L’Oreal Agrees to Buy Urban Decay Cosmetics

Posted on Nov 27 2012 - 3:30pm by Dana Lindahl

French beauty and skin care company L’Oreal announced that it agreed to buy Urban Decay Cosmetics. This deal would give L’Oreal more ground in the higher-end makeup market. The company didn’t disclose the details of the deal but someone familiar with the matter said that the French cosmetic giant will pay $300 million to $400 million for Urban Decay, which is owned by private equity firm Castanea Partners. L’Oreal

The Wall Street Journal reported that Urban Decay is looking for buyers last August. It has an asking price of around $350 million. The company got the beauty industry’s attention in the 1990s with its edgy packaging and product names such as Stray Dog and Perversion. French conglomerate LVMH Moet Hennessy Louis Vuitton SA bought the company in 2000 and sold it to the private equity firm three years later.

L’Oreal’s acquisition of Urban Decay will complement its existing brands according to Nicolas Hieronimus, president of L’Oreal Luxe, which is the luxury division that includes brands like Ralph Lauren and YSL Beaute. Tim Warner, general manager of Urban Decay, said that the deal would allow Urban Decay to reach its full potential in the market.

L’Oreal’s luxury division has contributed to the growth of the company in recent months. It has offset the slower business in the mass-cosmetics market. To improve the division, the company invested in its high-end and specialist products.

L’Oreal said that the market for specialist brands made up 44 percent of the luxury makeup market in the United States. Urban Decay is available from specialist beauty retailers such as Sephora and Ulta. By joining L’Oreal, Urban Decay would be sold worldwide and via multiple channels.

L’Oreal is one of the world’s largest beauty, skin and hair care companies. Its annual sales exceed $25.95 billion. It owns Clarisonic, Maybelline New York, and Lancome.

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Dana Lindahl