The Estée Lauder Cos. Inc. is on something of a shopping spree.
This story first appeared in the October 31, 2014 issue of WWD. Subscribe Today.
WWD has learned the beauty giant has acquired stylist Linda Rodin’s luxury skin care brand Rodin Olio Lusso for an undisclosed sum. The acquisition marks the second deal this month for Lauder — the ink is effectively still drying on its agreement to buy indie fragrance brand Le Labo.
Lauder has a cash stockpile of $1.63 billion and has been on the hunt for new brands to nurture and grow — and to keep up with archrival L’Oréal, the world’s largest beauty company. As a result, there are no signs Lauder is done expanding its empire since L’Oréal continues to do deals of its own.
The purchase of Rodin Olio Lusso enhances the company’s position in the skin-care category and gives it another tool to tap into the booming oil market.
Olio Lusso translates into “luxury oil” and the brand’s centerpiece is The Luxury Face Oil, a combination of 11 essential oils derived from flowers and botanicals. A 1-oz. bottle sells for $170 on the brand’s Web site.
Rodin Olio Lusso is sold at Barneys New York, Colette and Liberty and other retailers. Its full range includes body oil, hand and body creams, perfume, soap and a scented candle, as well as hair oil developed with hairstylist Bob Recine.
Rodin — who’s modeled, run a boutique in SoHo, served as a fashion editor at Harper’s Bazaar and worked as a freelance stylist — started her beauty line in 2007, mixing up products in her Manhattan apartment and bringing them on set. The brand garnered attention behind the scenes in fashion and began to grow.
“The guiding philosophy of my brand has always been that ‘there is beauty in simplicity,’” Rodin said.
Fabrizio Freda, Lauder’s president and chief executive officer, described Rodin Olio Lusso as “the ultimate ‘insider’ beauty brand.” Rodin will stay onboard to continue to lead her brand.
“With its luxurious product line and strong creative point of view, we believe it has the potential to be a high-growth global skin-care brand that strategically enhances our portfolio,” Freda said.
Lauder can’t afford to let up in the acquisition hunt because L’Oréal is also looking to expand its portfolio.
Last week, the French beauty giant agreed to buy urban beauty brand Carol’s Daughter. That deal followed a flurry of other acquisitions this year, including Sayuki Custom Cosmetics and Brazil’s Niely Cosméticos, NYX Cosmetics, maker of Chinese facial masks Magic Holdings International Ltd., Decléor and Carita.
Lauder returns much of the cash it generates to shareholders through dividends and share repurchases, but it has also been improving its working capital, freeing up funds for acquisitions.
Freda told Wall Street analysts in August that Lauder’s M&A strategy is focused on brands that have a global potential.
“We don’t have a strategy of big M&A partnership, but rather [it] is about buying brands that we can develop over the years. MAC is the example of the ideal acquisition strategy for Estée Lauder Companies, buying a medium-sized brand and making it huge over the years.”
The Lauder M&A machine seems to have kicked into a new gear with these last two deals. Before this, the company acquired Smashbox in 2010, which was heralded as Freda’s first purchase.
Within Lauder, Rodin Olio Lusso falls into the expanding empire of group president John Demsey, who also picked up responsibility for Le Labo and oversees the company’s namesake brand as well as MAC, Tom Ford and others.
Lowenstein Sandler served as legal counsel to Lauder while Rodin received financial advice from Susan Newman and legal counsel from Greenberg Traurig.