Following an initial investment in “a vertically integrated, multi-brand company based in Canada” in 2017, the strategic partnership culminated with ELC purchasing the remaining shares of Deciem for approximately $860 million, according to a press release from The Estée Lauder Companies. “The total investment, net of cash, was approximately $1.7 billion over three installments,” according to the release.
The ELC and Deciem Acquisition Journey
Known as “The Abnormal Beauty Company,” Deciem is renowned for its commitment to ingredient transparency and innovative multi-brand strategies. The acquisition will significantly strengthen ELC’s skin care portfolio. Deciem’s flagship brand, The Ordinary, has been disruptive in the industry, ranking “in the top two for prestige skin care in its home markets of Canada and the U.S., and in the top four in France, Germany and the U.K. for the quarter ending March 31, 2024,” the press release stated.
Fabrizio Freda, president and CEO of ELC, praised Deciem’s achievements, saying, “We are incredibly proud of what Deciem is accomplishing. In our seven-year partnership, Deciem has achieved impressive growth while continuing its core mission of reimagining effective, high-quality skin care for today’s diverse and sophisticated consumer,” adding, “As a digitally native organization with a highly engaged following among millennial and Gen Z consumers, Deciem has contributed to the strategic expansion of our skin care portfolio and we believe there are many more exciting growth opportunities ahead.”
ELC Q3 2024 Financial Results BriefingLast month Freda was keen to highlight the completion of the acquisition, saying the company was “pleased to further strengthen our brand portfolio in new ways by acquiring the remaining shares in Deciem and completing the transaction we made three years ago when we became the majority shareholder.”
She further explained during the earnings call that the closing coincides with the partnership’s growing momentum in the global skin care space, saying, “Together, we have successfully invested in expanding The Ordinary’s innovation, increasing The Ordinary’s innovation as a percentage of sales from 5% to over 25% this fiscal year. We also expanded the brand globally, from India to the Middle East to South Africa, and improved profitability by driving operational efficiencies in our supply chain.”
Echoing this sentiment, Nicola Kilner, co-founder and CEO of Deciem, expressed her gratitude for the partnership in an ELC press release: “Today, The Estée Lauder Companies becomes Deciem’s permanent home. Our founder, Brandon, was determined to revolutionize the beauty industry, and this vision has been passed on to ELC throughout our partnership over the past seven years,” Kilner emphasized, “Their support, along with the energy of our incredibly talented team, has allowed us to strengthen our operational capabilities and enter new markets, while staying true to our founding values of transparency, quality and authenticity.”
Optimistic outlook for the future
During an earnings call last month, Freda expressed confidence in the outlook for Deciem and ELC, saying, “We believe there is still significant opportunity for The Ordinary and Deciem and are excited about the future.” In particular, he added, “We are excited about future developments, including the launch of The Ordinary in Japan during the fourth quarter.”
Furthermore, the press release emphasized that “over the past three years, The Ordinary has effectively increased the proportion of innovation in its sales through the launch of popular products such as Multi-Peptide Eyelash & Eyebrow Serum, Multi-Peptide Eye Serum, and Soothing & Barrier Support Serum, demonstrating the brand’s continued focus on developing innovative products.”
Stephane de la Favrie, Executive Group President of ELC, also expressed his enthusiasm for the future in the company’s press release: “Deciem is an extraordinary company with authentic brands, highly effective must-have products, and a unique, transparent and engaging relationship with passionate consumers around the world. We have enjoyed a great partnership over the past seven years, and I am thrilled to continue our journey together.”
As Deciem is further integrated into ELC’s portfolio, the combined expertise and resources are expected to drive continued growth and innovation in the global beauty market.
