L Catterton, a private equity firm backed by French giant LVMH, has acquired a minority stake in the Swedish hair care brand Maria Nila. According to a statement from both companies, this collaboration will assist Maria Nila in expanding its product range and global influence, while solidifying L Catterton’s position in the beauty industry.
L Catterton continues to expand its beauty business and has previously invested in Marubi
Recently, private equity firm L Catterton, backed by the French luxury conglomerate LVMH, announced its acquisition of a minority stake in the Swedish hair care brand Maria Nila. Established in 1999, Maria Nila produces high-quality, sustainable, and cruelty-free hair care products. Their mission is to provide professional-grade hair care solutions with an environmental consciousness.
Maria Nila offers a wide range of hair care products, including shampoos, conditioners, treatments, styling products, and color care products. They cater to various hair types and concerns such as dryness, damage, and color-treated hair. Additionally, the brand is known for its innovative sulfate-free, paraben-free formulas, and free from animal-derived ingredients. According to Vogue Business magazine, Maria Nila’s revenue in 2022 reached 45 million euros.
In a joint statement regarding the acquisition, L Catterton and Maria Nila expressed that this collaboration would help accelerate Maria Nila’s growth by expanding its global brand presence, product portfolio, and sales channels. Furthermore, it will strengthen L Catterton’s position in the beauty industry.
As the world’s largest global consumer-focused private equity firm under LVMH, L Catterton’s recent investments in the beauty sector demonstrate LVMH’s strong focus on the beauty market.
Even before the establishment of L Catterton in 2016, L Capital had already invested in Chinese beauty company Marubi. As a strategic investor in Marubi, in May 2013, Marubi’s founder, Sun Huaiqing, and his wife, Wang Xiaopu, transferred 9% and 1% of their Marubi shares, respectively, to L Capital Guangzhou Beauty Ltd. for a total price of 270 million yuan and 30 million yuan. As the second-largest shareholder of Marubi after Sun Huaiqing, L Capital’s strategic investment in Marubi fully leveraged the resources of the LVMH Group, leading to deep cooperation in various areas, including product development, advertising and PR, and marketing.
Since its establishment, L Catterton has continued its investments in the beauty industry. As early as 2017, L Catterton invested in Tula Skincare, a probiotic-based superfood skincare line. With L Catterton’s support, Tula expanded its reach to consumers through multiple retail platforms such as QVC, and DTC, and collaborations with retailers like SpaceNK.
Similarly, L Catterton made its first investment of the year in Israeli beauty tech company ODDITY. Since the investment, IL MAKIAGE has gained a significant market share in the segment of color-specific categories and successfully launched the brand in numerous international markets, leveraging L Catterton’s global resources and expertise. ODDITY officially debuted on NASDAQ on July 19th, with the stock rising 35.8% on its first day of trading, closing at $47.53, with a market value of $2.687 billion.
In June 2018, The Honest Company, a baby care company founded by Hollywood actress Jessica Alba, received a strategic investment of $200 million from L Catterton. The Honest Company went public on NASDAQ in June 2021 with the ticker symbol “HNST.” Its stock price rose 44% on the first day of trading, closing at $23, resulting in a market valuation of $2.68 billion.
In 2021, L Catterton made a growth investment in the cosmetics brand DIBS Beauty, which was launched in September 2021 by co-founders Ken Landis (also a co-founder of TULA Skincare) and tech entrepreneur Dan Reich.
It is evident that since its establishment, L Catterton has been consistently expanding its presence in the beauty industry, covering various sectors including skincare, cosmetics, and hair care. This demonstrates LVMH’s optimistic outlook on the beauty industry.
LVMH Beauty’s business revenue ranks 6th among global beauty giants in 2023 H1
In the first half of 2023, LVMH continued its strong performance, with overall revenues reaching 42.2 billion euros, representing organic growth of 17%.
The revenue of LVMH’s Wines & Spirits division amounted to 3.181 billion euros, experiencing an organic year-on-year decline of 3%. On the other hand, the Fashion & Leather Goods division witnessed a significant organic year-on-year increase of 20%, reaching 21.162 billion euros. The Perfumes and Cosmetics division and the Watches and Jewelry division both achieved a 13% organic year-on-year revenue growth, with revenue figures of 4.028 billion euros and 5.427 billion euros, respectively. Notably, the Perfumes and Cosmetics division attained its highest revenue in the past five years. The Selective Retailing division saw a substantial year-on-year revenue growth of 26%, amounting to 8.355 billion euros.
Specifically, the LVMH Perfumes & Cosmetics division achieved a 13% year-on-year revenue growth to reach 4.028 billion euros in the first half of 2023, with an operating profit of 446 million euros, a 15% increase compared to the previous year. Geographically, Asia (excluding Japan) accounted for 34% of LVMH’s revenue, surpassing Europe (excluding France) and the United States, which accounted for 19% each. France contributed 9% of the total revenue.
Looking at the performance over the past five years, LVMH’s Perfumes & Cosmetics division achieved revenue exceeding €3 billion, reaching €3.236 billion in the first half of 2019. However, in the first half of 2020, the division experienced a significant decline in revenue, falling by 28.8% to €2.304 billion due to the global pandemic. As the impact of the pandemic began to weaken in the first half of 2021, the division’s revenue showed a remarkable rebound, with a year-on-year organic growth of 37%, reaching €3 billion and surpassing the pre-pandemic level of 2019. In the first half of 2022, revenue continued to increase, reaching €3.618 billion, and in 2023, it broke through the €4 billion mark, reaching a five-year high.
