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The Dealmakers: The transactions of these business leaders transformed fashion and beauty.
Since taking the reins of Australian skin-care brand Aesop in 2003, CEO Michael O’Keeffe has been on a mission to grow the brand from an indie, salon-driven company to a luxury skin-care giant.
Twenty years later, Aesop is on the growth path O’Keeffe had always envisioned for the company. In April, the luxury skin-care brand made headlines when its then-parent company, Natura & Co., signed an agreement to sell the brand to cosmetics company L’Oréal. The acquisition, valued at $2.53 billion, made history as L’Oréal’s biggest acquisition to date, and the deal was completed on August 30. In May, Aesop’s reported first-quarter 2023 revenue under Natura & Co. was $7.88 million, up 9.2% year-over-year.
“We’re growing, generally, at double the global rate of the market, so around the 20% mark. Aesop’s been profitable for more than a decade, and we’re still experiencing strong growth in all the markets that we trade in, which is about 24 markets directly now,” said O’Keeffe.
Under the L’Oréal umbrella, O’Keeffe has plans to expand Aesop into new markets, upgrade its product assortment and stay true to its core of community, while supporting social causes and sustainability.
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“On the back end, [L’Oréal] can really help our research and development and product development teams formulate products that [satisfy] global compliance. It can also provide the [necessary] backing platform as we grow and develop across across the globe,” O’Keeffe said.
Part of Aesop’s global expansion includes a focus on Asia. According to O’Keeffe, Asia is currently Aesop’s largest market, accounting for about 50% of the brand’s business. Japan, specifically, is Aesop’s No. 1 market, while China is its fastest-growing market. Aesop opened its first physical store in China in November 2022.
“We have a strong connection [in Asia], in terms of the brand, the customer service and the aesthetics,” O’Keeffe said. “What we focus on is formulating the best possible products we can, and the Asian customer is a very sophisticated customer, particularly in skin care. Quite frankly, they see through a lot of the noise that’s out there with other brands, and they understand our principles, in terms of formulating and the product.”
O’Keeffe said Aesop is also prioritizing retail expansion in the U.S. market, which is the most recent region it entered, in 2010. This year, the company opened four additional stores in New York City, and it has plans to open up a location in Seattle, Washington in 2024. Currently, Aesop has around 90 stores across 16 states.
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According to O’Keeffe, each store caters to the consumers in its specific community. That approach has worked to increase brand awareness and build consumer loyalty, he said.
“We take a very different approach [with our marketing efforts],” he said. “It’s not just celebrity endorsements and promotions; it’s about inviting people into the world of Aesop, from a product perspective. But it’s also about our stores, our connection to communities, the causes we’re supporting and our broader view on the world.”
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