Why fragrance is booming in M&A

2026 opens with real movement in beauty deals. 

As first reported by The Business of Beauty, Estée Lauder is exploring a packaged sale of Too Faced, Smashbox and Dr. Jart to free up cash and refocus the portfolio. 

Who’s next? Colour fatigue is depressing makeup valuations, while fragrance, bodycare and haircare are drawing the most credible buyer interest, particularly from beauty conglomerates. 

Executive editor of The Business of Beauty, Priya Rao joins Brian Baskin and Sheena Butler-Young to unpack what this year of beauty deals has to offer. 

Key Insights:

• With Estée Lauder exploring a bundled sale of Too Faced, Smashbox and Dr. Jart, this portfolio reset signals a valuation reality check. The goal is to free up cash and refocus on culturally relevant, digital-native brands like The Ordinary and Le Labo. As Rao notes, “Deciem sells more skincare products than all of Estée Lauder’s other skincare brands combined,” and “Le Labo is also continuing to be on fire, even though Santal 33 has been around for 15 years.” 

• Colour fatigue is depressing valuations in makeup. Over the past few years, artistry and colour brands have gone to market to find a buyer, but quickly found a landscape already flooded with similar offerings. “There were so many colour brands on the market. People were waiting for the next great one, so they weren’t willing to make a bet on any of these brands until the full slate was out,” says Rao. The result was some colour brands being left in the market, on and off, for over a year. She explains: “It’s kind of like buying a house – why am I going to buy this house at a premium when I could be buying at a discount?”

• Fragrance, meanwhile, remains a booming, high-margin lane. “All these other beauty businesses – hair care, body and fragrance – are more incremental to a strategic,” says Rao. While private equity is trying across the board, Rao advises that “if you want L’Oréal, LVMH or Estée Lauder, you have to be in categories that add incremental value, rather than ones they’re still trying to figure out.”

• Haircare offers the clearest near-term upside for acquirers. “Amika has the number one or number two dry shampoo at Sephora,” and its move into Ulta taps “a huge haircare business because of their back bar program”, says Rao. In mass hair care, Not Your Mother’s, which has had its longevity questioned in the past, shows durability and runway. Focused on styling and texture, Rao notes that it “hasn’t even played with shampoo and conditioner yet – in mass hair care, that’s where you play to make the big bucks.”

Additional Resources:

• Exclusive: Estée Lauder Companies Has Put Three Brands Up for Sale | BoF 
• Prestige Hair Care’s Shampoo Problem | BoF 
• Why Fragrance Is the Latest Red Carpet Accessory | BoF 

Hosted on Acast. See acast.com/privacy for more information.