The fashion duo has signed a new fragrance license with Procter & Gamble Prestige Products, ending drawn-out negotiations and nearly two years of speculation.
According to industry sources, P&G beat other top-flight competitors, which reportedly included L’Oréal and Estée Lauder. While the terms of the deal were not disclosed, market sources said the price tag was at least 100 million euros up front, or $120 million, and a 10 % royalty agreement.
“We want the Dolce & Gabbana fragrance house to become the [number] -three or -four player in the world. That’s the objective. It’s ambitious, but the platform is clearly there also because
the strength of the fashion house is unprecedented,” said Hartwig Langer, president of P&G prestige products.
The production and distribution of Dolce & Gabbana’s fragrances will pass to P&G on July 1, ending the Italian brand’s historic 15-year license with Euroitalia. Riding the wave of Dolce & Gabbana’s fashion success, Euroitalia built a robust fragrance business for the fashion house with annual wholesale sales in excess of 200 million euros, or $240.8 million at current exchange, according to Dolce & Gabbana’s general affairs director, Cristiana Ruella.
While Langer shied from giving a time frame for sales growth, Markus Strobel, general manager at P&G prestige products, is confident they will double the brand’s wholesale volume in the next five years. Plans include launching three new fragrances in the first two years and eventually developing a makeup line.
On the retail front, the plan is to secure more exposure within strategic doors rather than increase the number of sales points.
For the fiscal year ended March 31, Dolce & Gabbana’s consolidated revenue, which excludes that of licensees, totaled 686.4 million euros, or $826.5 million.