Puig’s shares slide on Vision 2032 unveiling amid Parfums de Marly rumors

Madrid – Spanish fashion and beauty multinational Puig Group experienced a turbulent day this Wednesday, October 28, as it held its first “Capital Markets Day” as a listed company and presented its new roadmap to 2032. The strategic plan was met by the markets with a -2.66 percent drop in its share valuation. This occurred amid rumours of its potential acquisition of French luxury perfume house Parfums de Marly.

Looking at the stock market performance of the century-old Spanish company during its historic day on October 28, Puig's shares opened the trading session slightly lower than the previous day's closing price. The stock dipped from 19.18 to 19.16 euros per share. Following a slight increase in the early morning hours, it seemed on track to recover just as the Spanish multinational published the key pillars of “Vision 2032”. Through this strategic plan to 2032, the company aims to surpass eight billion euros in sales. It also seeks to position itself as one of the top four “premium beauty” companies and one of the top two global fragrance players.

Once the strategic plan was made public and the presentation for main and potential investors in Madrid concluded, Puig's shares failed to rebound. Instead, they plummeted to close Wednesday's trading session at 18.67 euros per share. This represents a -2.66 percent drop compared to the 19.18 euros closing price on Tuesday, October 27. Consequently, Puig fell below the 19 euros per share threshold at the close of trading, something it had managed to avoid since October 13. This clearly signals a poor reception for its “Vision 2032” roadmap among investors. By the end of the day, its share valuation was left -23.80 percent below the 24.50 euros initial public offering price from May 3, 2024. Furthermore, it remains -8.61 percent behind the current consensus target price of 20.43 euros, with estimates ranging from 16 to 24.40 euros per share.

Pursuing French brand Parfums de Marly?

Coinciding with the presentation of the new strategic plan and the drop in share value, reports emerged on October 28 suggesting Puig is among the “suitors” to acquire French luxury perfume company Parfums de Marly. In this transaction, the group would compete against British private equity firm CVC Capital Partners, which is currently a minority shareholder in Spain's Tendam (Cortefiel) with investments in Authentic Brands Group (ABG) and Breitling. Another contender is British private equity firm Cinven. Cinven holds majority investments in Idealista, Universidad Alfonso X el Sabio, and Restaurant Brands Europe, which manages the Spanish operations of Burger King, Popeyes and Tim Hortons.

Parfums de Marly was founded in 2009 by Frenchman Julien Sprecher, an avowed enthusiast of 18th-century French haute parfumerie, and was acquired in 2023 by US private equity firm Advent International. Offering men's and women's fragrances priced between 175 and 300 euros, it positions itself as a leading niche perfume house in the luxury fragrance segment. This profile aligns seamlessly with the guidelines outlined in Puig's strategic plan. As FashionUnited reported yesterday, one of the group's priority growth strategies is to strengthen its “Niche Fragrances” portfolio. According to estimates from the Spanish company itself, this perfumery segment has experienced the highest growth since 2022. Puig estimates it will represent 20 percent of the global selective fragrance market by 2032.

Regarding the estimated figures for this potential deal, Reuters reported information attributed to two people familiar with the talks opened by Advent for its divestment in Parfums de Marly. Negotiations are reportedly taking place based on a valuation of the perfume company close to two billion euros. Sources noted that of the three competing companies, Puig appears to be the least “active” so far in its negotiations with Advent to purchase Parfums de Marly. When approached by FashionUnited regarding this potential acquisition, Puig declined to comment.