Advent to buy Shiseido’s bareMinerals, BUXOM and Laura Mercier brands

31-Aug-2021 - Last updated on 31-Aug-2021 at 15:04 GMT

Related tags M&A Shiseido clean beauty

Global private equity firm Advent International is set to acquire three top Shiseido America cosmetics brands: bareMinerals, BUXOM and Laura Mercier.

The brands will be incorporated under the newly formed Advent affiliate AI Beauty Holdings Ltd. Terms of the transaction, which is expected to close by the end of the year, were not disclosed.

‘Clear leaders in prestige beauty’

“We are strong believers in the bareMinerals, BUXOM and Laura Mercier brands,” said Tricia Glynn, a managing director at Advent. “They are clear leaders in prestige beauty and are widely recognized for their quality, authenticity and innovation, with differentiated products and devoted customers.”

A forerunner of the “clean beauty” movement, bareMinerals launched its ORIGINAL mineral-based foundation in 1995 and has continued to market “makeup so pure and clean you can sleep in it.” Color cosmetics brand BUXOM – created in 2007 and ranked in the top five U.S. brands across various lip categories – focuses on “going big, being bold, and feeling sexy.” Meanwhile, makeup brand Laura Mercier launched in 1996 and pioneered the natural “flawless face” category.

Looking to the future, Glynn says that Advent will work “to accelerate the growth of these brands by continuing to develop innovative products, expanding into new categories and geographies, and enhancing digital engagement with customers.”

The next chapter: a ‘runway for growth’

“We believe these brands have significant runway for growth, particularly as we see the large and growing color cosmetics market benefiting from secular tailwinds.” said Pascal Houdayer, who will serve as CEO of the new beauty company. “I look forward to helping expand these brands across new products, channels, and regions, while enabling the new company to realize its full potential.”

The sale is part of Shiseido’s WIN 2023 medium-to-long-term strategy to transform its business and focus on the skin beauty as core category. Proceeds will be used to acquire new brands and reinvest in key Shiseido skincare brands.

Ron Gee, President and Chief Executive Officer of Shiseido Americas and Global M&A Leader says that the company believes that Advent is the right partner to guide the brands into their next chapter: “This transaction will infuse bareMinerals, BUXOM, and Laura Mercier with the resources and support needed for the brands and their talented teams to continue to grow.”

This is Advent’s second investment in the beauty industry in the last two years, following its acquisition of hair-care brand Olaplex in January 2020. The company was also the majority owner of European beauty retailer Douglas from 2013 to 2015.

AI Beauty Holdings will be renamed upon closing, and Advent Operating Partner Janet Gurwitch, founder and former CEO of Laura Mercier, will serve as an advisor to the new company.

The analyst's view

CosmeticsDesign-USA (CDU) asked Nina Nowak, Senior Innovation Researcher at Global Data, for her perspectives on the acquisition:

CDU: How might the acquisition change the US beauty market?

Nina Nowak: "Globally, the personal care market has been reshaping in recent months, with consumers often turning towards skincare, rather than make-up. Extended lockdowns, social distancing, and financial uncertainty had an impact on consumer demand for beauty products. This might have especially challenged upscale make-up brands. However, the premium make-up market seems to be on a good way to recovery in the US. According to GlobalData’s 2021 Q1 global consumer survey, 23% of US shoppers described their spending on make-up products as “high” with buying “high-end/premium versions” of make-up products, compared to a significantly lower 14% global average.

"The wave of various brand acquisitions continues, fuelled by the pandemic-related shift in market circumstances and consumer behaviour. The recent acquisition of the three brands previously owned by Shiseido is one of them. Following the deal, we can expect an image renewal and an updated positioning for Laura Mercier, Bare Minerals, and Buxom. As the three brands are strong players in the premium beauty category, the move may also fuel the competition in the already challenging market. The move displays also how brand acquisitions are becoming a common way to instantly strengthen the market presence and win over the consumer."

CDU: What should Advent ‘do’ with these three brands to succeed?

NN: :To capitalize on the returning demand, makeup brands need to accept that a year in lockdown has impacted expectations from beauty products. According to GlobalData’s 2021 Q1 consumer survey, 35% of consumers in the USA associate “good value for money” in beauty and grooming categories with high-quality products/ingredients while 17% identify it with multi-benefit/multi-functional product factors. This savvy attitude calls for the development of versatile products and marketing that signals high quality and prestige, but also a practical element. Those post-pandemic consumer expectations should be considered by Advent to lead the newly acquired brands to success.

"Furthermore, the growth of e-commerce and omnichannel shopping is crucial for the further development of newly acquired brands. The introduction of digital tools that facilitate online product sampling and purchases, as well as ensured presence of the brand across numerous retailers is crucial, considering that 67% of shoppers in the USA typically do their beauty and grooming shopping online (GlobalData’s 2021 Q1 global consumer survey)."