Monday, May 17th, 2010

Smashbox to be Acquired by Estee Lauder Companies

Today, Estee Lauder Companies announced that they will be acquiring Smashbox Cosmetics.  The acquisition is expected to finish in July 2010.  Snippets from the press release below…

The Estée Lauder Companies Inc. (NYSE: EL) announced today that it has signed a definitive agreement to acquire Smashbox Beauty Cosmetics, Inc., a privately held, photo studio-inspired prestige cosmetics company based in Los Angeles, California. The acquisition is expected to close in July 2010, subject to certain conditions, including regulatory approval. While terms of the deal were not disclosed, the Company said that the transaction is expected to be accretive to earnings in fiscal year 2011, before transaction and integration costs.

“The Estée Lauder Companies is the ideal home for Smashbox,” said Dean Factor, co-founder and Chief Executive Officer, Smashbox Beauty Cosmetics, Inc. “The Company possesses the scale and vision to help transition Smashbox into its next phase of growth, and its track record of nurturing and growing prestige brands is second to none. Moreover, we share a similar cultural heritage and dedication to consumer-inspired innovation and creativity. We expect to benefit greatly from The Estée Lauder Companies’ extensive knowledge in product development, operational execution, and international marketing and distribution, and we look forward to the next great period of growth for the brand.”

The Estée Lauder Companies will collaborate with the Smashbox organization to develop a comprehensive integration plan to transition Smashbox into The Estee Lauder Companies’ family after closing. Dean Factor, co-founder and Chief Executive Officer, Davis Factor, co-founder, Chief Creative Office and celebrity photographer, and Budd Taylor, President, will each play key roles with respect to these activities and the continued success of Smashbox. Smashbox will continue operating out of its Los Angeles, California office.

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51 thoughts on “Smashbox to be Acquired by Estee Lauder Companies

  1. JoElla

    NOOOOOOOOOOOOO!

    I wonder what will Holly do??

    • Hey all just wanted to drop in and give you an update on the bigs news over here at Smashbox Cosmetics. :}
      It’s true! Smashbox and Estée Lauder area joining forces! While we here at SBX can barely sit still long enough to type this because we’re so incredibly excited, there are still some standard conditions that must be met before the acquisition is completed. We expect that should all be sorted out by July. In the meantime, it’s business as usual. One of the things that Estee Lauder loves most about Smashbox is our unique, independent personality. We’ll continue to be a studio-based cosmetics line; we’re staying at Smashbox Studios (in L.A.) which is the heart and soul of our brand, and we’re going to continue to do what we do best which is creating innovative products and sharing our knowledge with all of you. Only now? We get to have a lot more resources to work with. Pass the champagne!

  2. Danielle

    Hooray for having smashbox @ CCOs in 2011!!

  3. Adriana

    Sweet. Does that mean Smashbox stock will be added to CCO’s? Hmmm.

  4. HC

    Sweet, that means Smashbox products will start showing up at CCOs soon enough!!

  5. Hmmm… I wonder how much it cost? That’s all I want to know! :P

  6. Claudia

    Great. I’m expecting watered down formulas, limited edition collection, galore, tampering of colours, gimmicks by the bucketload, and overall drop in quality and a raise in quantity for the sake of increasing sales.

    I’m boycotting.

    • Claudia

      Oops, i meant “limited edition collections galore.” But you guys get it.

    • JC

      I am in total agreement. I don’t think anything really great is going to come from this sale. Things will be great for a while (to keep that customer base) and then things will go downhill…just like with MAC, I wish EL had put more money into saving Prescriptives AND hadn’t sold Stila.

    • Sarah

      I can’t agree more. I was heartbroken when I heard this. I worked for MAC for quite a few years and watched the “Lauderization” of the line, and finally had to leave when the products had been cheapened to the point where they were unusable (especially the LE stuff) and they began eliminating all kinds of wonderful core brand products so they could constantly introduce endless Limited Edition junk.
      Also, the “artists” were just pushed to meet agressive sales goals, with artistry given only a cursory mention. Sadly, most of the real artists have either left or been fired, and replaced with your typical sales droid.
      I had been using a few Smashbox products, but did really use anything I can’t find in other brands, so boycott it, I will.

