PARIS — On Tuesday, The Estée Lauder Companies unveiled its first fragrance-focussed innovation centre, housed in a stately building around the corner from Paris’ historic Place Vendôme.
The Maison des Parfums spans 2000 square metres and five stories, and will host the corporate offices for some of the US conglomerate’s perfume labels including Editions Parfums de Frédéric Malle, Kilian Paris and the European operations of Le Labo.
The Estée Lauder Companies’ chief executive Stéphane de La Faverie told The Business of Beauty that the new innovation centre, which was announced in 2024, is a manifestation of the conglomerate’s fragrance strategy: “To combine maths with magic.”
Its crown jewel is L’Atelier, a collaborative space on the building’s top floor equipped with the latest technology in fragrance development: a lab outfitted with Headspace machines that interpret scent components from raw materials; an Evaluation Room set up with glass booths for precise perfume appraisal; a Music Room centred on an “organ” where perfumers can compose new and unique accords. De La Faverie said that the investment in the innovation centre, which was not disclosed, will reduce a fragrance’s development time by 30 to 50 percent while allowing the company to triple its output of innovative new formulations.
“All our analysis and data shows that we will see a continuous acceleration of fragrance, because the young consumers are coming into the market,” said de La Faverie. “Scent is really consumed almost as a wardrobe today… consumers are no longer about one signature scent,” he added.
At the ribbon cutting on Tuesday morning, board chairman William Lauder reflected on his grandmother Estée’s legacy. “She loved this country, its elegance, its artistry,” he said. “Her love of fragrance was always rooted in emotion, and I know she, along with my father Leonard, would be so proud to see this next chapter unfold here in a city they loved so deeply.”
Fragrance is the beauty industry’s fastest-growing category, but ELC’s fragrance net sales were flat in the fiscal year 2025 while the conglomerate’s greater challenges — softening spend on its skincare and cosmetics both domestically and in China — hampered its overall growth and prevented it from cashing in on the perfume boom.
To make up for lost time, the company is adapting to shifts in perfume shopping behaviour, particularly toward scent layering and collecting, the rising demand for “functional” scents with neuroscientifically backed benefits and the growing “ambient scenting” category. While it operates other innovation centres in the US, Canada and China, the Paris Atelier is its first devoted entirely to fragrance.
Artificial intelligence will also be an important tool in constructing ELC’s future. “It doesn’t replace creativity, but it is incredibly fast when you’re going through the iterative process of perfumery,” said Sumit Bhasin, senior vice president for fragrance innovation and product development at The Estée Lauder Companies. Using AI-assisted models, for one example, helps perfumers quickly reformulate instead of tinkering over finicky mixtures; another device installed in the Atelier helps to determine a perfume’s sillage, or the strength and throw of its scent over time.
Executives pointed out that some consumer-facing AI tools have been implemented, such as an AI Scent Advisor chatbot which lives on Jo Malone London’s website. “Fragrance suffers from a poverty of language,” said Bhasin.
“It’s still a challenge to smell digitally,” added Jo Dancey, global brand president of Jo Malone London and ELC’s lifestyle fragrance brands. “I’m sure that moment will come.”
From Dollars to Scents
The Estée Lauder Companies is not the only conglomerate betting on its fragrance brands to drive growth. In October, Coty announced it would look to sell off its mass cosmetics brands like Covergirl and Rimmel to allow it to focus solely on perfume, while L’Oréal took a stake in French fashion house Jacquemus in Feb. 2025 to allow it the rights to make perfume under the brand name.
As ELC owns its fragrance brands, rather than licensing them as many of its peers do, it has free reign to control the retail experience, and is bullish on brick-and-mortar shopping. It has opened 40 fragrance boutiques in the last year alone, with plans to expand further — in October, it opened four stores for Tom Ford, Kilian Paris, Jo Malone London and Frédéric Malle next to each other on New York’s Prince Street.
“Freestanding stores remain central to fragrance because it’s really where you bring the whole experience to life,” said Dancey. Creating more engaging marketing around its existing best-sellers is another priority, evidenced in the appointment of actress Tilda Swinton to be the first celebrity face of Tom Ford’s 19-year-old Black Orchid for the brand’s recent Reserve campaign.
More investments in consumer-facing initiatives is one the five tentpoles of de La Faverie’s “Beauty Reimagined” turnaround plan implemented in February. While fragrance makes up around one-third of the group’s sales, its revitalising efforts have so far focussed on its luxury and prestige brands, which also includes Deciem’s Avestan.
De La Faverie concedes that there is “more work to do” in the brand’s prestige fragrance portfolio, which houses brands like Clinique, Aerin Lauder’s Aerin and the recently revived men’s label Aramis. In the prestige space, indie names like Phlur, Noyz and Sol de Janeiro have rapidly amassed market share and popularised kaleidoscopic formats like hair and body mists and solid perfumes.
“When we’re in the position to reignite M&A, there could be some opportunity in the future,” de La Faverie said. “But today, we are really focused on our own portfolio brands, and we think we have a lot of potential.”
Learn more:
At Estée Lauder Companies, Growth Remains Elusive
The company’s latest results show progress in cutting costs, but projects a steeper slide in sales this year than previously anticipated.
Sign up to The Business of Beauty newsletter, your complimentary, must-read source for the day’s most important beauty and wellness news and analysis.