French cosmetics retailer L’Occitane earlier this week said it will acquire U.K. skincare brand Elemis for $900 million in cash. The transaction is expected to close in the first quarter of 2019, the companies said.
Elemis has been owned by Steiner Leisure Limited, a portfolio company of global consumer-focused private equity firm L Catterton, according to an Elemis press release. The skincare brand has been sold through e-commerce, department stores, QVC and spas, including on cruise ships.
L’Occitane last year furthered its push into North America, opening sensory-rich concept stores on New York City’s Fifth Avenue and Toronto's Yorkdale Shopping Centre. Earlier in the year, the brand took a traveling pop-up truck, inspired by a vintage French Citroën van, on a cross-country spin from Washington, D.C. to Los Angeles.
L'Occitane is facing plenty of competition these days, as LVMH-owned Sephora and lower-priced Ulta pave the way in a market that continues to enjoy robust sales and as mass merchants like Macy's, Target and drugstore retailers all work to upgrade their wares.
The company has worked to revamp its stores throughout its footprint at home in Europe and elsewhere globally. The New York store boasts not only its signature beauty items but also over-the-top experiences, including a live video feed of its U.S. Instagram account, stationary bikes against a view of Provence, and a virtual 360-degree hot air balloon ride that can be "taken" while getting a (real) hand massage, according to a report from Glossy.
The retailer depends on the storied legacy of traditional Provencal scents and soaps but demands premium prices for its own iterations, and Elemis is poised to help expand its premium line. In a statement, L'Occitane Chairman and Chief Executive Officer Reinold Geiger noted the British brand's broad appeal — through geographies and generations — plus its use of natural ingredients and penchant for new product development.
The expansion should help both brands, though: L'Occitane's many stores and e-commerce site will only add to Elemis's sales channels.