Byline: Julie Naughton / with contributions from Alev Aktar

NEW YORK — More than four months after Bristol-Myers Squibb put Matrix Essentials on the block, it has found a buyer: L’Oreal’s Cosmair Professional division.
Cosmair Professional, which already owns two other salon brands — Redken Fifth Avenue and L’Oreal Professionnel — signed a letter of intent to acquire Matrix late Monday. While the purchase price was not disclosed, industry sources estimated that it topped $500 million.
Matrix, which did $342 million in sales in 1999, is reportedly the U.S.’s largest salon products company. Based in Solon, Ohio, it produces beauty products — including shampoos, conditioners, styling products, hair color, skin care and color cosmetics — exclusively for the salon industry.
Bristol-Myers said on Jan.6 that it was selling Matrix in order to concentrate on its Clairol retail and professional brands. Matrix, acquired by Bristol-Myers in August 1994 for an estimated $400 million, was founded in 1980 by Cleveland-based salon owners Sydell and Arnold Miller.
“It’s extremely exciting for us,” said Jim Morrison, president of Cosmair Professional, to whom Matrix staff will report. “It strengthens our position in salons both domestically and globally.”
Morrison said that once the deal was done, Matrix would be run as a separate business entity in the Cosmair Professional division. “When you have two brands as unique and with the kind of heritage that Matrix and Redken do, it only makes sense to keep them separate and emphasize their strengths,” said Morrison.
While earlier in the year Henkel, Wella and Alberto-Culver had all been rumored to be interested in buying Matrix, most sources said they weren’t surprised to hear that Matrix had gone to Cosmair.
One source pointed out that the deal would give Cosmair a strong professional wet line — basically defined as a group of shampoos, conditioners and basic styling products — with Matrix’s Systeme Biolage, which did an estimated $100 million in sales last year. Cosmair Professional is thought to be stronger in color than in wet lines.
“With this deal, you’re getting the number one and the number two professional hair care brands merging,” said another hair care executive. “They may now control 25 percent or more of the professional hair care market with Matrix and Redken. They will have tremendous critical mass, and costs could well drop due to the economies of scale.”
Morrison had nothing bad to say about how Bristol-Myers has handled the brand. “We’ve admired Matrix for many years,” he said. “As far as building it, we’re looking forward, not backward. We feel that Matrix has some strong brand names, such as SoColor, OptiCurl, and of course, Biolage. We also believe it has incredibly strong goodwill. We want to maximize that goodwill and those brands.”
Some industry executives are of the opinion that Matrix had lost some of its luster after the Millers sold the firm to Bristol-Myers in 1994. “Bristol-Myers sent in a great management team, but they lost something of the personal touch that is so important in the salon industry,” said an executive. Others said that Bristol-Myers may have tried to grow Matrix too quickly, especially internationally. While the company has had limited success in Europe — particularly in the U.K. and in Italy — it reportedly hasn’t achieved universal success worldwide.
But Morrison isn’t worried about L’Oreal’s ability to build Matrix worldwide. “You have to look at the strength of the L’Oreal Coiffure business worldwide,” he pointed out. “We already do business with salons in 100 countries. That gives us a strong step forward in the the globalization process for this brand.”
Industry consultant Allan Mottus argued that Matrix is a better fit with L’Oreal than with Bristol-Myers. “Matrix is a much more entrepreneurial company than what Bristol-Myers is used to running. It’s more like a department store business: It has different product categories and entrepreneurially they have to deal with a lot of salon owners and distributors. Its profile fits L’Oreal better.”