LVMH’s Louis Vuitton is entering the world of cosmetics under one of the most celebrated British makeup artists, Pat McGrath.
With a range of 55 lipsticks, 10 lip balms, and eight eyeshadow palettes, the new “La Beauté” category will mark the luxury conglomerate’s venture into beauty within an established fashion brand.
McGrath, recognized as one of the world’s best makeup artists, already runs her cosmetics line under Pat McGrath Labs. But Louis Vuitton would offer an elite experience in 115 of its stores worldwide.
“Prepare to be wowed,” McGrath, creative director of cosmetics at Louis Vuitton, told Vogue Business in a story published Wednesday. “This is a métier—a concept with an artisanal approach to make-up that combines the heritage and legacy of the fashion house, with the best innovation that the French product labs have to offer.”
Louis Vuitton’s parent company, LVMH, has been facing luxury sector tailwinds, causing its sales to lag amid tepid demand. Last year, the company’s revenues fell 2%, while net profit plunged 17%.
LVMH’s perfumes and cosmetics segments were among the two segments that grew 4%, unlike Wine & Spirits and Fashion & Leather Goods, which saw sales decline.
Moreover, Sephora, which is a multi-brand retail chain of beauty products falling under Selective Retailing, has been a notable bright spot in LVMH's earnings in recent years. There's also been a growing interest in prestige beauty, which includes a more exclusive and high-end products.
While foraying into makeup won’t be a silver bullet to sector-wide problems hurting LVMH, it could excite buyers who want to own a Louis Vuitton product without spending too much on them. The French company has witnessed the so-called lipstick effect, where shoppers spend on small indulgences when they’re cash-tight, in the boom of Sephora.
“This is a particularly good timing for LV to launch their color cosmetics line in a moment in which many aspirational consumers have been priced out by brands after the price increases and mix elevation push of post-Covid years,” Mario Ortelli, managing partner of luxury M&A advisory firm Ortelli&Co, told Fortune.
That’s how fellow LVMH brand Celine played the beauty game—most of its bags cost a few thousand euros, but its lipstick, which debuted last year, is about €74. Similarly, Hermès bags are notoriously hard to get your hands on, and if you do, they’ll cost well into the six-figures (like this black Kelly bag worth nearly €48,000). But its lipsticks, part of its experiment into cosmetics launched in spring 2020, start from €50 onwards.
Fragrances are another way luxury companies have tried to diversify beyond fashion and accessories while maintaining their brand image.
Louis Vuitton’s choice of McGrath, whose products already sell at the LVMH-owned Sephora, could sweeten its foray into the space.
“LV has chosen one of the most famous make-up artists in the world as creative director, showing their aim to excellence and innovation in [the] newly introduced product line,” Ortelli added.
Several other players have also made similar moves, including Burberry and Chanel. Miu Miu, Prada’s sister brand, is planning a beauty line in 2025.
Louis Vuitton’s formula might sound familiar, but it could excite the younger luxury-hungry shopper amid a downbeat appetite for high-end goods.
“Others often rely on licensing agreements and hence have mixed success based on quality of partner and brand momentum,” Flavio Cereda, investment manager at GAM Investments, said. “LV have clout and firepower very, very few others have, so once they pull the trigger, it will become meaningful quickly.”
La Beauté’s production will take place in France, and Louis Vuitton plans to make leather goods for products inspired by the brand’s historic designs. In the 1920s, Louis Vuitton made brushes, mirrors, and toiletry cases.
LVMH didn’t immediately return Fortune’s request for comment.
