L’Oréal, the luxury beauty conglomerate, has announced that it will acquire Aesop, the Melbourne-based luxury skincare company, from Natura & Co. for a proposed transactional value of more than US$2.5 billion. The deal is tipped to be finalised in the third quarter of 2023 and will also be Australia’s largest luxury acquirement.
In a statement by L’Oréal CEO Nicolas Hieronimus, “Aesop is the epitome of avant-garde beauty, whose products are not only made with great care and exceptional attention to detail; they are a superb combination of urbanity, hedonism and undeniable luxury.”
“Aesop taps into all of today’s ascending currents, and L’Oréal will contribute to unleash its massive growth potential, notably in China and travel retail.”
Once the acquisition has the regulatory approvals, Aesop will join the L’Oréal Luxe division, which also houses other brands like Lancôme, Yves Saint Laurent, Helena Rubinstein, Kiehl’s and Mugler.
“Aesop holds a very unique positioning on the global luxury beauty market thanks to its design-led brand essence, its highly efficacious and sensorial products, as well as its customer-obsessed retail philosophy,” said Cyril Chapuy, president of L’Oréal Luxe.
“We look forward to welcoming Aesop’s CEO Michael O’Keeffe and his experienced and passionate teams to continue to grow together the brand’s remarkable potential, by carrying on cultivating its uniqueness and its values,” he continued. “We have great confidence that Aesop will join the L’Oréal Luxe Billionaire brands club, and therefore contribute significantly to the growth of the division in the years to come.”
Founded by hairdresser Dennis Paphitis in 1987, the brand started out with haircare products due to the founder’s frustration with what was offered in the market at that time. Over the years, he slowly expanded the product range to include skin, body and, most recently, fragrances in 2022. The brand has nearly 400 stores and counters across 27 markets, and gross sales increased to US$537 million in 2022.
Aesop’s parent company first purchased a 65 per cent stake of the brand in 2012 for US$68 million and by the end of the year, it had bought over the remaining 35 per cent. Under Natura & Co, the brand became the most profitable despite being one of the smaller companies in the group. Known to have amassed a cult following for its minimal aesthetic and strong focus on plant-based ingredients and sustainable vegan formulas, Aesop is the crowning glory of Natura & Co.
While that is the case for Aesop, Natura & Co.’s CEO Fabio Barbosa said that the decision for divestment would “support its financial deleverage and focus on strategic priorities such as the integration of its Latin America operations”, as reported in Reuters. It will also re-focus the group to further optimise its operations for Avon International and The Body Shop, which Natura & Co. currently owns.
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