La Bouche Rouge sold to Beauty Brands Global, Dilesh Mehta’s new holding company

Placed in receivership by the Paris Commercial Court on July 25, the French premium make-up label La Bouche Rouge was sold on October 3 to Beauty Brands Global. Behind this brand new holding company based in Dubai is a famous name in the world of beauty: Dilesh Mehta, entrepreneur and chairman of Designer Parfums. This British fragrance company has the Cerruti 1881 fragrance licence in its portfolio.

Now the sole shareholder in La Bouche Rouge, Dilesh Mehta is being supported in this acquisition by interim manager Vincent Jeanniard, a beauty industry expert who has worked for L’Oréal, LVMH and Burberry. “The Dubai holding company was set up for the sake of speed, because La Bouche Rouge’s situation was complicated. A company based in France is currently being set up,” explains Vincent Jeanniard.

At the head of this new structure, whose name is not yet known, are Jean Mortier, formerly at Coty, as chairman and Florence Rollet, formerly at Tiffany and general manager France of Coty, as managing director. The founder of La Bouche Rouge, Nicolas Gerlier, will continue to act as advisor and creative director.

Founded in 2017 La Bouche Rouge, which has its own laboratories in Orléans, initially launched with lipsticks, before marketing other make-up products, for the complexion and eyes. The top-of-the-range label is built around values such as eco-responsibility, which translates into vegan formulas made largely from natural ingredients, and recyclable containers, but also craftsmanship, since the containers are produced in French workshops. Last March, the brand also launched its first fragrances.

Positioned in a premium segment, La Bouche Rouge quickly made a name for itself in the highly competitive world of beauty, raising some €2.5 million in 2020 from Bpifrance and several business angels. Two years later, it raised a further €10 million from BpiFrance, the Swiss Mirabaud Lifestyle Impact & Innovation fund and the Chalhoub group, the leading luxury goods group in the Middle East. With this new round of financing, the brand wanted to expand internationally, particularly in China.

However, by 2022, the brand had recorded sales of €3.7 million, but losses of €6 million. Covid, as well as a costly failure to establish itself in China and excessive marketing costs (around €2 million in 2022) all put a strain on the business.

“There was also a strategy of opening new stores too quickly and too extensively for a small brand, which was not followed by a sellout,” says Vincent Jeanniard. As a reminder, at the beginning of 2023 La Bouche Rouge claimed to be present in 80 points of sale worldwide.  
 
Beauty Brands Global, which is taking over La Bouche Rouge’s formulation laboratory in Orléans and around fifteen of its employees, aims to review the company’s economic structure. But it wants to keep its fundamentals, such as product formulas, its made in France approach and craftsmanship. Prices, however should be lowered, particularly those of refills.

The Paris Commercial Court therefore chose Beauty Brands Global’s project over that of the make-up brand Le Rouge Français and the Mirabaud fund, which had also been joined by two former employees of La Bouche Rouge.

In the future, Beauty Brands Global may acquire or take over the management of other cosmetics brands.

“Things are going to change in the market in the near future, because many brands with sales of over €5 million are facing cash-flow problems, and funds are taking more and more precautions. In addition, a number of major groups with large portfolios could sell their brands,” concludes Vincent Jeanniard.