The global beauty industry has been valued at over $450 billion by Mckinsey’s 2025 Beauty Report, making it one of the fastest-growing segments in the consumer goods market. This golden period of growth has been driven by consumers’ appetite for newness in a trend-led society, where new active ingredients and beauty buzzwords seem to launch by the minute.
This has resulted in a highly competitive and saturated market, with brands racing to expand their product lines while promising innovative formulations and a perfectly curated ‘world’ – one that invites their community into a crafted aesthetic and visual identity that reflects not just the brand, but also its founder and audience.
However, the cost and speed required to sustain this level of growth has become increasingly difficult for many brands to manage without external investment or the backing of established retail and distribution partners. With this in mind, many beauty brands have turned to mergers and acquisitions (M&A) as a strategic and commercially viable path forward.
Timeline of Brands Acquired In 2025
January:
- SKKY Partners, co-founded by Kim Kardashian, acquires a minority stake in luxury skincare brand 111SKIN
February:
- L’Oréal acquires a minority stake in Jacquemus’ new beauty line
April:
- Unilever acquires natural deodorant brand Wild
May:
- e.l.f. Beauty acquires rhode in $1B deal
June:
- L’Oréal acquires majority stake in luxury skincare brand Medik8
- L’Oréal acquires Professional hair care brand Colour Wow
July:
- Ulta Beauty acquires UK beauty retailer Space NK
- Reliance Retail acquires minority stake in UK facial fitness & Skincare Brand Facegym
- TSG Consumer’s acquires Founder-led Fragrance Brand Phlur
“Today it’s extremely hard to build brands from the ground up. The marketplace is fragmented and the beauty consumer is constantly evolving. These brands have built everything on really knowing, understanding and speaking to their customer – they’ve built desire and reputation – the hard work is done in some ways.
For groups, perhaps the investment and motivation to create from the beginning might not make business sense or be feasible within their current business or team structure. An acquisition brings the financial, infrastructure and experience fuel to take your baby from a niche and explode it globally. For the buyer, it’s an opportunity to build something greater that already has strong foundations, for the seller it’s the boost the brand needs to take it to the next level.” – Insights from Seen Group, a leading beauty creative agency, on the advantages of acquisitions from both sides.
Trends Within The Types Of Acquisitions
Downturn in DTC Growth
Data from Consumer Edge reveals that spending on beauty products via direct-to-consumer (DTC) channels has significantly underperformed in both the UK and US markets. Year-on-year, DTC beauty sales are down 10% and 7% in the US and UK respectively. In contrast, beauty distributors like Sephora and Space NK have continued to deliver strong, positive growth across global markets.
This growth discrepancy suggests the strategic importance of recent deals like rhode x e.l.f beauty. As founder Hailey Bieber noted, the deal “accelerated our ability to reach more of our community with even more innovative products and widen our distribution globally.”
More broadly, it reflects a key trend in 2025’s M&A activity: larger corporations see acquisitions as a way to rapidly access growth, brand equity, and fresh audiences (via unexplored or underutilised DTC channels), while independent brands increasingly require financial and operational backing to scale effectively. These dynamics are creating highly aligned, mutually beneficial partnerships across the industry.
Rise Of Performance-Led Beauty As A Purchase Driver
With economic uncertainty and disposable income pressures only mounting, beauty consumers are becoming more selective. They’re expecting products to do more, prioritising science-backed, results-driven formulations rooted in dermatology and innovation. Think simplified routines with fewer but more effective products.
As a result, shoppers are willing to spend more per product, but are buying less frequently and in smaller quantities. This shift has prompted large beauty conglomerates to acquire brands that add clinical credibility and innovation to their portfolios. Recent examples include SKKY Partners’ investment in luxury skincare brand 111SKIN and L’Oréal’s majority stake in science-led brand Medik8.
This focus on performance is also reflected in broader category growth. According to McKinsey’s 2025 Beauty Report, skincare is now the fastest-growing segment in the industry, accounting for 44% of the global beauty market, further evidencing why these skincare-led acquisitions are trending in the market.
The Shifting Value of Founder-Led Beauty Brands
While the past decade saw a surge in influencer-led beauty brands, many of which scaled rapidly, the tide is starting to turn. According to McKinsey’s 2025 Beauty Report, public-facing founders are now among the least influential factors in purchase decisions. In fact, only 13% of consumers surveyed cited the founder as a reason for buying a product – a notable drop from previous years when founder identity carried significant weight.
This isn’t to say that influencer-led brands can’t succeed. Brands like Rare Beauty, Summer Fridays and Naturium continue to demonstrate strong, sustainable growth. But today, success requires more than a familiar face, it demands clear brand alignment, credible product performance, and the ability to grow beyond the founder into broader, mainstream markets.
As a result, beauty conglomerates are now seeking influencer-led brands with distinct positioning, clear market differentiation, and data that shows potential for long-term growth beyond the founder’s reach. When these factors are in place, the opportunity and financial upside to conglomerates is significant, as seen in the recent high-profile acquisitions of Rhode and Phlur.
“A brand needs more than just ‘hype’ as this can often be fleeting and ephemeral. The consumer connection needs to be meaningful and deep-rooted, transcending specific product launches or innovations. That audience might be small, but the potential for growth needs to be proven.” – Insights from Seen Group, a leading beauty creative agency, on what defines a successful beauty brand.
What This Means For The Industry And Consumers
Greater Product Accessibility
As more independent brands are acquired, they gain access to global distribution networks and high-traffic retail partners. Brands like rhode are now expanding into new regions through both e-commerce and in-store partnerships, making products more accessible than ever. This broader reach also increases competition in local markets, giving consumers more choice and diversity across price points and categories.
Faster Innovation & Product Expansion
With deeper capital and operational support, acquired brands can invest more aggressively in R&D, scale manufacturing, and launch products at a faster pace. The result is a surge in product innovation, updated formulations, and expanded category offerings both vertically and horizontally. For consumers, this means an increasingly saturated beauty landscape, with brands racing to deliver the next big thing.
Risk Of Brand Dilution
However, as once-independent brands become part of larger corporate ecosystems, there’s risk of dilution in product formulation, pricing strategy, or overall brand ethos. Wild, a natural deodorant brand acquired by L’Oréal, faced consumer backlash due to L’Oréal’s historic record on sustainability and animal testing – values that originally defined Wild. These tensions highlight the importance of brand integrity post-acquisition.
Ultimately, M&A is no longer just a financial lever. It’s reshaping the future of the beauty industry. For consumers, it offers greater access, higher-quality products, and a faster pace of innovation. For brands, it brings scale and sustainability. But for all parties, long-term success will depend on if the ‘heart’ of the brand remains unchanged.
