The beauty industry is highly fragmented with much opportunity for consolidation, says Gareth Iley of Clearwater International. Transactions in the nails segment highlight the importance of accessing new distribution channels, particularly those that target the professional salon channel. Building on its acquisition of OPI, Coty bought the nail brand’s long-time distributor, Lena White, in a move that will increase its channel coverage and enable Coty to accelerate OPI’s brand development in the UK, its second largest market.
Revlon gained new access to the salon channel with its acquisition of professional nail brands Creative Nail and Shellac through its purchase of Spanish group Colomer for US$660m last year.
As these deals demonstrate, M&A has proven to be an effective means of accessing new distribution channels, and ensuring that beauty companies remain competitive. M&A activity is likely to continue in the sector, with significant interest from both trade and private equity during the remainder of 2014 and beyond.
