U.K. fashion retailer Boohoo has doubled its stake in cosmetics brand Revolution Beauty.
Boohoo announced the move in a Monday (Nov. 28) news release, saying it had increased its stake in Revolution from 12.8% to 26.4% due to its “belief in its growth potential.”
The two British companies had an existing relationship, with Revolution selling its products through a number of Boohoo’s direct-to-consumer brand websites and its digital department store Debenhams.
The consolidation comes during a tough year for the cosmetics industry, as consumers move away from non-essential purchases such as personal care products due to high inflation. Revlon has put itself up for sale recently, according to published reports, after declaring bankruptcy earlier this year.
Meanwhile, Estee Lauder recently acquired luxury brand Tom Ford for $2.8 billion. According to a report by NPR, the company’s Tom Ford Beauty Line saw its sales increase nearly 25% during its last fiscal year. Estee Lauder said that it expects the line to bring in net sales of $1 billion in the coming years.
Research by PYMNTS has found that consumers who live paycheck to paycheck are reassessing spending on everything, including health and beauty products.
Our data found that just 36% of paycheck-to-paycheck consumers who have issues paying their bills purchased beauty or cosmetics products. For consumers who live paycheck to paycheck but don’t have issues paying their bills, that number rose slightly to 42%.
Other factors have hurt the industry as well. Estee Lauder announced an 11% drop in quarterly sales early this month, attributing the decline in a reduction in the level of products that retailers are willing to keep on their shelves and in warehouses, as well as continued headwinds from China and currency-related issues.
As PYMNTS noted at the time, the company’s stock has seen a year-long slump that has split Estee Lauder’s valuation in half to $69 billion. That follows a trend seen at other high-profile makeup brands this year as investors shifted away from cosmetic companies.
Not every makeup brand had bad news. Sephora remains a bright spot for struggling department store chain Kohl’s, which announced earlier this month it will expand the Sephora in-store shops to all its locations.
Kohl’s has said it plans to add 250 more of these store-in-store concepts next year, bringing the total to 850, while also debuting a version with a smaller footprint for its remaining locations.
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