Founded in 1981, Essie boasts a portfolio of over 300 nail colors as well as nail accessories, treatments and solutions.
The company mainly supplies its products to salons and spas across the US, although international distribution of the brand began with the Japanese market, and it is currently carried throughout other regions including Europe, South America and Africa.
L’Oreal expects the agreement to be finalized in between 60 and 90 days, subject to customary US and international regulatory approvals; it was said in a statement.
Expanding presence in nail care segment
The nail care category is currently the fastest growing mass market category in the US, according to L’Oreal. The acquisition of Essie therefore allows the company to place greater focus on this lucrative segment.
Indeed, L’Oreal says it intends to achieve this goal by leveraging Essie’s position as ‘the ultimate nail color authority in the US’ (it achieved sales of $28m over the last 12 months).
Lucrative potential of nail care market
According to a recent report from market researcher Kline and Company, nail color was the only industry category to post double growth in 2009.
‘Cosmetics & Toiletries USA 2009’ noted that even a difficult economic climate in which consumers are more likely to forgo luxuries, sales of nail polish outstripped those of the traditional recession staple, lipstick.
Sales in this category grew 14.3 per cent last year, while in comparison, sales of lipsticks and lip glosses declined 5.3 percent.
According to Kline, its recent popularity is due to a greater number of product launches in the nail polish category, the rise in at-home applications and the return of nail color to the fashion world.