\u201cWe believe Becca Cosmetics is ready to be leveraged further,\u201d The Est\u00e9e Lauder Companies president and chief executive Fabrizio Freda told BoF. \u201cWe are well positioned to add amazing resources in social media, product development, research and development, and access to suppliers around the world. The other big resource is the access to global markets.\u201d<\/p>\n
The global reach of The Est\u00e9e Lauder Companies \u2014 which netted $2.2 billion in the Asia-Pacific region in its last fiscal year \u2014 is key to exploiting the potential of Becca Cosmetics, said the company. While 55 percent of Becca\u2019s customers identify as non-Caucasian, the majority live in the North America and Europe, suggesting an opportunity for global growth.<\/p>\n
The Est\u00e9e Lauder Companies was not the first to court Becca. Earlier this year, the brand hired investment bank Piper Jaffray to find the right buyer and multiple parties showed interest, including investment firm Castanea Partners, which came extremely close to acquiring the brand over the summer. However, when that deal fell through, The Est\u00e9e Lauder Companies stepped in, in turn allowing Becca to forgo the private-equity stage of its business development.<\/p>\n
Financial companies UBS and PricewaterhouseCoopers and law firm Lowenstein Sandler LLP advised The Este\u0301e Lauder Companies in the transaction, while Becca worked with Piper Jaffray and Greenberg Traurig LLP.<\/p>\n
The brand’s executive team, led by president and chief executive Robert DeBaker, and chief financial officer\/chief operating officer James MacPherson, will remain with the company. Becca will be added to the portfolio of executive group president John Demsey, who oversees a wide range of lines, from Tom Ford Beauty to Bumble and Bumble.<\/p>\n
Becca is the latest in a string of small-to-mid-size brand acquisitions made by The Este\u0301e Lauder Companies, including By Kilian, Glamglow, Frederic Malle, Le Labo and Rodin Olio Lusso. However, Becca is the first colour cosmetics company to join the group since it acquired studio makeup line Smashbox in 2010.<\/p>\n
The move appears to be well timed, as colour cosmetics have been a bright spot for the Est\u00e9e Lauder Companies in recent financial reports. In the group’s 2016 fiscal year, which ended in June 30, net sales of makeup were $4.7 billion, up 9 percent from $4.3 billion in 2015. Skincare sales were essentially flat during the same period, amounting to $4.5 billion, attributed to currency fluctuations in Asia in particular.<\/p>\n
But Becca\u2019s strength is not in what might traditionally be thought of as colour cosmetics \u2014 lipstick, blush, eyeshadow \u2014 but in complexion and luminosity: foundations, highlighters and concealers. The market for complexion products has soared with the rise of social media and, in particular, YouTube tutorials. (Google searches for the term \u201ccontouring\u201d \u2014 an application technique that requires the sort of highlighters and foundations Becca sells \u2014 began to uptick in 2013, spiking in January 2016.)<\/p>\n
\u201cWhat has been majorly affected by social media\u2019s success is makeup,\u201d Freda said. \u201cThe millennial generation, even teenagers… the selfie generation… are always makeup ready. They take more photos of themselves in a week than their mothers do a year. This change in customer behavior has created an increase in the makeup category, but also importantly, a very high interest in how to use this makeup.\u201d<\/p>\n
In 2015, Becca launched a collaboration with YouTube star Jaclyn Hill, who the brand reached out to after a video she did featuring its \u201cShimmering Skin Perfector Pressed\u201d more than tripled sales of the product in just one week, making it Becca\u2019s number-one selling SKU on Sephora.com. The first product Hill and Becca created, the \u201cChampagne Pop\u201d highlighter, remains its most popular SKU overall .<\/p>\n
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