L’Oreal purchases 100% stake in Stylenanda

Global beauty giant L’Oreal announced Thursday it has acquired a 100 percent stake in Stylenanda, a local fashion and cosmetics brand that developed out of a humble beginning as an online shopping mall.

This is the first time the French conglomerate has acquired a Korean brand.

Reports that L’Oreal had been chosen as the preferred bidder for the Korean company first emerged last month, but Thursday’s announcement was the first time that the deal was officially confirmed. The size of the deal was also larger than expected - initial reports had suggested that L’Oreal would buy a 70 percent stake.

The entire Stylenanda stake was owned by founder and CEO Kim So-hee. Kim will remain in the company as the chief creative officer, said a L’Oreal Korea spokesman, staying in control of branding.

Kim started Stylenanda as an online shopping mall in 2004, reselling clothes sourced from the Dongdaemun fashion wholesale market. The website is still around today, but Stylenanda’s main businesses is its cosmetics brand 3 Concept Eyes (3CE), which has a strong fan base in China and accounts for 70 percent of the company’s business. It also has products selling in Hong Kong, Singapore, Malaysia and Thailand.

“We are thrilled to welcome this cool Korean brand in the L’Oreal family,” said Alexis Perakis-Valat, president of L’Oreal’s consumer products division. “Stylenanda captures Seoul’s vibe, edge and creativity. It is perfectly positioned to nourish the growing appetite for makeup of millennials in Korea, China and beyond.”

The acquisition and transition of stocks will be finalized in the next two months.

L’Oreal said it plans to expand 3CE’s reach in the global market. Lisa Hong, a beauty and fashion analyst at Euromonitor International Korea, pointed out that 3CE has a “hip, colorful and young” brand that does not overlap with other L’Oreal’s brands, allowing the global company to expand its portfolio.

“International beauty conglomerates spread global influence by large-scale acquisition and Korean brands are on the radar,” she said. “Through M&A, global companies seek to penetrate in Asian countries, especially mainland China with the K-beauty identity.”

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]