L’Oréal USA on Monday signed a definitive agreement to purchase Carol’s Daughter, the urban beauty brand founded by Lisa Price in her Brooklyn kitchen in 1993. The acquisition “will enable L’Oréal USA to build a new dedicated multicultural beauty division,” said Frédéric Rozé, president and chief executive officer.
He declined to give further specifics of the proposed division.
Both companies declined comment on the purchase price, although industry sources speculated that L’Oréal paid about $60 million to $70 million for the brand. The deal is expected to close in 30 to 45 days, Price said.
It seems that 2014 is the year of the acquisition for L’Oréal, which scooped up Sayuki Custom Cosmetics and Brazil’s Niely Cosméticos in September, NYX Cosmetics in June, and in April Magic Holdings International Ltd., a maker of Chinese facial masks, and Decléor and Carita from Shiseido Co. Ltd. Meanwhile, arch rival the Estée Lauder Cos. Inc. is cranking up its merger and acquisition machine, punctuated by last week’s deal to acquire artisanal fragrance maker Le Labo. That purchase marked the first acquisition Lauder had made in four years since buying Smashbox.
“Carol’s Daughter possesses an expertise in the multicultural consumer segment, a rapidly expanding market that represents an important growth opportunity in the beauty industry,” said Rozé, noting that the multicultural beauty division will be a part of L’Oréal’s Consumer Products Division.
Price, as well as her current management team, will stay on board at their current TriBeCa offices.
“I want everyone to understand I’m not going anywhere,” Price told WWD. “This isn’t my swan song. It really is a partnership and we will work on it together. This is the company that I’ve always wanted to partner with. We began having conversations several years ago and they have now come to fruition. L’Oréal has a proven track record of helping established companies achieve their full potential while staying true to the core of the brand, and they have an understanding of the future of multicultural beauty. With L’Oréal’s resources behind us, the possibilities for the brand are endless.” In addition to entering new distribution, the brand will also be able to strengthen its partnerships in existing doors, said Price.
Carol’s Daughter has definitely had its ups and downs. In May 2005, music mogul and consumer brand marketer Steve Stoute put together a star-studded group of investors — including Shawn “Jay Z” Carter, Will Smith, Jada Pinkett Smith, Thalia, Tommy Mottola, James Lassiter, Jimmy Iovine and Andrew Farkas — to catapult the growth of the brand, which at the time was doing about $5 million in sales in about 20 doors, including a brand-owned store in Fort Greene, Brooklyn. In 2007, Pegasus Capital made a $50 million investment in the brand, as well. Carol’s Daughter would not comment on whether or not the stars who had invested in 2005 are still investors in the brand.
Carol’s Daughter’s products are now in about 2,700 doors, spread across specialty beauty stores such as Ulta and mass retailers such as Target Corp., as well as on HSN and carolsdaughter.com, and did net sales of $27 million for the 12 months ending Sept. 30. Carol’s Daughter had operated brand-owned stores, but in April its store division, CD Stores LLC, filed a voluntary Chapter 11 petition in a Manhattan bankruptcy court, with a plan to restructure operations for two New York stores, one at 125th Street in Harlem and the other at the Atlantic Terminal in Brooklyn.
The parent company, Carol’s Daughter Holdings, did not file for bankruptcy court protection.
Carol’s Daughter launched Mary J. Blige’s debut fragrance, My Life, via HSN in July 2010, selling 72,000 bottles in 24 hours. The brand’s ad campaigns were what Stoute referred to in 2011 as moving the brand into a “polyethnic space” — meaning they have more than one racial background — and have featured Pinkett Smith, Solange Knowles, Selita Ebanks and Cassie. As well, in 2013, Price partnered with Georgia-based entrepreneur Robin D. Groover on a salon dubbed Mirror: The Hair Salon at Carol’s Daughter. The salon is located inside Carol’s Daughter’s Manhattan flagship in Harlem.
The focus on multicultural beauty will continue to expand. Nine million people reported belonging to more than one racial group in the 2010 Census, comprising about 3 percent of the total population of the U.S. Ninety-two percent of people who reported multiple races provided exactly two races in 2010; white and black was the largest multiple-race combination. An additional 8 percent of the two-or-more-races population reported three races and less than 1 percent reported four or more races. Three-quarters of multiple-race combinations were comprised of four groups in 2010: white and black (1.8 million), white and “some other race” (1.7 million), white and Asian (1.6 million), and white and American Indian or Alaska Native (1.4 million). This is compared with U.S. Census data from 2005 to 2006, which noted that 5 percent of American children under age four were identified as multiracial, compared with 2 percent of people ages 25 to 29.