By Allison Collins
with contributions from Rachel Strugatz
 on March 27, 2017
Hourglass Vanish Seamless Finish Foundation Stick.

In a robust beauty M&A market, where prestige makeup brands remain a hot commodity, Hourglass Cosmetics has hired investment bank Ohana & Co. to consider a sale, according to two sources.

The business has approximately $70 million in net sales, according to a source with knowledge of the company. The auction for Hourglass is said to be competitive, and one industry source said L’Oréal is involved. Another source noted that the sales multiple Hourglass fetches in a deal would likely to be high, as it is an expanding business in the prestige cosmetics market, which is growing faster than any other category. Last year, several companies in that space sold for large multiples: L’Oréal purchased IT Cosmetics for $1.2 billion, a 6.1 times multiple, and the Estée Lauder Cos. Inc. acquired Too Faced for $1.45 billion, a 5.5 times multiple.

An Hourglass spokeswoman declined to comment for this story. Ohana did not respond to a request for comment by press time.

Hourglass Cosmetics

The blue-red shade Icon from the beauty brand’s new lipstick range. 

Hourglass is known for its complexion products, including Veil Mineral Primer ($54), Immaculate Liquid Powder Foundation ($56), Ambient Lighting powders and palettes and Vanish Seamless Foundation Stick ($46). That stick foundation became the most successful launch in Hourglass’ history, and was followed by Girl, a 20-piece lipstick collection that industry sources predicted will do $15 million in retail sales in its first year.

One industry source credited the brand’s Ambient Lighting Palette as the product that landed the brand on the modern-day beauty map, saying it “went bananas” in terms of sales. A beauty retail source said that palette sells quickly, and described the brand as one driven by product development and as a “contemporary luxury…[that] gives an entry-level prestige customer something to aspire to, and it gives the luxury prestige shopper understated elegance.”

Founder Carisa Janes launched Hourglass at Barneys New York in 2004. The line is now sold at Sephora (in the U.S., Mexico, Brazil, Italy, Canada, Singapore, Malaysia and Thailand), Bergdorf Goodman, Nordstrom, John Lewis, Lane Crawford, Harvey Nichols, Mecca, Blue Mercury, Net-a-porter, Liberty, Space NK and Harrods. Hourglass also has a flagship in Venice, Calif. that opened in 2014.

There have been many other cosmetics acquisitions recently, in addition to IT Cosmetics and Too Faced. Lauder also purchased Becca Cosmetics; Shiseido acquired Laura Mercier and L’Oréal bought Urban Decay and NYX.

For more on beauty M&A, see:

Nest Fragrances Said to Hire Moelis for Sale Process

Seeking Growth, Natural Beauty Companies Hunt for Investors

Beauty Acquisitions Expected to Continue in 2017

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