The Estée Lauder Companies is moving forward with plans to sell off some of the underperforming brands as the cosmetics giant looks to reclaim industry relevance and continued sales growth.
Too Faced, Smashbox and Dr. Jart have been shopped around to potential buyers in a package deal for a price estimated in the low nine figures, according to two people familiar with the talks. Investment banks Evercore and J.P. Morgan are running the sale process and have primarily approached large private equity firms, the people said. Estée Lauder Companies did not respond to requests for comment.
Estée Lauder tapped Evercore to review its 25-brand portfolio in January 2025, shortly before chief executive Stéphane de La Faverie announced the company’s “Beauty Reimagined” plan, aimed at reversing years of declining sales with product innovation and better marketing.
Those efforts have focused primarily on the company’s namesake label, as well as big brands like MAC Cosmetics and Clinique, most of which have been part of the conglomerate for decades. Other businesses, including the hair care arm, which includes Aveda and Bumble & bumble, were seen as potential candidates for a sale, according to industry insiders, though Estée Lauder appears to be holding onto those lines.
The three brands up for sale were all purchased during Estée Lauder’s acquisition spree in the 2010s, when the company was on the lookout for then-trendy, youthful brands to gain a foothold with the next cohort of consumers. But Smashbox and Too Faced failed to keep up with changing tastes, and have lost market share to newer entrants like Rhode and Summer Fridays. Meanwhile, Dr. Jart has been unable to find its place in a category disrupted by K-beauty’s second wave.
Any sale would likely come at a steep discount. Estée Lauder paid $1.45 billion for Too Faced alone; even with its Better Than Sex mascara franchise still going strong, the brand is unlikely to fetch anywhere near that.
Selling the brands in a package deal would likely be more advantageous, giving the group both agility and room on the balance sheet to purchase more brands, which the business needs to court new shoppers and increase its digital footprint. Similar thinking was behind Shiseido’s sale of its cosmetics arm – Laura Mercier, Buxom and Bareminerals – to the private equity firm Advent International in 2017.
But there are fewer buyers and more sellers in today’s market. Many beauty companies, including rivals Coty and L’Oréal, are also looking to clean up their portfolios, and newer brands like Makeup by Mario, Kosas and Merit are looking for buyers as well.
Building A Stronger Foundation
Since de La Faverie took the helm at Estée Lauder a year ago, the company has made improvements in its overall positioning.
Key brands are easier for consumers to find, with several launching on Amazon, and MAC Cosmetics will enter Sephora this year. In October, the company reported a 3 percent increase in organic net sales for the three months ended Sept. 30, its first sales increase in four quarters. Fragrance sales were a standout with a 13 percent uptick for the quarter but makeup declined 2 percent.
Though fragrance is the hot category of the moment, the beauty industry, and Estée Lauder in particular, are built on colour cosmetics and skincare. While MAC and Clinique have made inroads with splashy campaigns, relevant faces and viral products, their respective turnarounds are still tentative. Estée Lauder must offload its tired businesses in order to fix its core.
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