Charting Aesop’s journey to a $25.5bn L’Oréal acquisition

by | Apr 5, 2023

Earlier this week, the L’Oréal Groupe confirmed it had secured ownership of Australian skin, hair and body brand Aēsop in its largest acquisition yet.

Wondering how the brand got here? Let’s unpick its history

‘My team and I are thrilled to have Aēsop join the L’Oréal Luxe portfolio of iconic global brands. Aēsop 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 upon adding Aēsop to the conglomerate’s 40-plus brand portfolio.

Aēsop’s iconic amber packaging, plant-based ingredients, and over-arching minimalism sees the Luxe division go in a new direction. The brand is a unique addition to the existing cohort of youth-focused brands like Cacharel and Youth to the People, and heritage brands including Lancôme and Shu Uemura.

What singles out Aēsop from other luxury wellbeing-driven brands is its grounding in essential oils – a cornerstone of the brand’s formulation since it’s formation in 1987.

Hair salon Emeis becomes Aēsop 

Dennis Paphitis started combining essential oils for haircare in his salon Emeis, before launching his product offering to the market in 1987. His customers developed a penchant for the pared-back, aromatherapy-based products resulting in Paphitis’ re-branded to Aēsop. At the time, the brand boasted only four products which solidified their power within cult beauty communities.

A combination of the brand’s recognisable packaging, outlandish store merchandising (keep your eyes peeled when the seasons change), and lifestyle-enhancing products drove an exponential period of growth in its initial 25 years.

Brazilian beauty conglomerate gains shares in Aēsop on the mutual philosophy of a sound mind in a healthy body

December 2012 rolled around with the news that the seemingly indie yet on-everyones-radar brand was selling 65% of business to Natura &Co. Having opened its 61st store weeks before – the first of three in San Fransisco – the period epitomised the brands jump from neighbourhood favourite to global mainstay.

On the deal Michael O’Keeffe, CEO of Aesop – who was appointed to the role in 2003 – said: ‘We are excited to partner with Natura, a company with similar brand attributes and a culture dedicated to improving the lives of its people and communities where it operates. In addition to shared corporate philosophies and values, we even feel the Brazilian-Australian fit is just right ­- both organisations originated from cultures that celebrate the philosophy of a sound mind in a healthy body.’

This synergy promoted continued growth for the brand – its gross sales increased from $28 million to $537 million and the company expanded into an extra 21 markets.

However, rumours started whirring in 2021 that Natura &Co were sitting on an increased debt load. At the time LVMH and Shiseido both reared their heads as potential buyers.

L’Oréal Groupe acquires Aēsop with visions of increased global expansion

That brings us to today – well Monday – when the French conglomerate flooded the industry with the news that they have made an agreement to acquire the brand, at an enterprise value of $2.525 billion.

The group is planning to harness the brand’s ‘superb combination of urbanity, hedonism and undeniable luxury’ to develop increasing trade channels to the Chinese market and in travel retail.

On the news, Nicolas Hieronimus, CEO of L’Oréal Groupe, said: ‘I am very excited to welcome Aēsop and its teams to the L’Oréal Groupe family. Aēsop 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.’

Image courtesy of @aesopskincare via Instagram.

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