  7. ANA

    will that mean that they will still be using animals for testing?

  8. karen

    I guess this means no more Smashbox in Ulta?

  9. Rawrzellers

    This really is sad to see Estee Lauder pretty much eating up all the companies. I am planning to make and start my own brand, and I don’t think I would ever sell it to anyone no matter how popular or un popular it was. I’m really saddened to hear that Smashbox will now be just another part of their empire.

  10. Jenny

    First thing I thought of was the cco also… I’m all for it

  11. I can get my primer at CCO….maybe…
    I hope they do continue making KITS though….Thats affordable make-up in kits…

  12. Alexis

    So does this mean we’ll eventually find Smashbox at The Company Stores too along with MAC, Bobbi Brown and Prescriptives?

  13. Profile wp-user-avatar wp-user-avatar-60 alignnone photo of Dini Dini

    It is good opportunity for Smashbox to expand, I guess, but I feel like it is a bummer for some reason. I like some Smashbox products. Just have to wait and see what changes in terms of quality, formulas, and pricing with the aquisition.

  14. Emmalina

    I’m sorry, everyone, but what is CCO’s??

    • Cosmetic Company Outlets :) They’re owned by EL and basically offer discontinued or older limited edition overstock from EL brands at 20-30% off. They’re usually found in outlet malls!

  15. Madelynn

    I can’t lie, I’m pretty upset about this.

  16. Julia

    Not happy about this. I often hear that MAC went really downhill in quality after being bought my EL, and I don’t want Smashbox to go the same route.

    • I’ve heard people say this, but EL bought MAC in 1998, and TBH, I have seldom heard from people who were avid MAC users pre-1998. Personally, I thought MAC did some really fantastic products and collections in 2004-2007, and EL had already owned them for several years at that point. I only started to use MAC in 2004ish, so I really couldn’t tell you from personal experience.

      • Cynthia

        i don’t agree that MAC went down in quality during the takeover and i’ve been buying MAC since maybe early 90’s (whoa, makes me feel old, but i was in high school :)). it’s always been very pigmented, and the lipsticks rocked it since the beginning! i had to give up the studio fix powder since it was harsh on my skin as it was originally intended as “studio” makeup. the quality however, was just the same yet more exclusive of course.

        although, i agree with others when you see a smaller company get taken over by a mega one where sometimes gears do change. for MAC, i’d say it was for the better since u now see how popular and wide-ranged it is.

        • Great to hear from a long-time user :)

        • JC

          In my opinion it isn’t so much the quality of product that has gone down I think it is the quality of creativity. Lately MAC has been discounting products in their range of powders and foundations which as a women of color really pisses me off. The collections that they come out with aren’t anything original product wise. To go from Paints to Paint Pots, why…The Paints in the tube we fantastic…totally different than the Paint Pots. Are you saying that in todays market they can’t be room for both. Same with shadestick vs. greasepaint sticks. Just an amped up version…Other than MSF what has been a really ingenious product that MAC has come out with and kept part of their Permanent line for more than two years?

  17. Nik

    Can’t get any worse than the quality of SB now. The used to be very good, but since they changed and now everything is made in China it went downhill. EL can only improve the quality of SB products imo.

  18. GOOD NEWS FOR ME! That means Smashbox will be available at Estee Lauder warehouse sales! ..hopefully..

  19. BF

    To me this is simply extremely sad news. Just like the previous comments, I think the creativity will never be the same. Even if the Factor’s brothers will still be around, EL just thinks in profits and not in delivering true customer value. The only brand that I like from EL is MAC, every other brand they have doesn’t have the cutting edge and differentiation that you need in the industry. In addition, lets not forget when they bought Stila from Jeanine Lobell and they threw away what made the brand special; they could not keep the innovative spirit and make the brand grow and thus they had to sell it. In short, its truly sad to see that one of my favorites brands ever is going to be swallowed by EL and like with any other EL brand, I wont buy the products anymore. VERY SAD! EL please stay away from the brands that beauty product consumers really like…PLEASE!!!!

  20. Mirna

    Well, if EL guides Smashbox the way they have with MAC then I say that is a great for us consumers. The only thing that concerns me is that EL doesn’t change Smashbox’s most popular products.

