Estée Lauder Companies is out for shopping. In less than two months they have completed two acquisitions. In October they have taken over the australian brand Becca Cosmetics, for around 200 million dollars, as the rumor has it, and recently it was the turn of the US-based Too Faced. This time the price tag should be a whopping 1,45 billion.
In particular with the latter acquisition, according to some analysts, Estée Lauder is after a younger segment of the market, besides its traditional customers. The cosmetics giant should be now focusing on the Millennials, the generations born after the Eighties and active on social networks.
After all, also the other cosmetics behemoth and Estée Lauder’s main competitor, is moving along the same strategic lines. L’Oreal has just completed the acquisition of other two brands very popular among young ladies: Urban Decay and NYX Cosmetics.
Both brands bought by Estée Lauder are young and growing steadily. As opposed to Estée Lauder, they are strong in the e-commerce channel and leverage social networks for their marketing.
Becca Cosmetics has been gaining relevant market shares since when they launched in 2001, with their products focused on complexion: highlighters, concealers and foundations. During last year, they even doubled their revenues.
Too Faced followed a similar path: founded in California in 1998, they have been gaining visibility on the cosmetics market over the last years, with their very successful palettes.
They are bound to close this year with a sales increase of +70%, which will allow them to reach a turnover of 270 million.
Estéé Lauder’s profit were under pressure during last years, they are hoping to address these issues wth these acquisitions.
For those willing to read more, here is a link to the Financial Times .