Yesterday (May 6), CHAILEEDO learned that Aesop, the fragrance and skincare brand under beauty giant L’Oréal Group, announced it will close its first mainland China store on Dongping Road in Shanghai on May 10.
According to an announcement on Aesop’s official Xiaohongshu (RedNote) account, the closure is due to the expiration of the lease. However, Aesop did not disclose the reason for not renewing the lease.
Public information shows that Aesop was founded in 1987 and is a niche, high-end vegan brand from Australia. Its products focus on natural ingredients and promote an organic philosophy, with offerings that span skincare, body care, hair care, fragrances, and home products — making it a comprehensive, full-category brand.
Around 2012, Aesop was acquired by Natura & Co, the largest cosmetics company in Brazil. According to Natura & Co’s financial reports, between 2018 and 2022, Aesop’s net sales were about $138.4 million, $243.1 million, $364.8 million, $474.7 million, and $494 million respectively. Except for a modest 4.6% year-over-year growth in 2022, the brand maintained over 25% year-over-year growth in other years.
On August 30, 2023, L’Oréal announced the completion of its acquisition of Aesop from Natura & Co for $2.58 billion.
In the Chinese market, Aesop entered mainland China in 2018 and launched a Tmall Global flagship store. On November 25, 2022, it officially opened its first mainland China physical store on Dongping Road, Shanghai.
According to media reports, given the sharp slowdown in China’s beauty market — particularly the continued weakness in the high-end beauty segment — L’Oréal has been reassessing its China strategy over the past two years and admitted to overexpansion in the country, especially in the high-end segment.
Although fragrances currently represent one of the best-performing categories in the beauty industry — with China’s niche fragrance market still seeing strong growth — Aesop, along with competitors like Estée Lauder’s Le Labo, operate primarily through independent stores in prime commercial areas, which come with much higher operational costs compared to traditional counters.
Additionally, reports indicate that Aesop aggressively expanded upon entering the Chinese market. Companies like L’Oréal and Coty Inc. have long emphasized China’s low fragrance penetration rate to exaggerate growth potential. However, recent performances by Estée Lauder and fragrance giant Interparfums, Inc. suggest that the fragrance market is now slowing down — mirroring the broader beauty industry. Estée Lauder’s Jo Malone London, a leading niche fragrance brand, has even entered a period of decline.
