Dolce & Gabbana’s Takes Perfume And Makeup Business In-House

Dolce & Gabbana made a bold move: it has set up a new company to directly manage the development, production, and sale of its perfumes and cosmetics.

Italian luxury group Dolce & Gabbana has set up a new company to directly manage the manufacturing and distribution of its fragrance and make-up products, a €1 billion business, CEO Alfonso Dolce announced.

The move marks a transition for Dolce & Gabbana’s beauty business from licensed to direct operations.

"We are thinking of a business model which could see tie-ups and partnerships with our producers," Dolce told Corriere Della Sera's L'Economia financial weekly.

The launch of the new company follows the conclusion of its licensing agreement with Shiseido in December 2021 and the new company will start with a capital of between 200-250 million euros, through self-financing and "support from the banking system", said the CEO.

Dolce & Gabbana’s New Business - A Bold Move

This bold, strategic new approach goes against the grain of luxury peers like Burberry, Valentino, Salvatore Ferragamo, Prada, Christian Louboutin, Chloé, and Moncler, which have struck beauty licensing agreements with groups like L'Oréal, Coty, Puig, and Interparfums in recent years, in return for a percentage of annual sales.

The new company, Dolce & Gabbana Beauty,  will employ about 130-150 people in Italy by March 2023, and another 100-120 abroad.

Alfonso Dolce will be president, and former LVMH CEO Gianluca Toniolo will be the new CEO.

According to Vogue, Dolce & Gabbana has created over 100 fragrances, including its bestselling Light Blue and The One scents. In 2009 the brand expanded into makeup, selling £30 lipsticks and £48 blushes at department stores. Shiseido has manufactured and sold Dolce & Gabbana branded perfume and cosmetics since 2016.

In April 2021, as part of Shiseido’s cost-cutting measures following the Covid-19 pandemic, the two companies agreed to bring a partial end to their licensing agreement. Shiseido will continue to produce Dolce & Gabbana beauty products worldwide until the end of 2022.

Experts said for Vogue that Dolce & Gabbana’s move of taking in-house the manufacturing and sale of its perfumes and makeup products could pave a new route for brands as they take closer control of their retail and distribution channels, which will lead to strong relationships with customers and higher margins.

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