In May 2022, L’Oréal was all but expected to acquire Swedish niche fragrance brand Byredo. And Byredo did fall under new ownership that month, just not into the hands of L’Oréal — Spanish conglomerate Puig instead snapped up a majority stake in the perfume pioneer for a reported €1 billion ($1.07 billion).
Despite losing out on Byredo, L’Oréal has not given up on the niche fragrance market: The conglomerate kicked off 2025 with a series of major investments in the space. In early February, L’Oréal announced it had acquired a minority stake in Amouage, the luxury Omani fragrance brand established in 1983. The following week, Bold, L’Oréal’s venture capital arm, announced an investment in Borntostandout, a Korean fragrance house founded in 2022. Those deals followed the French conglomerate’s 2024 investment in Chinese perfume brand To Summer through its Chinese investment firm, Shanghai Meicifang Investment Co.
By investing in the likes of Amouage, L’Oréal is recognizing consumers’ growing appetite for fragrance brands built on craftsmanship and authentic branding. But whether or not L’Oréal can court savvy consumers amid stiff competition from Puig and Estée Lauder-owned fragrance brands remains to be seen.
“L’Oréal, historically dominant in mass-market and premium designer fragrances, is now making a clear statement: It wants a bigger slice of the ultra-luxury olfactory segment. Entering the niche category is a logical step for them to maintain market leadership,” said Johanna Monange, founder of bespoke perfume house Maison 21G and former creative director for International Flavors and Fragrances.
According to data from market analysts Circana, fragrance was the fastest-growing beauty category in the U.S. in 2024, up 12% in dollar sales, with luxury perfumes representing 12% of prestige fragrance sales. But even with that growth, there are comparatively few players in the niche fragrance category that are large enough to be acquisition targets.
“You have categories in the market that are congested — for instance, color cosmetics. You have a lot of brands that are for sale, but very few strategics that are actually buying right now,” said Ariel Ohana, managing partner of investment bank Ohana & Co., which has overseen investments for fragrance brands like Juliette Has a Gun and Fueguia. “Niche fragrance is the opposite. You have more interest right now than you have brands that are sizable.”
Ohana estimated that fragrance brands would need, at minimum, $30 million in annual sales to be attractive entities to big conglomerates. He pointed to Amouage, which reported 30% growth in 2024 to surpass $260 million in annual retail sales, as one of the few remaining niche houses to have the size to be an acquisition target.
The fragrance category is growing globally, as well. L’Oréal’s recent investments indicate the French company’s desire to penetrate two distinct but growing fragrance markets: China and the Middle East.
“Up until recently, the big conglomerates — L’Oréal, Lauder, Puig, LVMH, all those guys — have been relying on acquisitions of Western brands to get in the niche fragrance business. But also, they were relying on those brands to do well in Asia,” said Ohana. “There’s a new trend, which is for those conglomerates to go and also make investments in local brands.”
Investing in Chinese brands like To Summer and Documents, which received L’Oréal backing in 2022, allows the French conglomerate to tap into brands that are both attuned to Chinese scent profiles and established on local social platforms. Though underdeveloped compared to Europe, the Chinese fragrance market has been fast-growing, with Euromonitor International expecting Chinese fragrance sales to reach 30 billion RMB ($4.7 billion) in 2025. L’Oréal is not alone in seeing the potential in local brands in China and beyond; Estée Lauder invested in Chinese fragrance brand Melt Season in 2023, while Japanese conglomerate Kosé acquired Thai fragrance brand Pañpuri in December.
In contrast to China, the Middle East fragrance market is historically more developed, Monange said, with consumers already knowledgeable of high-priced ingredients like oud and Taif rose. But that also means corporate backers must be cautious not to lose consumer trust as they scale fragrance brands up.
“The real challenge will be preserving the DNA of these niche brands as they become part of a large corporate structure. Quality, artistic integrity and the founder’s vision are often compromised when brands scale up too aggressively with wide distribution,” said Monange. “Unlike LVMH — which allows its maisons to operate independently, maintaining artistic freedom, separate P&Ls and exclusive distribution— L’Oréal is known for its highly centralized structure and mass-scaling model.”
According to Amouage, the investment from L’Oréal will not impact its approach to perfumery. “L’Oréal’s long term minority investment has no impact on the current Amouage operations, or the current growth strategy,” Marco Parsiegla, CEO of Amouage, told Glossy in a statement. “It allows Amouage to enhance its global competitiveness and reach while preserving Amouage’s identity and creative integrity. For example, it will allow Amouage to invest into production capabilities in Oman and expand the mono brand boutiques around the world.”
L’Oréal’s handling of niche fragrance properties has already disappointed some perfume consumers. The company acquired Parisian niche brand Atelier Cologne in 2016; in 2022, it withdrew Atelier Cologne from the North American market to the dismay of fans. In 2024, L’Oréal relaunched the brand with a focus on China.
L’Oréal’s recent activity stands in contrast to Estée Lauder, which acquired a slew of niche fragrance brands like Le Labo and Frédéric Malle in the mid-2010s but has since slowed down on acquisitions. In February, Estée Lauder stated it would focus on shoring up its existing brands in lieu of new acquisitions amid a 6% decline in net sales for the second quarter of fiscal year 2025.
But Ohana noted that L’Oréal’s recent investments are not full-scale acquisitions and that its investments in China, in particular, may be more about testing the waters than attempting to build global powerhouse brands. “It’s more kind of scouting and just wanting to make sure that they’re not missing on opportunities,” he said.
Puig’s investment in Byredo, meanwhile, already looks to be paying off. In January, the conglomerate reported a record €4.79 billion ($4.98 billion) in net revenue for the full year of 2024, with its fragrance division alone accounting for 73% of the company’s total revenue.
*Editor’s note: this article was updated with a statement from Amouage after publication.
