L’Oreal, the French cosmetics giant, has recently acquired Australian luxury cosmetics brand Aesop in a historic $2.53 billion deal, marking its largest-ever brand acquisition. Previously owned by Brazil’s Natura & Co since 2012, Aesop is renowned for its high-quality skincare, haircare, and fragrance products. The brand’s headquarters are located in Fitzroy, Victoria, Australia.
View this post on Instagram
The acquisition of Aesop is a strategic move by L’Oreal to strengthen its position in the premium skincare and wellness market, with a particular focus on international expansion, including China. L’Oreal, which owns labels such as Maybelline and Lancome, has been moving upmarket to cater to consumers less affected by economic downturns. This deal provides Natura, the owner of Avon and The Body Shop, with financial relief from shrinking margins and heavy debt. L’Oreal CEO Nicolas Hieronimus sees “massive growth potential” in Aesop, particularly in China, where the Australian brand made its debut with two stores in the last quarter of 2022.
View this post on Instagram
The acquisition will also help L’Oreal tap into the fast-growing travel retail market. Aesop’s established distribution channels and customer base in China, along with its reputation for providing natural, sustainable skincare products, will be leveraged by L’Oreal to appeal to Chinese consumers. Aesop’s target market primarily consists of 25-34-year-olds, with a majority of its audience being female (62.10%). The brand operates nearly 400 stores worldwide and reported sales of $537 million in 2022, up 21% in constant currency from the previous year.
View this post on Instagram
Aesop experienced double-digit growth across all its regions last year and exceeded expectations in the Chinese market, one of the fastest-growing markets for cosmetics. The acquisition is expected to close in Q3 2023, subject to regulatory approvals. L’Oreal’s purchase of Aesop highlights the growing importance of the beauty industry in deal-making activity and demonstrates the French company’s commitment to expanding its presence in high-end cosmetics, particularly in the lucrative Chinese market.
