Over the last few months, a flourishing of acquisition deals has seen players widen their international net and category reach, leveling ratios as appropriate.
Shiseido acquired Dr. Dennis Gross Skincare in December, contributing to the ongoing expansion of the Americas business, while adding a dermatologist-led brand to the portfolio. In January, Puig scooped a majority stake in Dr. Barbara Sturm reinforcing its position in the premium skincare business and presence in the US. The same month, L’Occitane Group added Italian home fragrance label Dr. Vranjes Firenzemarking the next step in building a geographically-balanced portfolio, while boosting its multi-brand stable.
These deals are in line with industry predictions. In future, skincare is expected to be the dominant Beauty & Personal Care category for M&As, according to research from global management consultants Kearney.
“Beauty tech as well as supplements and nutrition will also attract significantly more investment than in the past, while make-up will continue to lose momentum from a transaction. We also expect to see an increase in transactions in the fragrance category as the market faces consolidation,” noted Kearney.
There will be a focus on companies that provide an “aspirational brand experience”, “superior products”, and sufficient “headroom for growth”.
Pure influencer brands (as opposed to celebrity brands) and pure-play direct-to-consumer brands are not considered attractive targets anymore.