Home-grown skincare brands get makeover from bigger players

Mergers and acquisitions are in vogue in the skincare segment with home-grown skincare brands getting a facelift courtesy their new owners. Lack of volumes and weak distribution has led to the acquisition of a few struggling skincare brands such as Nomarks from Ozone Ayurvedics and Cheryl’s Cosmeceuticals respectively by bigger players such as Bajaj Corp and L’Oreal recently.

While it has not been easy for domestic players to let go of their nurtured skincare brands, they are looking forward to building distribution muscle with the help of the new owners.

Oscar Pereira, Co-Founder and Director, Cheryl’s Cosmeceuticals, says, “L’Oreal will help Cheryl’s business grow quickly. It was always my dream to take Cheryl’s cosmetics to the international market and L’Oreal will help in doing that. My brand has also been more restricted to the western markets and L’Oreal will also help in taking it pan India.”

Claiming to have sold his brand at more than five times its current sales turnover, Pereira would also be handholding Cheryl’s and retained as a consultant for the next three years with L’Oreal. “Since I had the expertise in formulating Cheryl’s with its herbal action ingredients, L’Oreal will need a hand to market the brand as it is not strong in the professional skincare segment,” he says.

At the same time it would also give the French multinational the benefit of entering the segment with a relatively cheaper brand which would complement its high end skincare brand of ‘Keraskin’. “Cheryl’s is a value-for-money brand and its positioning as an international quality product at Indian prices will fit into L’Oreal’s portfolio,” adds Pereira.

Cheryl’s Cosmeceuticals reached out to just about 10,000 salons. L’Oreal will help it scale up across its 40,000-odd salons across the country.

Another domestic player Ozone Ayurvedics had been getting feelers from big players such as Dabur but finally decided to sell its Nomarks anti-blemish brand to Mumbai-based hair oil major Bajaj Corp.

S.C Sehgal, Managing Director, Ozone Ayurvedics, says, “We were the creators of the diminishing marks category with Nomarks and believe the new parent of the brand will do a better job with their distribution muscle. Skincare is a competitive category and one needs large spending power.” Bajaj Corp, the new owners of Nomarks, will be riding the brand on its own extensive hair oil distribution network which reaches out to 2.7 million outlets. In fact, high distribution costs were eating into the revenues of Nomarks which Bajaj Corp will now reduce as it already has a ready network and sales force.

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