Following the news that L’Oréal has agreed to acquire Australian luxury skincare, haircare, and fragrance brand Aesop for $2.5 billion:

Lia Neophytou, Lead Analyst of Health & Hygiene at GlobalData, offers her view:

“Targeted acquisitions of emerging and established players with engaged audiences have allowed L’Oréal to stay relevant in the rapidly evolving beauty industry. L’Oréal has employed this strategy to consistently align with shifts in consumer behavior and preferences, and its latest acquisition of Aesop is no different.

“Aesop will join the likes of Lancôme and Kiehl’s within L’Oréal’s Luxe division, as it has evolved to become a symbol of luxury, with high-quality formulations and modern, minimalist packaging becoming synonymous with the brand. Aesop’s clean aesthetic resonates with Gen Z and Millennial consumers and although its products have a high price tag – a 500ml hand soap is £31 – it has broad appeal that enabled it to launch in various premium retailers. Aesop’s products will continue to resonate with the 38% of global consumers who associate high quality products and ingredients in the beauty & grooming industry with value for money, as identified in GlobalData’s 2022 Q4 Global Consumer Survey.

“While it is possible to maintain a fresh, modern portfolio without acquisitions, L’Oréal stands to benefit quickly from Aesop’s cult following, strong brand identity and reputation. Its investment will facilitate further global expansion, particularly within China where the brand opened a store in 2022, extending the brand’s proposition to more potential customers who are attracted by its formulations and aesthetic.”