In a previous article on the global top ten beauty companies by CHAILEEDO, LVMH’s beauty division was ranked sixth in terms of revenue, reaching €4.028 billion.
LVMH attributed the strong performance of its Perfumes & Cosmetics business in the first half of 2023 to innovation and highly selective distribution policies, achieving 13% organic revenue growth. Operating profit increased by 15%. Dior performed exceptionally well, strengthening its leadership position in strategic markets. Sauvage confirmed its position as a leading fragrance worldwide, while the iconic women’s fragrances J’adore and Miss Dior continued to grow.
Furthermore, the Perfumes & Cosmetics made a significant contribution to LVMH’s strong performance, particularly with products such as Dior Addict Lip Maximizer and Forever Skin Correct foundation. Skincare also performed exceptionally well in the high-end Asian market, especially with its iconic Prestige range. Guerlain continued to grow, driven by the success of its Abeille Royale skincare line and the high-end fragrance collection l’Art et la Matière, which introduced the new Jasmin Bonheur fragrance. Givenchy benefited from the positive response to its new fragrance, Gentleman Society. Benefit successfully expanded its skincare range with The Professional, while Fenty Beauty’s latest product, Hella Thicc Mascara, became one of the company’s best-selling products.
For LVMH, beauty is an integral part of its business portfolio, and as it continues to expand its presence in the beauty industry, it is expected to rise in the global top ten beauty companies ranking.
The global hair care market is expected to reach $147.79 billion by 2030
LVMH’s private equity fund, L Catterton, acquiring a minority stake in the Swedish hair care brand Maria Nila demonstrates LVMH’s positive outlook on the hair care market.
According to data from Fortune Business Insights, the global hair care market was valued at $91.60 billion in 2022 and is projected to grow from $99.53 billion in 2023 to $147.49 billion by 2030, with a compound annual growth rate of 5.8% during the forecast period.
The market is segmented by product, including hair dyes, shampoos, conditioners, hair oils, and others. Shampoos are expected to hold a significant share of the market, accounting for 27.73% in 2022, making it the largest segment. Consumers’ frequent use of shampoos is expected to drive demand in this segment.
Fortune Business Insights states that hair dyes, shampoos, conditioners, and hair oils also have strong market shares due to the growing demand for hair care products in beauty salons, spas, and massage therapies. Additionally, changing fashion trends and the adoption of various hairstyles have garnered positive attention for other segments such as hair gels and hair sprays.
In the first half of this year, hair care has been a crucial part of the performance of major beauty conglomerates. Unilever’s Beauty & Wellbeing division reported a 9.1% increase in underlying sales, with a 5.1% price growth and a 3.8% volume growth. Hair care products performed well within this division.
Unilever stated that hair care products achieved high single-digit sales growth, driven by the Americas. Sunsilk and TRESemmé, which had successful relaunches, achieved double-digit growth. On the other hand, core skincare products experienced mid-single-digit growth, with slower growth than the hair care business.
The hair care business has consistently been a significant driver of Unilever’s steady revenue growth. According to its 2022 annual report, Unilever has 14 brands with turnover exceeding €1 billion, including Lux, Dove, and hair care brand Sunsilk. Lux and Dove also include shampoo products; other hair care brands such as Clear and Hazeline are well-known in the hair care market.
In the first half of this year, Unilever’s revenue reached €13.1 billion, ranking second among the top global beauty companies, just behind L’Oréal. The continued and stable growth of the Professional Products has been a crucial factor in the overall strong performance of the group. Similarly, L’Oréal’s Professional Products division achieved 7.6% growth, reaching €2.313 billion in revenue in the first half of this year. It’s worth noting that Coty, one of the top global beauty companies, reported revenue of only $2.64 billion in the same period, which is not far from L’Oréal’s Professional Products division revenue. This indicates that L’Oréal’s Professional Products division has established a prominent position among global beauty companies.
Even Estée Lauder, which has faced some challenges in recent years, has achieved consecutive sales growth in its hair care business over the past three fiscal years. Procter & Gamble also reported that organic sales in the beauty segment increased by 11% in the most recent quarter, primarily driven by high single-digit hair care product sales growth.
The positive outlook for the hair care market is primarily due to its stable consumer base. Hair care is a fundamental need in people’s daily lives. Almost everyone, regardless of gender, age, or profession, requires hair care products to clean, nourish, and protect their hair. This basic need provides a stable hair care product market consumer base. Hair care has become an essential consumer product, almost on par with skincare and fragrances. Even in situations of consumer downgrading and economic instability, the hair care market continues to show steady growth.
Additionally, the high-end hair care market is experiencing accelerated growth. According to beauty industry advisor Larissa Jensen from market research firm NPD, sales of high-end hair care products grew by 32% in 2021, reaching $2.6 billion, and the category’s size is expected to double in the next two years.
The hair care business plays a significant role in the performance of beauty conglomerates. Companies like Unilever and L’Oréal consider hair care as one of their growth engines. Based on the fundamental need for hair care and the increasing beauty consciousness among consumers, the hair care product market has a stable consumer base.
LVMH’s investment in the hair care business represents a further expansion of its product line in the beauty sector and solidifies its position in the beauty industry. It also reflects LVMH’s ambition in the beauty business.
