TL;DR
Beauty brand E.l.f. Beauty has acquired skincare disruptor Naturium in a $355 million cash and stock deal. With Naturium projected to generate $90 million this year, the acquisition is expected to double E.l.f.’s revenues in skincare and contribute $48 million to its sales in 2024. Independent retailers can take advantage of this growth by stocking Naturium products, capitalizing on its clean, cruelty-free skincare offerings at an accessible price point.
E.l.f. Beauty, known for its eyes, lips, and face cosmetics (hence the acronym), has made a significant move in the skincare market by acquiring Naturium, a disruptor skincare brand. Naturium, founded in 2019 by beauty journalist Susan Yara, is projected to generate $90 million in revenue this year. The $355 million deal is expected to close in September and contribute $48 million to E.l.f.’s sales in 2024.
Both E.l.f. Beauty and Naturium cater to the accessible, mass beauty market. However, Naturium differentiates itself with a slightly higher average retail price of $18 compared to E.l.f.’s $9. Both brands share a commitment to clean, cruelty-free, and clinically-effective skincare.
With Naturium already experiencing rapid growth through direct-to-consumer (DTC) distribution, including partnerships with Target and Spacenk, E.l.f.’s expanded retail distribution will further boost Naturium’s brand awareness. E.l.f. Beauty has a strong presence in retailers such as Target, Walmart, Ulta, CVS, Walgreens, Rite Aid, and Boots. By leveraging E.l.f.’s marketing muscle, Naturium’s brand awareness will grow from its current level of 5% and close the gap with established skincare brands like Neutrogena, Cerave, Cetaphil, and Clinique.
E.l.f.’s acquisition of Naturium is a strategic move to tap into the rapidly growing skincare segment of the U.S. beauty market, projected to reach $25 billion by 2028. E.l.f. Beauty has already established itself as a leader in the $18 billion color cosmetics market, which is expected to grow to $23 billion by 2028.
Independent retail store owners can benefit from this growth by stocking Naturium products. Naturium’s affordability, clean formulation, and commitment to cruelty-free skincare make it an appealing option for customers. By featuring Naturium alongside E.l.f. Beauty products, and independent retailers can meet the demand for accessible, effective skincare.
As E.l.f.’s retail distribution expands, independent retailers have an opportunity to ride the wave and attract customers seeking affordable, clean skincare options. By keeping abreast of E.l.f.’s marketing initiatives, retailers can align their promotions and campaigns to capitalize on the increased brand awareness Naturium will gain.
The acquisition of Naturium marks E.l.f.’s entry into the skincare market. With its proven success in cosmetics, as evidenced by its profitability and growth, E.l.f. has the potential to replicate this success in skincare. Independent retailers can position themselves as early adopters of Naturium, offering customers cutting-edge skincare products at competitive prices.
