L'Oreal acquires major salon hair care provider

L'Oreal USA said that the company would be integrated into its Professional Products division, adding to the addition of Beauty Alliance, another professional beauty hair care provider, which the division bought up last April. Maly's West supplies 30,000 hair salons in the western region of the United States, with business operations that include 340 representatives and more than 100 points of sale, helping it to achieve a turnover of $187m in 2006. The acquisition of the business is expected to positively impact the company's financial results in the course of the 2008 financial year, providing all regulatory and legal matters are finalized. L'Oreal added that the acquisition of the two salon hair care businesses complemented its business plan to increase its footstep in the US salon hair care market, stating that the combined capabilities of the company with the specific capabilities of salon brands was a strong addition to the business. The fact that the world's leading cosmetic player is increasing its foothold on the US market for professional hair care, is indicative of both the fragmented state of this segment of the market, combined with the increasing value it also represents. More and more people are buying hair care products when they visit US hair care salons - consumers that are willing to pay the premium price charged for such products in return for what they perceive to be a better quality and more effective product. Likewise, this trend is leading to a significant move towards consolidation within the segment as bigger players try to buy up smaller players in an attempt to drive growth. Recent consolidation has included personal care player Helen of Troy buying up Belson Products, the professional hair care brand of Applica Consumer Products, while, on a far larger scale Alberto-Culver recently spun off its Sally Beauty salon division in an attempt to better position it for future growth. That move by Alberto-Culver followed the failure of its proposed buy-out of leading global salon products supplier Regis, which collapsed last year, costing Alberto-Culver $50m in compensation payments to Regis.