Italian luxury group Dolce & Gabbana has created a new company to directly manage the development, production and sale of its perfumes and cosmetics, chief executive Alfonso Dolce announced on Monday.
The decision to internalize a multimillion-euro business, essential for many fashion houses but often managed through licensing, is the first for an Italian luxury group.
“We are thinking of a business model that could see ties and partnerships with our producers,” Dolce told Corriere della Sera. The Economy financial weekly.
He added that this decision was part of a “long-term strategy that commits us to consolidating, cultivating and promoting Italian craftsmanship and manufacturing excellence”.
Fashion brands have always branched out into high-end beauty products in an effort to diversify their products and expand their customer base.
A licensing agreement with Japanese cosmetics giant Shiseido ended in December.
The new company will start with a capital of between 200 and 250 million euros ($514.44 million), thanks to self-financing and “support from the banking system”, Dolce said.
It will employ around 130-150 people in Italy by March 2023 and another 100-120 abroad.
Dolce will be chairman and former LVMH executive Gianluca Toniolo will be CEO.
Toniolo said The Economy the retail value of Dolce & Gabbana’s beauty business was just over €1 billion, with fragrances accounting for the majority.
He added that the new company’s goal was to “double or even triple” its market share in the fragrance sector, strengthen its position in make-up and develop skincare products, which the group still does not.
By Giulia Segreti; Editor: Kirsten Donovan
Shiseido and Dolce & Gabbana partially terminate their beauty agreement
The changes will be effective from December 31 in all markets except France.