Monday, May 17, 2010

Estee Lauder to Acquire Smashbox

WWD reported today that Estee Lauder plans to acquire the photostudio-born makeup company Smashbox Cosmetics. Lauder announced today that it has signed a definitive agreement to buy Smashbox, which is based in Los Angeles. The deal is expected to close in July, subject to certain normal legal conditions.

Smashbox, founded in 1996 by the great-grandsons of legendary Hollywood makeup artist Max Factor, generates about $80 million in wholesale net revenue and roughly $140 million in retail sales. That's a whole lot of money in my book!

Is this good or bad for Smashbox? If history is our guide, it's good. Bobbi Brown, MAC, and other companies purchased by Estee Lauder have grown and flourished. I'm not sure it's equally good for Smashbox customers. We have grown to love the generosity of the gifts with purchase (Let's Do Lunch on Tuesdays and Thursdays have been a huge hit with me!) that might disappear under certain conditions. We'll see. Smashbox has been innovative in its use of new media to promote the brand, and their presence at Nordstrom, Macy's, and other large department stores has been exciting. Additionally, I think the brand's quality and breadth of offerings has improved markedly in the last year or two.

The only thing we can say with certainty is that a very few beauty conglomerates control the majority of major cosmetics brands. To borrow Bobbi's phrase - in a way she didn't intend, I'm sure - that's pretty powerful.

What do you think?

Photo courtesy of Smashbox


Karen said...

I think it will be good for Estee Lauder. I should buy some stock!

Cindy (Prime Beauty) said...

I personally, hate to see independent brands getting snatched up (aka Essie). I prefer smaller boutique brands.

Charlestongirl said...

Hi Cindy!

I'm "betwixt and between" on this one. I guess time will tell whether this is good for us customers - or not.

I think the boutique brands are getting a lot of press these days, which is great! Feel like we ought to start one. :)