Friday, July 22, 2016

L’Oréal to Purchase IT Cosmetics for $1.2 Billion

L'Oreal's Brand Portfolio
L’Oréal, the well known beauty empire, is acquiring IT Cosmetics, the fast-growing beauty brand built by Jamie Kern Lima, for $1.2 billion.
The brand has been projected by industry sources to be on track to do $400 million in retail sales for 2016.  L’Oréal expects IT Cosmetics’ focus on a more natural look to complement its colorful and on-trend Urban Decay line, which was acquired in 2012.
Although Loreal has strong sales in Sephora and Ulta, they haven't been able to attract QVC customers. This deal will give L’Oréal access to QVC, one of IT Cosmetics’ primary distribution channels. Jamie was able to create a great relationship with QVC and thier customers because of her charismatic spokesperson personality. 
IT Cosmetics makes more than 300 beauty products, focusing on color cosmetics, brushes, tools, and most recently, skin care, which the company launched earlier this year. On QVC, Lima is known to remove her makeup to show the rosacea that prompted her to start the business in the first place – and then reapply her cosmetics live on television.
IT Cosmetics founder Jamie Kern Lima
“When we starting having success as a brand is when real women started spreading our authentic brand mission and DNA,” Lima said. “When women find a product that actually truly works for them, they tell people. They spread the word. It was real women getting real results — that’s what kept our company alive in the early years.”
TSG Consumer Partners acquired a minority stake of It Cosmetics in 2012, followed by Guthy Renker in 2013.  Loreal paid each company a hefty return to acquire these shares. 
IT Cosmetics’s sales projections for the year indicate 30 percent year-over-year growth. The brand will be part of Loreals Luxe Disvision, and will continue to operate out of its New Jersey headquarters under the current leadership team. 
“The biggest thing that I’m most excited about is utilizing L’Oréal ’s global infrastructure to really take our mission to a whole new level so much quicker and so much bigger than we could on our own,” Lima said.
“IT Cosmetics will perfectly complement the L’Oréal Luxe’s brand portfolio to satisfy the rising demand for make-up as well as hybrid skincare,” said Nicolas Hieronimus, president L’Oréal selective divisions. “The brand has earned the devotion of its highly engaged consumers and we see potential for significant growth in the years to come,” said Freedéric Rozé, president and chief executive officer of L’Oréal USA.
IT Cosmetics is the latest acquisition in L’Oréal ‘s recent deal spree. In June, L’Oréal signed an agreement to buy Atelier Cologne.

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