Acquisition of NYX Cosmetics by French Cosmetics Giant L’Oreal

2014-06-19
Published : Jun-2014

The world’s biggest cosmetics maker, L’Oreal SA has agreed to purchase NYX Cosmetics, boosting its makeup range in North America where its consumer-products unit has faltered.

L’Oreal said that NYX Cosmetics will continue to operate from its Los Angeles headquarters under the brand’s current leadership team.

NYX which was founded in 1999 sells in more than 70 countries and is known for its low-cost but high quality cosmetics. NYX who competes against Estee Lauder Companies Inc.’s MAC Cosmetics said that it is one of the fastest-growing cosmetics company in the U.S. L’Oreal said that its sales rose 57 percent to $93 million in the 12 months through May.

From Japan’s Kose Corp to Germany’s Henkel AG, the personal-care market is consolidating to acquire niche brands so that they can widen their offers. Since the beginning of the year, L’Oreal has acquired spa brands Carita and Decleor and Magic Holdings International Ltd, a facial- mask maker. It has also brought its 8 percent stock which was held by Nestle SA. This year, the cosmetic giant has spent above $5 billion on deals.

In North America, sales at L’Oreal’s consumer-products division dropped in the first quarter, which represented the company’s slowest quarterly growth since the recession. L’Oreal said that regional sales at the unit, which includes Garnier shampoo, will accelerate through 2014 and will return to growth in this quarter.

L’Oreal’s other specialist makeup brands includes Urban Decay, which was acquired in 2012, and Maybelline New York.

NYX’s chairwoman and founder, Toni Ko said that in the last decade, NYX has seen tremendous growth and the company has complete confidence that L’Oreal will remain true to its mission and brand identity.

Jean-Paul Agon, the Chief Executive Officer and Chairman of L’Oreal said that with NYX, L’Oreal, aims to replicate the success that the company had with Urban Decay in the prestige segment. According to Agon, that will include strengthening NYX’s position in North America and expanding its distribution internationally.

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