Beauty groups L’Oréal and Shiseido have long made waves with their splashy acquisitions, but their little-known Spanish peer Puig has also got in on the act by pitching itself to brand founders as a “flexible” acquirer.

The beauty and fashion group, which bankers value at €8bn-€10bn, unveiled its 11th acquisition in 12 years this month as it weighs a stock market listing. Puig is purchasing a majority stake in a high-end German “molecular cosmetics” brand, Dr Barbara Sturm, extending a run of deals including a majority stake in Charlotte Tilbury, which valued the UK cosmetics maker at £1.3bn.

Puig is still a minnow compared with the likes of L’Oréal and Estée Lauder, which have market capitalisations of €236bn and $49bn respectively, but its transformation in recent years has been drastic.

Before the spending spree began in 2011 the family-owned group, which sells everything from perfume to high heels, focused on just a few key brands including Carolina Herrera and Nina Ricci, bringing in annual sales of €1.2bn.

The Dr Sturm acquisition means it now has controlling stakes in a total of 14 brands. The Barcelona-based conglomerate has said its 2023 sales would surpass €4bn.

As the luxury sector grapples with the end of a post-coronavirus boom, Marc Puig, the founder’s grandson who serves as both chair and chief executive, said the company was “seeing some slowdown in growth” but remained in good shape.

That is partly because Puig does not classify itself as a luxury player and instead says it is in premium beauty. Puig said that segment “has traditionally been more immune because the unit price of products is lower, so it has different market dynamics to the luxury market. This resilience has been proven over time and is expected to remain.”

As the biggest cosmetics and fashion groups vie to tap growing demand for beauty products, they have eagerly snapped up or invested in smaller brands.

In 2021, for example, LVMH acquired Officine Universelle Buly 1803, a historic French perfume and cosmetics label. L’Oréal last year bought Australian high-end cosmetics group Aesop from its Brazilian owner in a transaction with an enterprise value of $2.5bn.

Consumer goods group Unilever and private equity firms had looked at buying Charlotte Tilbury, a brand associated with its eponymous founder and its YouTube make-up tutorials, before Puig secured it in 2020.

The Spanish company also scored a big win in 2022 when it fended off L’Oréal to acquire Byredo, a cult Swedish brand founded by Ben Gorham, a former basketball player.

Asked why a founder would choose Puig, Marc Puig told the Financial Times: “We have to be aware that every founder and every individual is different . . . we have been able to find appropriate formulas for each case. We try to be more flexible than other big houses — I think that’s what sets us apart.”

Charlotte Tilbury herself remains the chair and chief creative officer of her brand and has a seat on Puig’s nine-person executive committee. Jean Paul Gaultier, who sold to Puig in 2011, is still involved with his label even though he has retired.

Dries Van Noten, the Belgian founder of the high-end fashion house that carries his name, said his team had approached Puig about being acquired in a deal that was eventually sealed in 2018. The Spanish group gave his business the “strong shoulders” it needed to grow, including support for ecommerce and opening stores in China, he told Women’s Wear Daily.

“Like in every good marriage, I think there are good days, and sometimes less good days, but I think they really respected us, so they didn’t want to put the Puig stamp on our company,” said Van Noten, who has continued as chief creative officer.

Not all deals in the sector have a happy ending. Bobbi Brown sold her eponymous cosmetics brand to Estée Lauder in 1995 but left in 2016 after a couple of sour years, saying later that “the fun things go away” when you are part of a billion-dollar brand.

Puig was founded as a perfume company in 1914 by Antonio Puig, who reinvented himself after a ship carrying the merchandise of his previous import business was sunk by a German submarine. The two drivers of its growth in the 20th century were its distribution of foreign-made products in Spain and its production of perfumes under licence for other brands. A 1968 deal to make fragrances for Paco Rabanne was a landmark. Puig still holds the beauty licences of Comme des Garçons Parfums and Christian Louboutin.

Marc Puig has led the company since 2004 but said he would be the last generation of the family to head the business, even though he has no plans to step down.

One of the chair’s big goals has been to reduce the group’s dependence on licensing, which is less profitable than outright ownership. The company’s own products now account for more than 90 per cent of all sales. That also gives it end-to-end control over product and distribution.

Other groups want a bigger presence in high-end beauty, among them fashion house Kering and watch-and-jewellery specialist Richemont. They have started to build in-house capabilities, but have also contracted third parties to make products carrying their brand names.

Puig’s chair suggested that in the long term his rivals would realise that doing it themselves was a safer bet. “They will have to recover some of the brands that today have licences,” he said.

Despite diversification into fashion and skincare, fragrance remains the core of Puig’s business. Perfume has not been badly affected by the luxury slowdown and Puig is forging ahead with a push to sell more expensive products.

In an upmarket category it calls “niche fragrance”, which includes its 2015 acquisitions of L’Artisan Parfumeur and Penhaligon’s, Puig says it has grown faster over the past decade than any other company.

What distinguishes it from other luxury products, and what may shield it in a pullback in spending, is price. Top-end haute couture or watches can cost several thousand euros, putting them out of reach for many consumers, but high-end perfumes remain more affordable.

It used to be rare to find a 100ml bottle of perfume for more than €100. Now Puig has widened its price range, but has not gone far beyond €200 — a level that buys more natural ingredients and unusual scent mixes.

“There are people who say ‘I don’t want to smell like everybody else’,” said Puig. “People respond to that need to express themselves to the rest of the world.”