Beauty giant L’Oréal is doubling down on its luxury business. It announced on Monday that it’s buying Australian beauty brand Aēsop from Natura &Co in a deal valued at $2.5+ billion, its largest-ever brand acquisition.
Aēsop, founded in 1987, sells luxury skin, hair, and body products, and operates around 400 store locations in 29 markets. It entered mainland China with new stores last year. Since Natura &Co bought the brand in 2012, its sales have grown from $28 million to $537 million in 2022.
The deal, expected to close in Q3, follows months of rumors around who would pick up the brand; LVMH and Shiseido were floated as potential buyers.
The brand will join the L’Oréal Luxe Division, which includes Lancôme, Kiehl’s, and Armani, helping the French beauty conglomerate grow its presence in China and in the travel retail channel, L’Oréal Groupe CEO Nicolas Hieronimus said in a press release. Division President Cyril Chapuy added it hopes to welcome Aēsop into its “billionaire brands club,” which includes five luxury brands, including Helena Rubinstein, which will join the club this year.
Under the skin: While L’Oréal owns mass brands like NYX, Garnier, and Maybelline, it’s continuing to build out its presence in luxury, where demand is “extremely robust” amid the global upper middle class, Chapuy said in the company’s most recent earnings call.
- Since 2019, L’Oréal Luxe has picked up smaller luxury skincare brands like Youth to the People and Takami.
Hieronimus noted on the call that L’Oréal Luxe secured $15.9 billion in sales last year, serving as its “number one division and growth engine” which “continues to outperform the luxury market both in sales and profitability.”
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