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What’s happened
Spanish conglomerate Puig, owner of brands including Rabanne, Carolina Herrera and Charlotte Tilbury, has acquired fast-growing German skincare brand Dr Barbara Sturm for an undisclosed amount. Sturm, who founded her namesake company in 2014, will retain a minority stake and become chief product development officer and brand ambassador, Puig said in an announcement on Thursday.
Why now
Last year, Puig said it would pause on its M&A activities following a spree. “As a private company, we can only finance acquisitions with the resources we generate,” Puig chairman and CEO Marc Puig explained to Vogue Business in March 2023. “We have made two significant acquisitions in the last three years [Byredo and Charlotte Tilbury] and we now need to strengthen the balance sheet again.”
However, its rivals have remained on the M&A trail — last year, Kering acquired fragrance brand Creed and L’Oréal purchased Australian cosmetics brand Aesop, among other deals — putting pressure on Puig to reach and maintain critical size to remain competitive. Puig is still small compared to the big luxury groups and beauty pure players, and has gaps in certain key-growth categories and geographies. It needs to tap into these to hit its target of €4.5 billion in full-year net revenues by 2025, up from €3.62 billion in 2022.
In particular, competitors are rushing into ultra-premium skincare: L’Oréal, for example, has repositioned Carita as a higher-end brand with products above the $300 bar, following a similar shift for Helena Rubinstein. “The largest beauty category is skincare, and that’s the one we are less exposed to,” Puig said in March. Other competitors in the space include Beiersdorf-owned La Prairie (€655 million in revenue in 2022, per Beiersdorf) alongside independent brands, such as Augustinus Bader, who are also flexing their muscles.
Why it matters
This marks a strategically important deal for Puig, albeit smaller than its blockbuster acquisitions of Byredo in 2022 (after a very competitive auction with L’Oréal among others) and Charlotte Tilbury two years earlier. (Both deals were reportedly valued at approximately $1 billion, although Puig has not commented on the figures.) According to a WWD report, Dr Barbara Sturm is said to generate annual sales of around €70 million. Puig declined to comment.
Dr Barbara Sturm has a cult following, having built on the German doctor’s medical credentials to tap into the science-based skincare trend. Oprah Winfrey invested in the brand last April after being introduced to its products by Stella McCartney. At a time when luxury brands are striving to provide experiential flagships for its customers, Dr Barbara Sturm already has seven standalone spas worldwide. “It’s the first big move of Puig in high-end skincare. They are starting with a brand with strong scientific credentials that innovates a lot in terms of products and with a proven retail concept. It’s a good move,” Mario Ortelli, managing director of consultancy Ortelli and Co, explains.
Dr Barbara Sturm’s US presence was another factor in the sale. Five out of the seven spa locations are in the US (including Miami, Los Angeles and Dallas) and she has a large celebrity following there, with fans including Hailey Bieber and Kim Kardashian, who shared an Instagram photo of Dr Barbara Sturm’s signature treatment, the vampire facial.
“We are very excited to welcome a brand of the calibre of Dr Barbara Sturm to our [portfolio of] brands,” Puig said in a statement accompanying the announcement. “With its science-focused skincare product range and high-performance treatments, we are taking another important step in expanding our position in the premium skincare segment. The new partnership reinforces the Puig skincare segment and our presence in the US.”
“Puig has a proven track record of a competitive and disruptive approach to business and, by leveraging Puig’s experience in nurturing founders and fostering the global success of their beauty brands, we are primed to introduce our skincare products to wider audiences,” Sturm said in a statement. “This collaboration will fuel us to continuously push boundaries, craft high-performance treatments, and elevate the skincare experience.”
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