L’Oréal has signed an agreement with Castanea Partners to acquire Californian cosmetics brand, Urban Decay worth US$130m (net sales recorded in the fiscal year ended June 2012).

 

The brand, which is based in Newport Beach California, was founded in 1996 by make-up expert Wende Zomnir. The brand which has built a reputation based on the concept of “beauty with an edge” and values of “femininity and irreverence” is considered to be a makeup specialist brand.

 

Castanea Partners is a private equity firm founded by operating executives and private equity specialists. Castanea is currently investing from its third fund, a $500 million fund that targets companies with enterprise values up to $250 million.

 

“The line has star products in the eye category such as the Naked Palette and recently successfully launched its new foundation, the Naked Skin weightless liquid make-up,” says L’Oréal. “Urban Decay is popular among the youthful highly-involved cutting-edge consumers who are attracted by the fashion-forward image of the brand. The market for make-up specialist brands represents 44% of the luxury make-up market in the US.”

 

SELF-SERVICE CHANNEL

“Urban Decay will beautifully complement L’Oréal Luxe’s portfolio of iconic brands,” says Nicolas Hieronimus, President L’Oréal Luxe.

 

“It is the make-up specialist we needed to fully satisfy young women in search of playful colours and inspiration in selective distribution, at an accessible price point.

 

Urban Decay is distributed in the key assisted self-service channel, which includes among others Ulta and Sephora. L’Oréal believes it to be one of the fastest growing segments in the US luxury retail universe.

 

E-COMMERCE

“It is totally additional to our existing propositions and as such it will contribute significantly to the growth of the Division in the years to come,” adds Hieronimus.

 

Frédéric Rozé CEO L’Oréal USA said, “Thanks to the acquisition of Urban Decay, the Group will strengthen its position in two very dynamic distribution channels in the USA, ie assisted self-service and e-commerce. We look forward to this new and exciting opportunity.” In the US, Urban Decay will report to Carol Hamilton, President of L’Oréal Luxe USA.

 

“L’Oréal’s strong innovation capabilities and presence in every channel of distribution will enable Urban Decay to reach its full potential in the marketplace,” added Tim Warner, General Manager, Urban Decay. “Together, we have great ambitions for the future.”