Private equity giant buys Laser Clinics Australia for $AU650 million; The Hut Group acquires ESPA for $AU162 million; ASOS rolls out private label makeup collection; and L Catterton increases stake in Gentle Monster.
Private equity giant buys Laser Clinics Australia for $AU650 million
When Laser Clinics Australia called for indicative bids in July, the projected $AU600 million price tag for the nation's number-one provider of non-invasive aesthetic treatments didn't deter some of the world's biggest private equity firms from showing interest. Bain Capital, Permira and Kohlberg Kravis Roberts (KKR) led the pack of suitors, with major names from China and Germany rumoured to be checking out the deal. Australian Pharmaceutical Industries, the operator of Priceline pharmacies, announced it was pulling out of the race in late August when the competition became too fierce.
KKR emerged as the victor, securing the injectables, hair removal and skin treatment business for $AU650 million. Laser Clinics Australia has more than 80 clinics nationwide and is growing rapidly. KKR has been circling the Australian market across several industries this year, so the acquisition didn't come as a surprise to analysts.
Three in a row: The Hut Group acquires ESPA for $AU162 million
Another week, another acquisition by The Hut Group (THG), one of the UK's largest health and beauty e-commerce players. The fast-expanding company recently bought Glossybox, the beauty subscription service, and RY.com.au, Australia's largest haircare and skincare online store. The corporate shopping spree continues with the buyout of ESPA, the skincare and spa brand, for $AU162 million.
THG has been expanding at warp speed since it was founded in 2004. According to analysts, the company is expected to hit sales of $AU1.2 billion this year – a 50 per cent increase on 2016. Backed by heavyweight shareholders such as Blackrock, the world's biggest asset manager, and KKR, the new owner of Laser Clinics Australia, the ESPA buyout takes THG firmly into the prestige skincare category. Currently available in 700 spas in 60 countries, ESPA's account list includes storied names such as Harvey Nichols and the Ritz-Carlton, Peninsula and One & Only hotel and resort groups.
ASOS rolls out private label makeup collection
Bricks-and-mortar fashion retailers such as Zara and H&M have ramped up their beauty offerings over the past couple of years. The strategy is the same as pharmacies placing beauty products near the cash register: you've got the crowds in store, so why not tempt them with an impulse beauty buy?
Online fashion giant, ASOS, has unveiled its first own-brand beauty lineup, ASOS Face + Body. Slated to go on sale on September 20 on asos.com, the 46-SKU range is aimed at what demographers call first and second cohort Millennials – the 20-to-30-year-old age group. All the usual suspects with mass youth appeal have made the cut: lip stains, matte lipsticks, crayon-style pencils and contouring palettes. Body makeup and glitter products will be added early next year.
L Catterton increases stake in Gentle Monster
Anyone looking to sell their fashion or beauty brand hopes to attract the interest of L Catterton, the largest consumer-focused private equity firm in the world. With more than $US14 billion across six funds, the company's leading backer is LVMH, the world's largest luxury goods group and owner of Sephora. Australian brands in the L Catterton portfolio include Seafolly, R.M. Williams, Jones the Grocer and 2XU, the compression activewear brand. The private equity colossus has also invested in the Bliss and Elemis skincare spa brands, StriVectin, Il Makiage, Cover FX and Korean stalwart, Clio Cosmetics.
In March, L Catterton acquired a major stake in IICombined, the parent company of Gentle Monster, the Korean sunglass and eyewear company, for $US177 million. The quirky eyewear brand is available in 19 countries and has 11 standalone stores and is also going gangbusters in China. Further expansion in the US, Europe and the Middle East is also on the drawing board. A strong lure for L Catterton, which has invested another $US50 million in funds, say analysts, to become the brand's second largest shareholder.
Snippets from the wires
- Australia is a world leader in the testing and manufacturing of effective sunscreens. Eurofins Scientific – a group of international laboratories with revenues of over $AU4 billion a year – has bought Dermatest, Australia's leading sunscreen and skin evaluation lab. Founded 20 years ago, Dermatest will allow Eurofins to become the worldwide reference in sunscreen testing, says Managing Director Yann Agustin.
- As income levels continue to rise in emerging markets, the major personal care multinationals such as Unilever and P&G are in buy, buy, buy mode to secure their dominance in the global personal care market. According to a new report from Hexa Research, the worldwide personal care market is growing by 7 per cent a year to reach $US650.1 billion by 2024. The Asia-Pacific region has the largest market share and will retain its number-one ranking over the forecast period.
- Sustainability has become a major issue for fragrance makers. The days are long gone when brands spruiked expensive products by revealing the number of flowers used to create a minuscule amount of perfume absolute. Firmenich, one of the select club of multinationals that make most of the world's fragrances, has appointed Dr Berangere Magarinos-Ruchet as Global Head of Sustainability to lead the company's environmental initiatives.
- China is the world's number-one shampoo and conditioner market with annual sales of $US6.3 billion, reports Mintel. The US is the top market for hair colourants, at $US2.1 billion, and styling agents, $US2.38 billion.
- Only a handful of the world's influencers have made millions, usually through starting their own brands or businesses. Zoella, the British beauty influencer rated the world number one by Forbes, launched her first personal care range in the UK in 2014 and Target sells her bath and body products in Australia. She is a launching a new Winter Wonderland body collection through some of of the UK's leading beauty retailers: Boots, Superdrug and Feelunique.