The game’s afoot in the beauty industry. Cosmetics giant Revlon recently made headlines when it repurchased a division of the company it had sold off a few years ago. Just goes to show that even in a not so hot economy, being beautiful has its benefits.
According to The Wall Street Journal, Revlon is getting back into the nail business – the gel polish nail business. Revlon is buying back the Colomer Group for $660 million dollars…over $300 million more than it sold it for over ten years ago.
Why is Revlon buying back something it sold a while ago? The Colomer Group, which is a salon products business, has been riding a growing nail and manicure trend to increased sales and a global presence.
In 2000, Revlon sold the Colomer Group, to a private equity firm, CVC partners, for $315 million dollars. CVC tried to sell the company, but couldn’t and instead ran it. The Colomer Group was able to latch onto a boom in the beauty business, especially in the nail and manicure industry. Between 2007 and 2012, Americans spent more – a lot more on manicures – up from $405.7 million in 2007 to over $1 billion in 2012.
Colomer, staying on the game, has also ridden the gel manicure trend. In 2010 it launched CND nail Shellac, a gel manicure product. Gel manicures are very popular right now, because a manicure can last 2-3 weeks, twice as long as a regular lacquer manicure. This is good news for gel color manufacturers, as consumers pay twice as much for a gel manicure than they do for a regular one. The Shellac product alone accounts for up to $70 million in sales for the Colomer unit.
Adding to the allure of repurchasing the unit is the fact that Colomer gets the majority of its sales from outside of the United States, giving Revlon the perfect way to springboard into global markets and diversify its customer base.