Butter London specializes in nail products such as lacquered finishes, and has significant links with the world of high fashion.
Neither company would confirm the reported talks, with Estee spokepeople stating that they would not comment on the rumors.
BL’s CEO Leslie Freytag stated: “With small companies like ours, there always seems to be rumors. At this point, we don’t have any comment.”
Gaining a lead in color cosmetics
According to Freytag, the company is now second in the prestige nail category after Chanel.
Estee therefore stands to gain a significant lead in developing its colour cosmetics division through this acquisition. The company recently posted good increases in makeup sales in its Q1 results for 2014, although results were not as strong as for other divisions such as hair care and fragrance.
About Butter London
Butter London describes itself as being “synonymous with all things rock and roll, Great Britain and fashion.” It has released numerous Brit-based cosmetics collections, including its recent ‘Royals’ collection, which is based around Kate Middleton and the Royal Jubilee.
The company has historically had a strong relationship with Fashion Week and describes its brands as being “created for the catwalk.”
Butter London also taps into the power of information by releasing make-up tutorial videos on their website.
Playing to Estee's strengths
Historically, Estee has been dominant in the prestige end of the beauty market, posting strong growth over the past two years despite the up-and-down performance of the overall luxury industry.
The company attributes its improved sales in make-up brands in 2013 to an improved environment for retailing and the strong performance of MAC cosmetics, a gain which was partly offset by certain heritage brands.
Estee have also recently rolled out popular brands in Africa to respond to demand in that region and increased disposable incomes in emerging markets.