LVMH to invest in Korean cosmetic company Clio

This is the first time the luxury goods player has invested in the Korean cosmetics industry and reflects the growing kudos and influence the fast-moving and futuristic Korean cosmetics industry has on emerging trends worldwide.

L Capital, which is an investment bank affiliated to the LVMH group worldwide, confirmed the news last week, which has subsequently been reported by a number of Asian news outlets, including The Korea Herald.

Increasing the LVMH stake in cosmetics​

LVMH has said that it wants to invest the pledged sum of money in redeemable convertible preference issued by CLIO Co.

The France-based luxury goods company wants to increase its footprint in the cosmetics and fragrance business, where it already has nine brands, including Fresh and Make Up For Ever, which collectively have contributed strong growth to the business in recent years.

CLIO is focused on producing a range of prestige, high impact colour cosmetics that include lip gloss, compacts, eye make-up, BB creams, whitening creams, cosmetic pencils and skin care products designed for use with make-up.

The brand was established in 1993 and has evolved as a cutting-edge, innovative portfolio of more than 300 SKUs targeted at confident, professional millennial women.

Sales double on interest in Korean cosmetics​

In the last two years sales in the business have almost doubled to reach about €90m on the back of a growing interest in Korean cosmetics company from consumers overseas.

The majority of the products continue to be manufactured in South Korea, although the continued global expansion of the brand means that it is now being manufactured in a number of countries overseas, including Germany, France and Italy.

CLIO has been mulling an IPO as a means to raise capital and take the company to the next stage of its growth strategy, once an official investment contract has been signed, the reports state.

Although this is the first time L Capital   has invested in a Korean cosmetics company, it is not the first time investing in a Korean business.

Back in 2014 L Capital invested approximately €47m in entertainment company YG Entertainment, making it the second largest investor in the business.