L’Oréal has purchased Melbourne based luxury skincare brand Aesop in the biggest ever acquisition of an Australian luxury business.
Founded in 1987 by Melbourne hairdresser Dennis Paphitis, Aesop grew slowly to become an Australian luxury staple. Now Aesop boasts 289 stores across 28 countries, and is products are stocked in more than 100 different department stores. 65 percent of the business was sold to Brazilian company Natura & Co for $68 million USD in 2012, and in 2016 it acquired the whole business. Natura & Co also owns Avon and the Body Shop.
This deal, valuing the company at $3.7 billion (or $2.5 billion USD) marks the the biggest acquisition of an Australian luxury business with R.M. Williams $190 million sale in 2020 formerly holding the title.
In a press release today, Natura &Co have said the transaction will strengthen and deleverage its balance sheet, freeing up resources to focus on its strategic priorities, notably the integration in Latin America, as well as the further optimisation of Avon International’s footprint and the improvement of The Body Shop´s business. Aesop, while the smallest division within Natura & Co, accounted for more than 25 percent of sales. Under Natura & Co, Aesop’s gross sales increased from US$28 million to US$537 million. The number of stores and counters increased from 52 to 395 as Aesop expanded its geographic footprint from 8 markets to 29.
“We are proud of the remarkable success of the Aesop brand, and we are extremely grateful to all Aesop’s associates, who contributed immensely not only to Aesop’s success, but also to making Natura & Co what it is today,” said Fabio Barbosa, Chief Executive Officer of Natura & Co. “We are confident that Aesop’s growth story will continue under the ownership of L’Oréal and wish Aesop continued success in this new chapter.”
Nicolas Hieronimus, Chief Executive Officer of L’Oréal Group, said, “I am very excited to welcome Aesop and its teams to the L’Oréal Group family. 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.”
L’Oréal is in strong financial form, reporting $61.4 billion in sales for 2022, with 28 percent of sales in ecommerce across L’Oréal brands.
The transaction is set to be complete in Q3 2023.
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