Negotiations continue for the sale of fragrance brand Caron to Rothschild family investment firm
today Sep 19, 2018
French beauty group Alès reported increased losses as it published its results for the first half of 2018. It also stated that negotiations are in progress to sell historic French fragrance brand Caron to Cattleya Finance, the private equity firm owned by Benjamin and Ariane de Rothschild. After announcing, earlier in the month, the start of exclusive negotiations with Cattleya Finance, the Alès group has now given further details on the potential Caron sale and its estimated timeline.
The Alès group, also the owner of haircare and cosmetics brands Phyto, Lierac and Jowaé, stated that the sale would allow the group to rebalance its finances in the short-term, thanks to the €28 million it indicates it would collect from the transaction.
"This potential sale is subject to the statutory communication and consultation procedure with the employee representatives of the Alès Group, with advance notice given to the employees of Parfums Caron, and could take place during the fourth quarter 2018,” the group stated in a press release.
Caron was founded in 1904 and is one of the oldest fragrance houses in France. It was bought by the Alès group at the end of the 1990s.
In the first half of 2018, sales for the Alès group fell by 10.4%, down to €108.9 million, hit by a 15.3% downturn in France and a 7.2% one outside the group’s domestic market. Early in H1, the group stopped selling to its Iranian distributors.
The group’s current operating income posted a loss of €3.4 million (compared to a loss of €1.4 million a year earlier), and net losses rose to €23.7 million, well up from €6.3 million a year earlier.
To get back on an even keel, the group has embarked on a reorganisation, notably cutting the number of employees and transferring part of its US subsidiary's business to a distributor.
In July, the Alès group announced it had obtained a moratorium on payments to its bank lenders and bondholders until October 15, in order to be able to pursue talks to renegotiate its financing terms.
FashionNetwork.com with Reuters
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