Estée Lauder Purchases Glamglow

GlamGlow

By: Julie Naughton.  Source: WWD

The acquisition race between Estée Lauder Cos. Inc. and L’Oréal USA hit a crescendo Friday afternoon with Lauder’s acquisition of hot indie skin-care brand GlamGlow.

Terms of the deal were not disclosed, although informed Wall Street sources estimated the purchase price could range from an initial $100 million or $125 million to a final possible payout of $200 million to $220 million.

GlamGlow’s retail sales for 2013 are estimated at $90 million by Wall Street sources, and the brand is sold in about 88 countries globally, with nearly 6,500 doors serviced by a network of distributors. Although the business was established only four years ago, GlamGlow is thought to be profitable, and sources indicate that Lauder intends to build upon the bottom line.

Retailers include Sephora, both in the U.S. and Europe; Douglas; Neiman Marcus; Selfridges; Harvey Nichols and Bloomingdale’s. Nordstrom will begin carrying the brand in January.

The acquisition is expected to be closed in January.

The GlamGlow deal, the fourth Lauder has signed since October, is the largest so far. The cosmetics giant snapped up quirky perfumer Le Labo and upscale skin-care brand Rodin Olio Lusso in October and artisinal fragrance line Editions de Parfums Frédéric Malle in November.

GlamGlow gives Lauder the chance to acquire a lifestyle brand, giving the venerable company a young, hip following without cannibalizing the group’s other franchises. It also grants Lauder entry into the red-hot

facial-mask market while giving it a Hollywood edge over rival L’Oréal, which began racking up acquisitions earlier in the year, when it bought the Chinese mask maker Magic Holdings International Ltd.

Founded in 2010 by Glenn and Shannon Dellimore, GlamGlow is a Hollywood-inspired, prestige skin-care brand that offers a collection of high-end, mud-based treatment masks. Its products retail between $39 and $69.

The current GlamGlow line includes five products, each designed to address a specific skin-care concern. The original GlamGlow product, Youthmud, exfoliates; Supermud is targeted at clearing up problem skin; Thirstymud hydrates; Powermud deep-cleanses, and Brightmud eye treatment is intended to plump and brighten under the eyes. In January, GlamGlow will launch a range of what it calls mud-to-foam daily cleansers. Additionally, GlamGlow offers various limited-edition products and gift sets.

“GlamGlow represents the ultimate in innovative facial masks,” said Fabrizio Freda, president and chief executive officer of the Estée Lauder Cos. Inc. “Glenn and Shannon’s vision — to create easy-to-use, effective products for camera-ready skin — has grown into an incredible success. GlamGlow is a top performer in specialty channels and effectively engages its devoted fans across digital platforms. Its unique focus on facial masks strategically complements our current prestige skin-care offerings.”

William P. Lauder, executive chairman of Lauder, added, “Glenn and Shannon have built a highly successful, sought-after skin-care brand with a uniquely Hollywood point of view. The Estée Lauder Cos. embraces their entrepreneurial spirit and vision and is committed to sustainably growing the brand while fostering the uniquely glamorous skin-care story that they’ve created.”

“The Estée Lauder Cos. embraces our brand philosophy that skin care can be sexy, innovative and fun,” said GlamGlow cofounders Glenn and Shannon Dellimore in a joint statement. “The company has the scale and vision to help bring the brand to its next phase of growth while remaining true to the identity that we’ve worked so hard to build.”

John Demsey, group president of the Estée Lauder Cos., will add GlamGlow to his ever-growing brand portfolio, which also includes flagship brand Estée Lauder, MAC Cosmetics, Tom Ford, Prescriptives, Bobbi Brown, Bumble and bumble, Jo Malone London, La Mer, Smashbox, Aramis & Designer Fragrance brands, Le Labo and Rodin Olio Lusso.

After acquiring Magic Holdings in the spring, L’Oréal this year launched a series of acquisitions — Carol’s Daughter, NYX Cosmetics, Sayuki Custom Cosmetics, Brazil’s Niely Cosméticos, Decléor and Carita, among them — although most of L’Oréal’s acquisitions have been bigger and pricier deals than Lauder’s.

The Sage Group LLC, Los Angeles, acted as GlamGlow’s financial adviser. Arash Farin, senior vice president, noted that the acquisition will afford GlamGlow the opportunity to expand into other product categories by using Lauder’s portfolio of services within the business — not to mention the parent company’s global infrastructure. “What they started will only accelerate,” Farin said. Andrew Charbin, vice president, noted that while GlamGlow has only five stockkeeping units now, the partners have been prolific in creating a new product nearly every six months. He also said the playful, interactive nature of the mud products will help GlamGlow build a larger following via social media.

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