Core Insights - Aesop's first store in mainland China, located on Dongping Road in Shanghai, is set to close on May 10, 2023, just two and a half years after its opening in November 2022 [3][6] - The closure marks Aesop's first store shutdown since entering the mainland market, attributed to the expiration of the store lease without a renewal [3][6] - Aesop was acquired by L'Oréal for $2.525 billion in 2023, with expectations for growth in the Chinese market, which was previously identified as the fastest-growing region for the brand [3][6] Company Performance - Aesop has been a significant contributor to L'Oréal's performance, with double-digit revenue growth reported in the first quarter following the acquisition [6] - Despite the growth, the high-end cosmetics division, which includes Aesop, showed signs of fatigue with a revenue increase of only 2.7% year-on-year in 2024 [7] - The North Asia market, where China is included, was the only region to report negative growth for L'Oréal, presenting challenges for the brand [7] Pricing and Market Dynamics - Aesop's pricing strategy in China has been criticized for being high, with significant price discrepancies noted compared to Japan, where products are cheaper [7][8] - Aesop recently increased product prices by 10% to 30%, with some items seeing substantial price hikes over the past five years [8] - The closure of the flagship store is seen as a warning signal amid a cooling high-end consumer market, indicating a shift towards more fundamental retail practices [9]
Aesop大陆首店将闭店，欧莱雅高端个护布局受挫