Another Niche, dermatological brand may have found a new home.
Talk surfaced Friday that the Estée Lauder Cos. is considering an acquisition of Murad Inc., the eponymous skin care brand founded in 1989 by El Segundo, Calif.-based dermatologist Howard Murad.
An Estée Lauder Cos. spokeswoman declined to comment on the transaction, but at least one industry source believes a letter of intent might have already been signed.
Large beauty firms' interest in clinical skin care brands, many of which are sold outside the department store realm, have percolated over the last several years. For instance, L'Oréal purchased the professional treatment brand SkinCeuticals two years ago, and in January, Procter & Gamble charged into the dermatologist skin care business by acquiring Doctor's Dermatologic Formula from a private equity fund for an estimated $50 million to more than $90 million.
Murad, which includes skin care products and dietary supplements, is sold via infomercial, on the Internet and in spas and specialty stores, including Ulta, Sephora and select Bath & Body Works. Industry sources estimate that it generates $100 million in manufacturer sales, with the Internet accounting for approximately $20 million to $30 million of sales.
Murad, should it be acquired by Lauder, would mark the beauty firm's third clinical skin care brand. Lauder's portfolio includes Clinique, which was created in 1968 as a dermatologist brand, and Rodan + Fields, which the firm acquired in 2003. The brand — created by Stanford University-trained dermatologists and frontwomen of Proactiv Solution, Katie Rodan and Kathy Fields — generated sales of $3.7 million in department stores last year, according to The NPD Group. As a point of comparison, Clinique reaped $1.2 billion during the same period. Several analysts speculated that, given Rodan + Fields challenges and Clinique's reliance on department stores, Murad would complement the Lauder portfolio by giving it a foothold in the active cosmetics segment — a business that L'Oréal has focused on growing in recent years — and alternative retail channels.
A.G. Edwards & Sons analyst Jason M. Gere said a dermatologist or doctor brand would be a nice "fill in" to Lauder's current portfolio, particularly given the plethora of young, niche skin care brands in the space that are increasingly grabbing consumers' attention. In a research report Tuesday, Gere wrote, "Considering that Estée Lauder and Clinique brands have slowing sales growth and past acquisitions such as MAC and Bobbi Brown have worked out very well, we wouldn't be surprised to see [Lauder] add to the portfolio over the next 12 to 18 months, if it wants to ensure it can deliver toward the high end of 6 percent to 8 percent organic sales growth longer-term."
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)