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L'Oréal Dives Into the Multi-Cultural Market With Carol's Daughter Acquisition

The all-natural beauty brand reportedly brought in sales of $27 million last year.

Estée Lauder isn't the only beauty giant shopping around for acquisitions. Just a week after the company signed a deal to purchase the niche perfumer Le Labo, rival L'Oréal announced Monday that it too has inked an agreement to acquire a small-scale brand: Carol's Daughter, a multi-cultural hair, body and skin range with a focus on all-natural ingredients.

Why is the purchase significant? For starters, because it represents an investment in appealing to a racially diverse customer base. In fact, as L'Oréal USA president and CEO Frédéric Rozé put it in a statement, "This acquisition will enable L’Oreal USA to build a new dedicated multi-cultural beauty division as part of our Consumer Products business, and strengthen the company’s position in this dynamic market." So, really, Carol's Daughter is foundational in building out this important side of L'Oréal's business.

A rep for L'Oréal declined to comment on the price tag of the deal, although according to a release, Carol's Daughter had sales of $27 million in the 12 months ending September 30 -- right around the same size as Le Labo, whose estimated sales are in the range of $20 to $30 million. While that's small relative to L'Oréal's multi-billion dollar business overall, the purchase is a jumping-off point for a division that the company is clearly planning to grow significantly over time.

The buyout came at a great time for Carol's Daughter: The brand closed all but two of its seven stores last April and filed for bankruptcy. At the time, CFO John D. Elmer told the Wall Street Journal that most of the stores had been unprofitable since 2010.

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Carol's Daughter, which was founded in 1993, will remain in its New York, operating under the same management.