The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
The British e-commerce group said Wednesday it had agreed to acquire the digital beauty retailer from private shareholders, including Net-a-Porter co-founder Mark Quinn-Newall and Cult Beauty co-founder Alexia Inge.
The deal is the latest sign of consolidations in the UK’s sizeable prestige beauty market. Last month, LVMH-owned Sephora acquired rival beauty e-tailer Feelunique for £132 million ($184 million). The addition of Cult Beauty to THG’s portfolio, which already includes e-tailer Lookfantastic and beauty brands like Illamasqua and Eyeko, will bolster its already-strong position in the market.
Cult beauty, founded by Alexia Inge and Jessica Deluca in 2008, is well-known among British beauty enthusiasts for its careful curation of hot indie brands and in-demand prestige labels. Around two thirds of the names stocked on Cult Beauty are currently not available at THG’s other beauty sites, according to the group.
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Inside Britain’s Fastest-Growing Beauty Business
Online make-up haven Cult Beauty is projected to hit £100 million in revenue this year.
By selling existing formulas under their own name, retailers can tap into the lucrative beauty market without investing in custom formulations. But that doesn’t mean the private label model is an easy win.
The San Francisco-based company is hoping to tap growing consumer demand for financing for cosmetic treatments among other services.
Once thought of as long-term disruptors who would change the way we shop forever, multi-brand online retailers that sell cosmetics, skincare, fragrance and more are facing multiple headwinds.
Prestige makeup is fashion’s category expansion du jour. But even the market’s most powerful players could learn a thing or two from its celebrity-backed competition.