Eurazeo Takes Stake in Ex Nihilo Niche Perfume Brand

PARIS — Eurazeo has taken a minority stake in French niche perfumery brand Ex Nihilo.

The European group has invested approximately 25 million euros in the company, while Ex Nihilo cofounders — Sylvie Loday, Olivier Royère and Benoît Verdier — are majority owners.

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Niche fragrance brands are a sweet spot in the swiftly growing perfume industry today.

“Consumers are now looking for more personalized fragrance to express their individuality, creating strong demand for niche fragrance brands,” said Aishwarya Rajpara, senior research analyst at Euromonitor International.

Simultaneously, new demographics, such as Chinese shoppers, are swiftly becoming niche fragrance aficionados, expanding the overall market substantially.

Eurazeo’s investment is mean to help support Ex Nihilo’s growth, with the investment group leveraging its international network spanning Europe, Asia and the U.S. Eurazeo is also to lend its digital capabilities, home in on Ex Nihilo and its community, as well as bolster the brand’s organization worldwide.

Ex Nihilo, which is Latin for “created out of nothing,” was founded in 2013. The brand is rooted in French luxury perfumery savoir-faire and has made a mark with its modern approach to craftsmanship, artistic and brand collaborations, and the possibility for personalization of fragrances and packaging.

“When we created the house, the idea was to represent the French avant-garde,” Verdier said.

The brand partners with Givaudan perfumers. Ex Nihilo’s bestselling fragrance was among its first — Fleur Narcotique, by Quentin Bisch.

“We love to collaborate with the outsiders, the young and emerging talents that could bring a lot to the house,” Verdier said.

Ex Nihilo cofounders Benoît Verdier, Sylvie Loday and Olivier Royère.
Ex Nihilo cofounders Benoît Verdier, Sylvie Loday and Olivier Royère.

Ex Nihilo has about 50 perfumes today, with prices upward of 280 euros for a 100ml. bottle.

Fragrance blending is possible through the brand’s Osmologue machines, which let consumers customizecertain Ex Nihilo scents. The brand also produces collectible pieces and unique, made-to-measure perfumes on demand.

Ex Nihilo generates about $60 million in retail sales through brick-and-mortar and digital retail channels. Its distribution includes prestige department stores, such as Harrods, Bergdorf Goodman, Galeries Lafayette and Saks Fifth Avenue. There are also seven flagships offering the personalization service, plus partnerships with specialty stores and niche perfumeries.

The brand has about 300 sales points globally today.

Europe and the Middle East are Ex Nihilo’s geographic anchors at present.

Verdier said organically, the time has become right to bring in an investor.

“After 10 years, we were quite big and well-established, but still quite small and very exclusive,” he said. “Now, we want to give a new momentum. We wanted to find the right partner.”

Eurazeo was a great fit in many ways, including corporate culture and on a personal level, according to Verdier.

Geographically, a strategy is to grow Ex Nihilo’s presence in the U.S. and soon in China, as well as elsewhere in Asia and digitally.

All its stores are inspired by the first Paris boutique, on Rue Saint-Honoré, with the house’s signature royal blue as well as a local detail.

“[Eurazeo is] expert in growing mid-sized companies into something bigger,” Verdier said. They bring a lot of knowledge.”

That includes consumer-related data.

Laurent Droin, managing director of Eurazeo Brands, called the relationship with Ex Nihilo founders “a partnership.”

“It’s a whole story and a very differentiated brand,” he said.

Droin explained Eurazeo was drawn to Ex Nihilo for various reasons.

“One is the sector [it’s in],” he said. “Niche fragrance is a very interesting sector. Fragrance in general is a growing market, but niche fragrance is the segment that is growing the most.”

Droin described perfume as a category that gives a lot of experience and content, what consumers are after.

“The fragrance you wear tells who you are, it’s an experience that you smell every day. It is also a message you want to pass on to people,” he explained. “So it’s incredibly powerful.”

Droin sees the niche fragrance segment poised for growth.

“The high-end niche fragrance is here to stay,” he said.

Eurazeo’s Laurent Droin
Eurazeo’s Laurent Droin

Eurazeo was also drawn to Ex Nihilo itself.

“It’s quite difficult to build a differentiated brand in this market, and the three founders have managed to create a brand of scale,” said Droin, adding this has been done through the consumer experience and perfume quality. He also lauded Ex Nihilo’s authenticity.

“The third piece is the quality of the partnership,” Droin said. “It’s very important that we are value-add capital. I think there was a real fit between what they were expecting — support, a sparring partner and what we want to do. There has been a good chemistry with them.”

The first orders of the day will be to structure the company for the next phase of growth. That includes recruiting and reinforcing the brand’s culture.

“The second point is going to be to help them polish the brand — they have a gem,” Droin said. “When you scale it, you have to polish the diamond.”

Thirdly, it’s to support Ex Nihilo’s international growth, in a limited number of key markets. Growing business in the U.S. is the next frontier, while Asia, especially China, is a commitment for the long term.

Eurazeo has been refocusing on Europe. Jill Granoff, formerly chief executive officer of U.S.-based Eurazeo Brands, has shifted her role to become a senior adviser. In Eurazeo’s December newsletter, Christophe Bavière and William Kadouch-Chassaing, co-CEOs of Eurazeo, wrote: “Our ambition is to become the leading player in private asset management in Europe in the mid-cap, growth and impact segments.”

In April 2022, Eurazeo, through its brands team, led a Series B funding round for Gisou, the premium honey-based hair and beauty brand from the Netherlands. That left Eurazeo with a minority stake in the business. Eurazeo sees in the consumer segment an opportunity to invest in growth equity — Droin underlined Eurazeo’s commitment to the long-term prospect of brands offering what’s relevant and meaningful to consumers.

“We are really about the future of consumers,” he said. “And we believe that consumers are here to stay — the spending is not going down. They are just reallocating in a more meaningful way.”

They’re about less but better, more experience and content, outlined Droin.

“Every shift is an opportunity for investors,” he said.

In the consumer segment, especially beauty, exit opportunities are very good, as many big strategics are looking to invest in the category today. Over the past two years in niche perfumes, major deals have included Kering acquiring Creed and Puig purchasing Byredo.

Strategics are after innovative brands to scale for the long term.

Eurazeo, which is listed on Euronext Paris, has 33.5 billion euros in diversified assets under management and supports more than 600 mid-market companies. It has offices in Paris, New York, London, Frankfurt, Berlin, Milan, Madrid, Luxembourg, Shanghai, Seoul, Singapore and São Paulo.

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