What's going on?

Cosmetics colossus L�Or�al announced this week that it�s buying Aesop, the luxury skincare brand.

What does this mean?

L’Or�al used its tried-and-tested acquisition strategy when it snapped up CeraVe, a budget skincare company, back in 2017: nab a smaller brand, give it a makeover and an international rollout, and � ahem � rinse and repeat. But Aesop’s cult global following and $500 million plus in annual sales seems to have prompted a strategy reconditioning by L’Or�al. After all, the firm really dug deep for this one: it took months of negotiations before L’Or�al outshone competitors with a deal valuing Aesop at $2.5 billion. That cash injection could save the skin of the high-end brand�s former owner, Natura, too � helping the company trim its debt and focus on the other businesses�it owns.

Why should I care?

The bigger picture: Aesop�s fabled riches.
It�s no wonder that L’Or�al had Aesop in its crosshairs. After Natura bought it in 2013, the brand shot past its other ventures � like Avon and Body Shop � at hair-raising speed to become the firm�s most profitable business. And just last year Aesop scored another touchdown, with a debut in China that overshot everyone�s expectations. That bodes pretty well for growth markets like India, Japan, and South Korea � and if anyone’s got the smarts and the global distribution prowess needed to drive further expansion, it could be L’Or�al.

Zooming out: Slip me some skin.
Skincare�s a pretty glossy sector right now, with estimates valuing the industry at $150 billion back in 2021 and tipping it to almost double come 2031. And those towering figures make sense: after all, consumers are increasingly health-conscious these days, especially post-pandemic � and the aging West is likely to buy more anti-aging products as folks fight off wrinkles, eyebags, and crow�s feet en masse. Plus, with environmental consciousness on the rise too, Aesop�s eco-friendly elixirs of youth could be a very clever bet indeed.