Health & beauty in fine form.
Skincare giant L’Oréal,’s recent purchase of Aesop is the latest move within the health & beauty category within Europe that highlights the buoyancy and vigour of this part of the retail market.
The France-based business paid $2.5 billion for the luxury skincare brand that was founded in Australia but has a presence across Europe with 400 stores selling its high-end products. The brand sits in that very attractive space straddling both luxury and clean beauty. Not only is this part of the market growing quickly but it also enjoys very healthy gross margins. For Aesop this is calculated at around 87%, compared with L’Oréal’s 72%, according to Alliance-Bernstein.
Nicolas Hieronimus, chief executive of L’Oréal, stated: “Aesop is a superb combination of urbanity, hedonism and undeniable luxury…it taps into all of today’s ascending currents and L’Oréal will [continue] to unleash its massive growth potential.”
This will be achieved by it using its marketing and distribution prowess to accelerate the growth of the Aesop business in a move that will replicate the strategy successfully deployed with its acquisitions of CeraVe and Kiehl.
The deal came amid other activity in the health & beauty category, with H&M emphasising its commitment to this area through the announcement that it will open its first two flagship beauty outlets in early May. The stores, both in Oslo, will sit within existing H&M stores but have their own entrances. They will have double the footprint of existing in-store beauty departments at around 300 sq m and will stock own-label products alongside 80 external brands.
Meanwhile LVMH-owned Sephora made its return to the UK after a 17 year absence with the opening in March of a flagship physical outlet within the Westfield London shopping centre. The move follows the launch of the UK website last year that came on the back of Sephora buying UK-based online health & beauty retailer Feelunique.