Exclusive: L Catterton Invests in British Fragrance Brand Vyrao

Niche perfume maker Vyrao is readying for its next stage of growth.

Today, it announced a significant minority investment from L Catterton, the LVMH-backed private equity firm.

L Catterton’s growth investment fund, Elevate Beauty, led the round. Also participating were Manzanita Capital, the family office of the Gap magnate Bill Fisher, and Estée Lauder Companies’ corporate venture capital arm, New Incubation Ventures, who also invested in its seed round in 2022. Financial terms were not disclosed.

The three firms’ combined portfolio includes some of beauty’s buzziest names including cosmetics brands Dibs and Merit, fragrance maker Diptyque and British retailer Space NK. They’ve also been behind some of the industry’s biggest exits: Manzanita sold cult fragrance line Byredo to Puig in 2022 for $1 billion, while Deciem, parent company of viral skincare line The Ordinary, was acquired by Estée Lauder in 2021 for $1.7 billion following a prior minority investment. L Catterton-backed beauty company Oddity went public in 2023 at a $2.7 billion valuation. It’s the first time the all three firms have participated in a joint round.

Vyrao ticked a few boxes for L Catterton, including price and distribution, said Cori Aleardi, founding partner at Elevate Beauty. A 30ml bottle of one of its seven fragrances costs $120, making the brand premium enough to sit in the booming prestige category, but not prohibitively expensive. Vyrao also has a broad wholesale network including Mecca in Australia, Saks in the US and Liberty in the UK.

Aleardi said it also stood out because of its collectible appeal. Customers tend to shop multiple fragrances from the line, rather than having the business concentrated around a single best-selling scent, she said.

“You can’t just rely on one signature scent anymore … [brands] have to create an environment where consumers can wardrobe their scents,” said Aleardi.

That’s been the thought from the start for Vyrao founder Yasmin Sewell, who launched the line in 2021 after holding top buying roles at fashion retailers such as Browns and Liberty. She said she had never liked the idea of a singular signature fragrance.

“We’ve got seven hero scents,” Sewell said.

Vyrao’s rise has dovetailed with the growing appeal of another buzzy theme: wellness. The brand describes itself as “sparking joy and boosting soul health” through its perfumes, which it calls “high vibrational scents.” With names like “Witchy Woo” and “I Am Verdant,” each bottle contains a crystal which the brand claims has spiritual properties, while it says the scents have mood-boosting qualities.

“[Sewell’s] unique ability to reimagine the convergence of luxury, wellness, and scent positions Vyrao to be a leader within this space,” Shana Randhava, senior vice president of New Incubation Ventures told The Business of Beauty in an email, adding that the brand is poised to make “significant strides” in defining and advancing the connection between wellbeing and beauty.

Vyrao is now focussing on growing its international presence and broadening its brand awareness as it jostles for more market share in a dynamic, but crowded, sector.

Right Fit, Right Time

Aleardi said a premium fragrance brand had been high on L Catterton’s wish list, but identifying a standout had been difficult.

“[Customers] want a fragrance that says something about them as an individual,” she said. “But how do you differentiate amongst all these niche fragrances that are coming out?”

The world of niche perfumery has no shortage of hopefuls. Indie brands like DedCool, Perfumehead and Phlur are all tapping into a burgeoning growth market, while conglomerates and fashion houses are looking to premiumise and refine their offerings to increase traction amongst a group of customers who are more than happy to spend triple digits on a single bottle — and want a whole collection of them. Per market research firm Circana, fragrance was the fastest-growing prestige beauty category in the first half of 2023, with sales up 12 percent in the US against the same period last year.

Even with that growth, fragrance brands face other headwinds. Their success is often predicated on being able to score valuable real estate in top fragrance halls like those in Selfridges and Harrods and hold their own against competitors on the next shelf.

A well-managed direct-to-consumer presence is also important, to protect their margins and control their brand universe, but also to ensure they’re gaining valuable customer insight that might get lost in the wholesale environment. Sewell said around 40 percent of Vyrao’s sales currently come from its own e-commerce site.

“I never want to be a DTC brand. It was never my vision to do that.,” said Sewell, saying her retail background made her keenly aware of stores’ power to build brands.

Niche to Mainstream

Armed with the new funding, Vyrao wants to build brand awareness. While it already does some digital marketing, it’s looking to add more staff and increase training to ensure it meets its potential in wholesale, especially in the US, a key growth market.

“We’re focussing on getting my words and message out to a bigger level,” said Sewell, explaining that qualities of the brand’s core proposition such as the mood-boosting or spiritual claims are better explained in person. “We don’t have to say too much, but we definitely need people to be saying it for us,” she said.

Ensuring customers continue shopping with the brand is also key — Sewell said one thing that attracted her to L Catterton was their choice of what she considers brands with longevity, rather than “hyped brands with a hot moment.”

Slow and steady may be the optimal pace.

Recalling the first six months of the brand’s launch, Sewell described some of the initial frustration she felt. “I remember everyone kept buying our sample set [of five fragrances]…I remember just wishing people would buy a standard bottle,” she said.

But over time, she noticed a shift.

“Those people who bought the sample set were coming back, and I realised they were wearing all five fragrances. That was my greatest marketing tool.”

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