L’Oréal’s Carol Hamilton on Her Approach to Acquisitions

Carol Hamilton has some advice for brand founders.
L'Oréal's group president of acquisitions shared insights on her approach to acquisitions, what brand founders should be paying more attention to and what she sees as the future of beauty.
Hamilton, who stepped into the newly created L'Oréal role in July, opened the talk by sharing some advice to brand founders.
"What makes new, different and better, and can you explain that in just a couple of sentences, ideally one, so your investors, the strategics and most importantly, your consumers get it," she said.
Asked what L'Oréal looks for in new brands, Hamilton said the company is interested in new business models in addition to great product ideas and new categories.
"We want to buy complementary brands, we don’t want to fill a space that we’ve already filled," Hamilton said. "We’re looking for that not only as it relates to a product idea or a category idea but also new business models. The market is changing so quickly, the way the consumer shops, so that very often, a brand’s business model will attract me and the company more than the product itself — even though product will always be queen and has to reign supreme. But once you have that fantastic product, the business model can be extremely compelling to us.”
L'Oréal, she said, looks to acquire companies and brands that are between $25 million and $50 million in size, with double-digit profitability.
"We believe strongly in the importance of profitability and then bringing something that is new to us, where we’re going to learn more from you than maybe you will learn from us," she said.
And whereas some are forecasting a slowdown in M&A, Hamilton is hopeful.
“If you measure the number of deals that have been consummated, yes, there’s been a slowdown," she said. "If you measure the activity, the number of brands, the interest level, the competition that is out there, we are at an all-time high of furious pace and interest. It’s going to continue.”
She also advised founders to focus on building their e-commerce platforms separately from those of their retail partners.
"So many founders will go along with the retailer dot-com, which is a very good way to become digitally savvy, but it is not the same as owning your own database and really understanding your consumer," she said.
Asked for where she sees beauty heading, Hamilton pointed to wellness.
“Beauty is going to be much bigger because beauty is tapping into tech, but also tapping into a much bigger part of our lifestyles, whether it’s how we work out and the products that we need, how we eat, what we eat, and the nutrition associated with it and what we want to put on our bodies as a result of it," she said. "I see this expansion of beauty into health, wellness, athletics and everything associated with the way a woman lives her life. Meditation, all of those things are going to influence the way we look at beauty going forward. We can’t just look at the traditional categories of the past or we’ll be stuck in a rut.”
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