Women’s Wear Daily | The Price of Beauty: How Much Are Investors Willing to Pay?

Apr 2024

Originally posted by Women’s Wear Daily on April 12, 2024.

Many beauty brands are starting to explore deal options. With several different brands in the same market category, this could mean many different things for valuations.

Ashleigh Barker, Director in Lincoln’s Consumer Group, commented, “We really are coming off of what was a peak valuation period. The notion that A-plus assets will continue to get A-plus valuations absolutely still holds true, but there also continue to be higher thresholds for getting through diligence.”

With the uncertain economy, investors are being more selective and taking into consideration several factors with each purchase.

“[Private equity buyers] truly need to have that conviction that the numbers match the business or the valuation matches the business, and believe that there’s going to be that future exit opportunity with the right set of buyers and based on what the business thinks they can achieve,” Ashleigh said.

There is a disparity in valuation expectations. Many founders still think they can achieve a very high valuation of three to five times their revenue, but that is no longer the case.

View additional insights in the original article.