G-III umbrella. Coty's long extension means the beauty side of the business stays put even as the wider label changed hands, giving the fragrances and make-up a continuity the fashion house itself did not keep.

We have also covered Marc Jacobs handing its Greater China growth to I.T Group with 280 points of sale. Against that push into Asia, the beauty extension becomes a second pillar of the brand's structure: retail and cosmetics both anchored by long-term partners.

Coty did not disclose the financial terms of the extension, leaving the value of the arrangement to be read from the shelf rankings the company volunteered. The 40-year term signals how central Marc Jacobs has become to Coty's prestige division.

For Coty's interim leadership under Strobel, the deal removes one expiry risk from a portfolio the group is rebuilding. The relaunch exceeding targets gives the make-up line a foothold, and the extension gives both partners four more decades to grow it.

What comes next is the make-up brand's expansion into the categories and markets Coty says the licence lets it accelerate. The company identified no specific launch or market as the first target in announcing the extension.

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Image: Coty