On January 7, U.S. beauty conglomerate Estée Lauder Companies revealed that it has begun reviewing its brand portfolio. According to reporting by Business of Fashion (BoF), the company is exploring the potential sale of three of its brands: Too Faced, Smashbox, and Dr. Jart.
Sources familiar with the matter indicate that the three brands are being marketed not individually, but as a single package, with an estimated valuation in the range of several tens of billions of yen. If completed, the transaction would mark one of Estée Lauder’s most significant portfolio restructurings in recent years.
From High-Growth Assets to a Rebuilding Phase
All three brands under consideration were once regarded as high-growth drivers with strong brand equity. Estée Lauder acquired Smashbox in 2010, followed by the purchase of Too Faced in 2016 for approximately $1.45 billion. Dr. Jart was acquired in 2019 and positioned as a key pillar in strengthening the group’s Asia-origin skincare portfolio.
In recent years, however, sales momentum has slowed amid shifting consumer values, softer demand for makeup, and growing interest in skincare and wellness categories. Brands that expanded rapidly through social media, in particular, have proven more vulnerable to fast-changing trends and intensifying competition. As a result, these labels appear to have transitioned within Estée Lauder’s portfolio from former growth engines to assets requiring renewed investment and repositioning.
Reallocating Capital Toward Core Brands
Should the sale proceed, Estée Lauder would be able to redirect capital toward strengthening its core brands, accelerating research and development, or pursuing strategic acquisitions. Addressing slower sales growth in China and responding to heightened competition from emerging brands across both product development and marketing remain pressing priorities for the group.
At the same time, market observers note that executing such a sale may be challenging. In the current environment, more companies are seeking to divest assets rather than acquire them, and the number of buyers willing to take on multiple brands—along with the time and investment required to restore growth—is likely limited.
A Turning Point for the Beauty Industry
Estée Lauder’s move highlights a broader shift underway in the beauty industry, as companies transition from expansion driven by brand accumulation to a more selective, quality-focused growth model. Increasing the number of brands is no longer the primary objective; instead, determining where to concentrate resources and which markets to prioritize has become central to long-term value creation.
The company’s decision may also influence other beauty players facing similar portfolio challenges. Redesigning brand portfolios is no longer an exceptional measure, but an increasingly integral part of modern management strategy.
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