L’Oréal’s Buying Luxury Skincare Brand Aesop

L’Oréal’s Buying Luxury Skincare Brand Aesop

11 months ago2 mins

Mentioned in story

Cosmetics colossus L’Oréal announced this week that it’s buying Aesop, the luxury skincare brand.

What does this mean?

L'Oréal used its tried-and-tested acquisition strategy when it snapped up CeraVe, a budget skincare company, back in 2017: nab a smaller brand, give it a makeover and an international rollout, and – ahem – rinse and repeat. But Aesop's cult global following and $500 million plus in annual sales seems to have prompted a strategy reconditioning by L'Oréal. After all, the firm really dug deep for this one: it took months of negotiations before L'Oréal outshone competitors with a deal valuing Aesop at $2.5 billion. That cash injection could save the skin of the high-end brand’s former owner, Natura, too – helping the company trim its debt and focus on the other businesses it owns.

Why should I care?

The bigger picture: Aesop’s fabled riches.

It’s no wonder that L'Oréal had Aesop in its crosshairs. After Natura bought it in 2013, the brand shot past its other ventures – like Avon and Body Shop – at hair-raising speed to become the firm’s most profitable business. And just last year Aesop scored another touchdown, with a debut in China that overshot everyone’s expectations. That bodes pretty well for growth markets like India, Japan, and South Korea – and if anyone's got the smarts and the global distribution prowess needed to drive further expansion, it could be L'Oréal.

L'Oréal stock
Source: Google Finance

Zooming out: Slip me some skin.

Skincare’s a pretty glossy sector right now, with estimates valuing the industry at $150 billion back in 2021 and tipping it to almost double come 2031. And those towering figures make sense: after all, consumers are increasingly health-conscious these days, especially post-pandemic – and the aging West is likely to buy more anti-aging products as folks fight off wrinkles, eyebags, and crow’s feet en masse. Plus, with environmental consciousness on the rise too, Aesop’s eco-friendly elixirs of youth could be a very clever bet indeed.

Skincare market size
Source: Statista
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