L Capital Asia , the private equity fund backed by luxury fashion group LVMH (Louis Vuitton Moët Hennessy), has acquired a minority stake in China-based Marubi Holdings Group. The amount invested has not been made public at the time of writing, but is a significant investment, it has been reported. The private equity fund has been very active over the past year with acquisitions, however this is the first the Singapore-based fund considered in the cosmetics sector. The group produces the Marubi line of cosmetics, which has experienced high growth, according to a news report by Women’s Wear Daily. The management is very optimistic about future growth. According to a report by China’s Jing Daily, LVMH reported at a press conference that it planned to propel Marubi into the global spotlight with a possible Dior partnership and Sephora distribution. Not only would this produce major profits for the companies involved, but it may spark both the domestic and global rise of Chinese beauty brands as major competitors to U.S. and European market leaders, wrote Jing Daily, an online site dedicated the business of luxury goods and services in China. According to the deal, L Capital will become Marubi’s second largest owner. The fund will initiate strategic cooperation with Marubi in product development, design, advertising, public relations, marketing, retail management, team building, global marketing, and M&A. Jing Daily reported that many industry insiders have speculated that the fund will hold 49% equity share of the cosmetics brand, with an investment of $100m. L Capital Asia was set up in 2009 to capitalise on the high consumption growth in Asia, leveraging upon LVMH’s experience and resources in Asia. L Capital Asia typically takes minority stakes in portfolio companies within the aspirational segment, and has a pre-defined exit objective following an investment horizon of approximately four to five years. On the other hand, LVMH typically takes majority stakes in companies in the luxury end of the market, with a longer term view.
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LVMH finds beauty in strategic cosmetics deal
Jul 29, 2013 • Katherine Steiner-Dicks
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