  21. Estee Lauder is such a hoarder. Honestly. Are they planning to buy the entire cosmetics industry?

    I love the companies that are under them but seriously, they don’t need to monopolize every cosmetic company out there! I think they already half of them in North America!

  22. Profile wp-user-avatar wp-user-avatar-60 alignnone photo of Crystal Crystal

    I was expecting some merge to happen with EL seeing as how Prescriptives is no longer. :( Couldn’t of guessed it would be with Smashbox though.

  23. Lexus thomas

    Good I hope that the customer service will be better with the new company ! because Smashbox did not care that a loyal customer was out a lot of money and only wanted the products replaced !!!!! what a big mistake, in these hard times you need to listen and take care of your customers !!!

  24. Profile wp-user-avatar wp-user-avatar-60 alignnone photo of Anne Anne

    I’m surprised. I don’t see what Smashbox adds to the EL empire. The other lines they’ve bought and run successfully have their own “personalities” (MAC=younger demographic, color taxonomies, splashy LE collections; Bobbi Brown=older demographic, natural look). I own some SB products and like them, but I don’t see the line as being notably different from any other. In fact I often confuse it with Stila, another line EL bought, had no success with, and sold.

    • Carianne

      They don’t. The Factor brothers are GREAT businessmen. They are in this business not like people like Laura Gellar, Urban Decay’s Wende Zomnir, or Nars’ Francoise Nars (people who actually have a passion for cosmetics)… they are in it because they had an in with their family name and have never had the creative backing for this brand. It’s literally a business to them, so it’s no surprise they would sell to Estee Lauder. I doubt brand image and quality are high on their scale of priorities at the moment.

  25. igswonderworld

    ooh just in time!! This gives me extra boost to use my energy towards working for them :)) They have to get mee!!

  26. Beth

    I have not been impressed with some of Smashbox’s products, they have a lot of “blah” items, but there are a few that I just love. Hope they don’t discontinue or reformulate PhotoOp or Halo powder. (Or raise the price, it costs a fortune already!) It will be interesting to see if they continue the “photo” themes.

  27. jennifer

    Wowz estee Lauder i owning everything, from M.A.C to clinique to bobbi brown and now smashbox!!! but i live in Australia so i can’t get Smashbox anywayz, unless i go to america for holidays =[

  28. The first thing I thought about this was Smashbox @ CCO! While I am excited about Smashbox heading over to CCO stores, I wonder how the quality of their products will remain after being bought from Estee Lauder.

  29. Jeff

    Why did Estee Lauder Buy Smashbox? the answer is simple. Lauder is really scared of the success and growth of Sephora. Smashbox is one of Sephora’s top selling, inovative lines and Lauder wanted a piece of it. The Lauder companies will now control one of Sephora’s top lines and call most of the shots. I wouldn’t be suprised if Sephora pulled Smashbox now. Remember.. Sephora is owned by Louis Vuitton which also owns dior, benefit, MUFE, givenchy, and marc jacobs. Estee Lauder wants to remain the top dog.

    • Nunuiviet

      Hey hey love battle between giants industries! It’s David vs Goliath hhahahahahaa that is all about business, eat or be eaten!

  30. Ellen K

    Looks like I need to buy more Suntan matte bronzer before EL tampers with it! So bummed, I recently started getting into Smashbox

    I’m not sure if I should wait for it to hit CCO’s or not

  31. Lindsey

    Wait, I’m confused. Is Estee Lauder buying out Smashbox? Our is Smashbox buying out Estee Lauder?

  32. Heather

    I recently noticed a change in my Halo powder. It used to be a perfect match for my skin tone…now it’s orangy on me and does not match at all. I closely examined the packaging of my new powder and noticed it now says Dist. Smashbox whereas it used to just say Smashbox. I take this to mean Smashbox now only distributes their makeup and does not make it. Whether or not there were supposed to be any changes to the makeup…there most definitely were. I am EXTREMELY disappointed in the current Halo powder and now have to figure out something else which won’t be easy. I will not be looking at the Smashbox counter or the Estee Lauder counter for the replacement.