This week, I checked in on the spate of investments from major conglomerates into niche fragrance brands. Additionally, Gap taps Summer Fridays for its latest collab, and Black Friday data points to cautious purchasing.
Why Estée Lauder and LVMH are taking minority stakes in niche fragrance
On December 1, LVMH announced it had taken a minority stake in niche fragrance house BDK Parfums. The deal gives LVMH a foothold in the Parisian perfume brand known for hit scents like Gris Chanel. And it also aligns with similar activity from LVMH’s competitors: In November, The Estée Lauder Companies took a minority stake in the Mexican niche fragrance brand Xinú. And in February, L’Oréal made investments in niche brands Borntostandout and Amouage.
Unlike past major fragrance investments, such as Puig’s acquisition of Byredo and Estée Lauder’s buy of Le Labo, the recent deals are all minority investments rather than full-scale acquisitions. The minority structure allows niche founders to retain a degree of independence while benefiting from the backing of a major conglomerate — a valuable asset for niche perfume consumers who prioritize creative independence over mass appeal.
But the strategy also speaks to a cautious approach amid an uncertain economy and potentially slowing fragrance market.
“There is a lot of uncertainty, from a consumer perspective, from a macro perspective and from a tariff perspective,” said Wendy Nicholson, managing director in Baird’s Global Consumer Investment Banking Group. “I also think there’s a lot more skepticism about the growth in the fragrance category, specifically.”
“It’s just become impossible to scale into larger, multi-door retailers without some kind of institutional help or investment,” said Steven Wildenberg, founder and CEO of sales at creative agency Golden Meteors, whose clients include beauty and fragrance brands like Borntostandout. “People are going with the minority stakes versus acquiring because a lot of VC firms or big conglomerates have been burnt with acquisitions over the last 20 years. This is a lower-stakes way of planting their flag in a category, without having to swallow as large of a loss on that risk.”
Fragrance has maintained its status as beauty’s hottest category throughout 2025. But its rate of growth has shown signs of strain. According to market analysts Circana, prestige fragrance sales in the U.S. grew 12% in 2024; data from the first half of 2025 showed the prestige sector grew just 6%, while mass fragrance sales grew by 17%.
On Puig’s third-quarter of 2025 earnings call, CEO Marc Puig acknowledged a slowdown in fragrance despite an overall sales uptick. Like-for-like sales in its fashion and fragrance sector rose 2.8%, compared to 11% growth in Q3 2024. Swiss fragrance and flavors giant Givaudan, meanwhile, is diversifying its business beyond its core fragrance offerings.
“The world has now gotten very crowded, from a fragrance perspective,” said Nicholson. “There’s only so much room in a Sephora or an Ulta for every incremental fragrance that’s been launched.”
Even with niche perfume brands being attractive targets for investors, niche founders may risk their creative independence when selling to a major conglomerate. A minority investment can offer niche founders access to the resources of a powerful conglomerate without ceding control over their brands.
“There are a lot of people who buy from brands that they think are cool or interesting. And then the perception is that, when they take in institutional money or corporate money, it completely kills the cool, so to speak,” said Wildenberg. “[A minority stake] is a way for us to, on the brand side, maintain the cool while still getting access to the capital that we need for scaling.”
But, should these minority investments prove successful, there’s reason to believe those conglomerates may increase their ownership down the line. Estée Lauder took such a path with Deciem, taking a minority stake in the skin-care brand in 2017 before completing the acquisition in 2024.
“For [Xinú], if Estée Lauder can help expand distribution and help them benefit from the scale of the Estée Organization, then maybe after a year or two, the business grows. They can sell another stake, and then they sell the whole thing,” said Nicholson. “But they’re at a much bigger size and higher valuation than they would have been able to achieve had they just been doing it on their own.”
News to know:
- Gap unveils a collaboration with Summer Fridays. The 20-piece collection marks Summer Fridays’s first foray into apparel and features “Euphoria” star Barbie Ferreira in its campaign. The collaboration follows Gap’s recent partnerships with brands such as Sandy Liang.
- Chappell Roan is the latest ambassador for Mac. The “Pink Pony Club” singer appeared in a campaign shot by photography duo Inez and Vinoodh. The musician joins celebrities like Doja Cat and Kris Jenner who have worked with the Estée Lauder-owned cosmetics brand in recent months.
- Eos breaks into fragrance with a collection of body mists. Known for its body lotions, Eos will launch eight body mists retailing for $12.99 each on Friday. The mist launch follows the brand’s February expansion into body washes.
- Billie Eilish brings her fragrances to Sephora.com. The musician first debuted fragrance in 2021 through Ulta and launched her fifth fragrance Your Turn II in November.
Stat of the week:
Despite a surge in order quantities, average order value took a sharp dive over Black Friday and Cyber Monday. According to Duel, beauty and fashion sales saw a 62% surge in order volumes on Black Friday but a 27% drop in average order value, compared to 2024. On Cyber Monday, orders rose 73% but AOV fell 37% compared to 2024.
In the headlines:
For Gen Z, cash isn’t king. It’s a joke. How Estée Lauder and Google taught AI to sell fragrances. The 67 most stylish people of 2025.
Listen in:
On this week’s episode of the Glossy Beauty Podcast, we’re exploring what teens are hoping to receive for the holidays. Sara Spruch-Feiner speaks to 13-year-old Indy, who shares her full wishlist and the picks of members of her volleyball team, as well as Anna Andreeva, managing director of footwear, beauty and brands at Piper Sandler.
Need a Glossy recap?
Trust, treat culture and TikTok Shop: The beauty trends to watch for this holiday season. Ulta Beauty CEO shares holiday sales focus, 12.9% sales jump and a shelf shakeup to grow fragrance sales. Hero caps off a year of firsts with a holiday-themed pop-up. How top wellness brands are showing up at Art Basel Miami. From UGC to R&D: POV Beauty’s Ani Hadjinian on leveraging community for every product launch.
