Estee Lauder Takes Smashbox, Leaves Well Enough Alone
In the world of makeup, there are devotees of color, texture and "miracle" potions so ardent that a cosmetics company would do well to simply continue manufacturing them and count the profits (and blessings). Ditto for indie brands snapped up by cosmetics conglomerates. That's why Estee Lauder's (EL) latest acquisition of Smashbox -- if it follows the company's previous buy-outs -- should be another textbook case of big management leaving well enough alone.
LA-based Smashbox was founded by two brothers who just happened to be great-grandsons of a makeup legend -- Max Factor. What originally began as their photo studio evolved into a cosmetics line aimed at creating a flawless look for the camera. The Smashbox line grew into a powerful independent brand coveted by makeup junkies not only on the strength of its products, but on the shoulders of its studio artists who regularly work with A-list celebs, models, and photographers. These professionals share all their tips via the company's Web site (think learn to do a perfect smoky eye without looking like you got punched).
Smashbox also wielded its brushes in 60 countries across some pretty impressive retail channels including Ulta and Sephora (a unit of LVMH) as well as the television shopping network QVC, generating some $300 million in annual sales.
No doubt Estee Lauder's been eyeing the brand for some time, just waiting for the right time to add it to its growing portfolio of "makeup artist" lines that include MAC and Bobbie Brown. Fabrizio Freda, president and CEO of Estée Lauder noted that Smashbox will help strengthen the company's presence in prestige specialty channels worldwide, help increase product offerings, and enhance capabilities in digital media and direct response television. But it also means Estee Lauder scoops up another slice of the younger consumer pie, just like it did with MAC.
And just like it did with Aveda and Stila for instance, Estee Lauder's corporate presence remained in the background while it let the personality the brands built in their formative years shine through. I'd venture to say that even die-hard devotees of Stila Convertible Color or Aveda's Inner Light foundation would be shocked to learn their "small" brand is owned by the likes of Lauder.
Estee Lauder's bid for Smashbox is expected to close in July, subject to certain conditions including regulatory approval. Until then, and certainly thereafter, the only thing different about Smashbox should be its availability -- certain to grow once Lauder's resources start funding expansion.
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