L’Oreal describes the Australian cosmetics brand, currently owned by Natura & Co., as the “epitome of avant-garde beauty.”

Vegan luxury cosmetic brand Aesop has been bought by L’Oreal for $2.5bn (£2bn). This acquisition marks the biggest deal by the French luxury giant in decades.

L’Oreal, which owns various labels including Lancome and Maybelline, has reached an agreement to acquire the Australian cult brand from Natura & Co.

According to L’Oreal, Aesop is the “epitome of avant-garde beauty.”

Describing the brand in a statement, L’Oreal’s chief executive Nicolas Hieronimus said: [The] products are not only made with great care and exceptional attention to detail; they are a superb combination of urbanity, hedonism, and undeniable luxury.”

Aesop’s market

Aesop makes soaps, lotions, and creams and has garnered a loyal fan base worldwide since its establishment 36 years ago by Dennis Paphitis, an Australian hair salon owner.

Aesop has almost 400 stores globally. All of its products are 100% vegan and sold in apothecary-style brown bottles. Moreover, it is cruelty-free, although L’Oreal is not.

The deal between the two brands is expected to close in the third quarter of 2023, subject to regulatory approvals.

According to L’Oreal, this takeover will help it unleash Aesop’s large growth potential in travel retail and in China, especially after the luxury brand made its debut with two stores in the last quarter of 2022.

“Aesop taps into all of today’s ascending currents, and L’Oreal will contribute to unleash its massive potential, notably in China and travel retail,” Hieronimus said.

Will the acquisition hurt or boost sales

Brazil’s Natura, owner of Avon and The Body Shop, owned Aesop after it bought a 65% stake in the brand in 2012 and fully acquired the company four years later.

The L’Oreal takeover will definitely help Natura & Co. address its shrinking margins and reduce its debt.

The Brazilian cosmetics company’s chief executive, Fábio Barbosa, said the brand would now focus on improving its other businesses, including UK high street chain The Body Shop, which it bought from L’Oreal in 2017.

“The disposal of Aesop marks the start of a new development cycle for Natura & Co. With a strengthened financial structure, a healthy balance sheet, and strict financial discipline, Natura & Co. will be able to focus more on its strategic priorities, including its investment plan in Latin America,” he added.

While L’Oreal’s acquisition could potentially provide Aesop with more resources to expand and reach a wider audience, some consumers may be skeptical of corporate ownership and question if Aesop will continue to uphold its values under the umbrella of a larger corporation.

This is particularly contentious because, although L’Oreal doesn’t use animal testing for any of its products or any of its ingredients, it has admitted that “ because our products are sold in China, L’Oreal still figures on the PETA [animal testing] list.”

“In China, the health authorities still require and carry out animal testing for certain products.”

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