Estée Lauder acquires Deciem

Estée Lauder Companies Inc., which holds major beauty brands including MAC, La Mer and Clinique in its portfolio, announced that it has signed an agreement to increase its share in Deciem. The U.S.-based group, which since June 2017 already owns a 29% stake, has offered around $1 billion (€820 million) to rise to 76%, thus gaining control of The Ordinary, Hylamide, NIOD and the other brands that are headed by Deciem.

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 Chief Executive Officer of The Estée Lauder Companies Inc. - 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.

The deal signed between the two partners provides that over the next three years the company founded in 1946 in New York by the spouses Joseph and Estée Lauder will also buy the remaining shares of Deciem at a price yet to be defined.

Founded in 2013 in Canada from an idea of the eccentric former computer scientist, Brandon Truaxe (died in 2019) with the ambitious intent to revolutionize the world of cosmetics, the brand has become one of the phenomena of the 2000s. Self-described as "The Abnormal Beauty Company", Deciem is named after the 10 brands that were part of it (there are now 7): from "skincare for the Hyper-Educated" with its high-tech formulas of NIOD to the special serums that take care of the skin down to the deepest layers of Hylamide. The most popular name in the portfolio remains, however, The Ordinary which, with its low-cost treatments, based on ingredients such as vitamin C or retinol, sold 8 million products in its first year and won many fans, including Kim Kardashian. The key to this success has been the strategy of limiting the budget for PR and marketing to use the money saved in the creation of a wide range of affordable beauty products. In the fiscal year ending January 31, 2020, Deciem had net sales of about $460 million, with increases in the US, Canada and the UK. The question many are asking after the acquisition by Estée Lauder is: will quality, low prices and success characterize Deciem's future as well? Only time will tell.