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With $1 Billion Investment, Estée Lauder Advances Toward Full Ownership of Startup Beauty Brand

Deciem

Estée Lauder Companies (ELC) is increasing its investment in Deciem Beauty Group by approximately $1 billion to take a 76% majority stake in the cult skincare brand and establish terms for full ownership in three years.

Best known for its line of serums named The Ordinary, Deciem was launched in 2013 and became a social media darling, garnering fans with its focus on transparency and accessible price points. ELC first invested in the company in 2017 and currently holds a 29% stake. The beauty conglomerate will pay approximately $1 billion to increase its investment to 76% in a transaction expected to close by June 30, 2021, bringing the company’s valuation to $2.2 billion. ELC will then buy the remaining interests in the company over the next three years, at a price yet to be determined, to become its full owner.

Known as “The Abnormal Beauty Company,” the Deciem portfolio currently includes six brands. Products are sold through a network of Deciem-owned and third-party ecommerce sites, as well as 33 freestanding stores primarily in the U.S., UK and Canada. For the 12 months ended January 31, 2021, the company reported net sales of $460 million.

ELC’s partnership with Deciem hasn’t been without drama. In 2018, the company sued founder and then co-CEO Brandon Truaxe to remove him from his leadership role after he went rogue on social media, announcing — falsely — that the company would be shutting down. Truaxe passed away in 2019. Co-Founder Nicola Kilner remains in the CEO position today.

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“Over the last four years, we have built a truly special long-term partnership with the incredible Deciem team, and we are excited for what the future holds,” said Fabrizio Freda, President and CEO of The Estée Lauder Companies in a statement. “Deciem is an exceptional company. Nicola and her team have built and cultivated authentic brands with highly effective, must-have products using a vertically integrated model, and have fostered a uniquely transparent and engaging communication style. The company’s hero products, desirable innovation, and digital- and consumer-first high-touch approach have been instrumental to its success.”

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