Retail Minute: Loreal acquires high-end beauty and skincare brand Aesop

Transcription Hi, I’m Elizabeth Lafontaine, chief retail analyst at Retail Leader Pro, and welcome to this week’s Retail Minute. Recently, Loreal announced its acquisition of high-end and boutique beauty and skincare brand Aesop. The deal was valued at an astonishing $2.5 billion. The brand operates 400 stores globally and grew 21% in dollar sales in 2022. There’s been a lot of speculation surrounding the deal — both about the acquiring company and what this means for the future of the brand. Part of Aseop’s allure to consumers is its ultra luxurious brand value and its small scale production. There’s often a fear when boutique brands are acquired by larger multi brand corporations that it will lose its luster and too much scale can backfire in consumer demand. Large retail conglomerates need these small and buzzy brands to grow, but it's a balancing act in growing the business while maintaining the momentum and current brand affinity. Aesop is definitely a product of social selling and word-of-mouth marketing with younger affluent consumers, and it will be interesting to see how that helps it in this larger organization. For Loreal, the deal to me represents the need for innovation in the beauty space, which is often coming from small, innovative brands. And this holds true in both the prestige and mass beauty markets. These large scale corporations need newness to grow, and hopefully this new brand in the portfolio can help bring some freshness to other brands. From all of us here at Retail Leader, have a great week and we will see you next time.

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