CITIC acquires China perfume brand

It represents the firm’s eighth acquisition in the beauty and lifestyle industry in recent years. Others include UCO Cosmetics, an e-commerce services provider for beauty brands, skincare brands Erno Laszlo and Trilogy, scent specialist ScentAir, cosmetics packaging provider Axilone, and intimate lifestyle brands Lifestyles and Lelo. Shanghai Xiangmiao and UCO are the only domestic companies; the others are international businesses with an existing or potential China angle.

The latest investment comes from CITIC’s third renminbi-denominated China buyout fund, which has a corpus of RMB3 billion ($439 million). This vehicle was launched in 2016 in tandem with the $1.57 billion CITIC Capital China Partners III.

However, a flurry of US dollar deal activity – including some of these international brands – meant that deployment of the dollar fund outpaced that of the renminbi vehicle. Regulatory approvals required for outbound currency flows limited renminbi involvement in these transactions. CITIC Capital China Partners IV, which closed at $2.8 billion in 2019, had no accompanying renminbi vehicle.

Established in 2013, Shanghai Xiangmiao has an extensive portfolio under the Reclassified brand, including car fragrances, scented candles, and scented personal care products, as well as perfume and home fragrances. It has more than 100 retail outlets across 50 cities.

"Consumers in China today have high aspiration for better lifestyle. This aspiration has stimulated the rapid development of related sectors. The growth of the perfume and fragrance sector has been particularly strong, with iconic brands such as Reclassified emerging in China,” said Hanxi Zhao, a senior managing director at CITIC.

She added that the company has a robust online presence to complement its offline retail network, enabling it to reach a broad consumer base through different channels.

Other recent activity by CITIC includes an investment in Max-Inf, a Chinese manufacturer of car seats for children. It is the company’s third private equity backer. The Carlyle Group first invested in 2013 via its Asian growth fund and exited two years later when Nordic Capital bought a majority stake in the business. Max-Inf was the China distributor for Britax Group, a UK-headquartered portfolio company of Europe-focused Nordic.

PwC and Haiwen & Partners served as financial and legal advisors, respectively, to CITIC on the Shanghai Xiangmiao deal.

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• Topics
• Greater China
• Consumer
• Buyouts
• China
• CITIC Capital