Behind the Counter: The Conglomerates Controlling Your Makeup Bag

Consolidation on display

Walk into your local Sephora or Ulta and imagine dividing the walls by ownership. L’Oréal, Estée Lauder, Coty and LVMH together control most of the shelves.

L’Oréal alone manages 37 global brands, yet only three were created in‑house; the rest were acquired[7].

Coty lists more than 40 brands on its corporate site, ranging from Adidas and Burberry to Kylie Cosmetics and Sally Hansen[8].

Estée Lauder’s roster includes Clinique, M·A·C, La Mer, Jo Malone, Aveda and more[9].

This concentration means there’s roughly a 1‑in‑4 chance that the next product you pick up belongs to Estée Lauder and a 1‑in‑3 chance it’s owned by Coty.

These conglomerates control pricing, distribution and formulas across seemingly competing brands.

R&D vs. acquisition: following the money

·      Acquisitions dominate. L’Oréal invests more than €1 billion annually in research and development, yet its growth hinges on buying brands[7]. Estée Lauder paid $1.45 billion to acquire Too Faced in 2016[10]. Coty bought 51% of Kylie Cosmetics for $600 million when the brand had $177 million in trailing‑12‑month net revenue[11]. These deals provide ready‑made formulas and cult followings without years of R&D and marketing spend.

·      Launching is expensive. Industry insiders estimate that a robust indie beauty launch costs $100,000–$500,000+ for marketing alone, while a mass‑market launch by a large company can exceed $10 million[12]. By comparison, a $600 million acquisition that instantly adds a nine‑figure revenue stream can appear efficient.

·      Sunsetting products is strategic. After a takeover, conglomerates often keep one or two hero products and quietly discontinue the rest, reducing overlapping SKUs and focusing marketing dollars on proven sellers. This allows them to consolidate manufacturing and renegotiate supplier contracts.

Who holds the power?

Despite selling primarily to women, leadership remains male‑dominated. A study of beauty companies found that 65% of executive committee seats are held by men and 51% of companies lack ethnic diversity on their executive teams[13]. L’Oréal, Estée Lauder and LVMH all have male CEOs. Coty stands out slightly: after adding two women in 2020, seven of its 13 directors are women and three of five executive committee members are female[14].

Profit margins and consumer spending

Cosmetics are marked up 60–80% above wholesale; research firm Euromonitor pegs the average markup on premium cosmetics at 78%[15]. This means a product costing $5 to make may retail for about $9, and the difference funds marketing, retail overhead and profits.

Meanwhile, Americans spend an average $1,754 per year on beauty products and services; Millennials spend about $2,670, and Gen Z spends $2,048[16]. Men actually outspend women, averaging $2,256 per year compared with $1,283 for women[17]. Paradoxically, although men control most leadership roles, women still drive the majority of purchases and loyalty.

Visualizing your vanity

Picture your makeup drawer or a wall at Sephora:

·      25% probability that a random product is from Estée Lauder (Clinique, MAC, La Mer, etc.).

·      33% probability that it belongs to Coty (CoverGirl, Rimmel, Gucci fragrance, Sally Hansen, etc.).

·      40+ brands under Coty’s umbrella[8].

·      37 brands under L’Oréal, only three internally created[7].

The next time you’re seduced by new packaging, remember the same boardroom might approve half the products in your basket. Understanding these dynamics empowers consumers to seek out independent brands and ask harder questions about who profits from beauty trends.