May 19, 2010, 2:46 PM

Estée Lauder acquires a cosmetics brand with social media savvy

With its planned acquisition of Smashbox Beauty Cosmetics, Estée Lauder Cos. is going after the youth market. Smashbox, which sells online and caters to women 18 to 35, also is a frequent developer of social marketing campaigns.

With its planned acquisition of Smashbox Beauty Cosmetics Inc., Estée Lauder Cos. is going after the youth market.

Estée Lauder, No. 133 in the Internet Retailer Top 500 Guide, announced today it would acquire Smashbox, a cosmetics company and online retailer of beauty products targeting women age 18 to 35, for an undisclosed amount. Other terms of the deal, which Estée Lauder expects to close in July, weren’t announced.

Smashbox, which also sells its cosmetics in various retail chains such as Macy’s Inc., No. 20 in the Internet Retailer Top 500 Guide, develops skin care and related products based on fashion model photography shoots, the company says.

Estée Lauder will maintain Smashbox as a separate brand and CEO Dean Factor and chief creative officer Davis Factor will remain with the company in Los Angeles after the deal closes, the company says.

Estée Lauder, which generated online sales of $101.1 million last year, according to Internet Retailer estimates, will leverage Smashbox’s niche brand and budding expertise in social media to reach younger buyers of cosmetics, says group president John Demsey. “Estée Lauder will leverage its extensive international experience as it seeks to grow the brand and engage Smashbox’s expertise in digital and social media to advance its current capabilities, an important and growing competency for the company,” says Demsey.

Recently Smashbox worked with Sephora USA Inc., No. 112 in the Internet Retailer Top 500 Guide, and social media agency Brickfish to develop the “Are You the Next Beauty Guru?” campaign for social networks such as Facebook. The campaign invited contestants to create videos, develop commercials or submit blogs with photos showcasing their vision for Smashbox’s next must-have beauty products. “We are acquiring a uniquely positioned cosmetics brand with true talent well known for engaging consumers across prestige channels and in the digital media space,” says Demsey.

Estée Lauder, which operates about a dozen e-commerce sites, didn’t say if will continue to operate on its existing e-commerce platform after the deal is closed or whether it will eventually be integrated to the platform operated by GSI Commerce Inc., Estée Lauder’s third-party services provider.

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