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L’Oréal acquires Vogue make-up to expand in Latin America

By Andrew MCDOUGALL , 01-Nov-2012

Beauty behemoth L’Oréal has targeted further growth in the Latin American cosmetics market with the announcement that it will acquire the Vogue mass-market make-up brand in Colombia from its shareholders. 

In Colombia, Vogue is the leader in mass-market make-up and the group's consolidated turnover was approximately €30 million ($39m) in 2011.

"Vogue is an important acquisition for L'Oréal Colombia as it strengthens its position in the very competitive make-up category," said Alexandre Popoff, L'Oréal's executive vice-president, Latin America.

"The brand represents development opportunities outside of Colombia, particularly in Central America, in Ecuador and in Peru."

Color cosmetics in Colombia

The most dynamic area in color cosmetics in Colombia last year was eye make-up, which benefitted from new color launches and a growing tendency to use more sophisticated make-up techniques, according to Euromonitor.

According to the market analyst, in 2011 many women began to use three different colors of eye shadow, and marketers are encouraging young people to have fun with their make-up, using creative color palettes.

“This successful marketing, combined with changing consumer behaviour, are driving continued volume growth and making the category unusually dynamic in Colombia,” says Euromonitor.

Key focus

Latin America has become a key focus for L’Oréal, and was one of the stand out markets, along with Asia Pacific, driving sales growth for the firm in the first half of 2012.

As the economy in Latin America expands, the French cosmetics company has turned its attention to doubling sales in the region and adding 50 million new customers by 2015; starting with the largest economy, Brazil.

The Colombia Vogue acquisition will complement L’Oréal’s current activities and continues the company’s strategy in the region, using its $2bn cash pile to make acquisitions as part of its expansion plans.

Opportunity territory

L’Oréal and Popoff believe that Latin America, along with other ‘New Markets’ hold a great opportunity for the company to expand.

In particular, Popoff has highlighted that within the ‘opportunity territory’ of Latin America, the big part of the growth is expected to come from mass-market products; in line with the purchase of mass market make-up brand Vogue.

Company CEO Jean-Paul Agon has also stated that growth in Latin America is accelerating and that the Paris-based company to continue to increase its local market share.

The Vogue acquisition will be completed pending the usual regulatory approvals, in particular the approval of the anti-trust authority. No further details have been provided at present.

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