L'OEAL USA DIVESTS FROM CAROL'S DAUGHTER: WHAT'S NEXT?

L'Oréal USA has made the decision to divest from the popular haircare brand Carol's Daughter, which it acquired in 2014. Big news.

The History of Carol's Daughter

Beloved natural haircare brand Carol's Daughter was founded in 1993 by Lisa Price and named after her mother, Carol. The brand grew from a Brooklyn-based, DIY undertaking—where Lisa crafted products for family and friends—into a darling of the natural haircare industry. Fans quickly fell in love with its carefully formulated products, which soon gained national attention.

In 2014, beauty giant L'Oréal Groupe saw an opportunity to partner with Price and expand its portfolio by acquiring the brand. With the conglomerate's backing, Carol's Daughter reached new heights of success, including international expansion.

A Catch-22 for Brand Founders

While many celebrated the founder's success, several Carol's Daughter loyalists bemoaned the acquisition, fearing potential formulation changes. Adding to these concerns was the perception that the brand no longer considered natural-haired Black women its core audience—a sentiment fueled by advertisements featuring a more racially and ethnically diverse range of models, including those with straight, wavy, and loosely curled textures.

It's a familiar dilemma in the natural hair community, as successful brand owners must choose between scaling with corporate backing or navigating the complexities of growth independently.

The Divestiture

In a surprising move, L'Oréal USA recently announced it has sold Carol's Daughter to an unnamed independent entrepreneur, with founder Lisa Price assuming the role of President under the new ownership structure.

Particularly surprising, at least in my opinion, is that this decision comes at a time when L'Oréal is doubling down on the U.S. market and pursuing acquisitions that address the beauty needs of an increasingly multiracial consumer base.

At this time, the identity of the buyer and L'Oréal's reasons for the sale remain undisclosed. However, Cosmetics Business reports that the mystery entrepreneur has a track record of scaling beauty brands such as Ambi, AcneFree, Baxter of California, and Dermablend.

This isn't the first time a major corporation has divested from a successful haircare brand.

Two notable examples include:

• Wella – Founded in 1880, Wella was acquired by Procter & Gamble in 2003. In 2015, P&G sold the brand to Coty, which later sold a majority stake to KKR, a private equity firm, in 2020.

• Clairol – A staple drugstore beauty brand established in 1931, Clairol was purchased by Procter & Gamble in 2001 before being sold to Coty in 2016.

Should We Be Concerned?

When people hear "divest," they often assume the worst—but let's not jump to conclusions. Those familiar with Carol's Daughter know it remains a go-to for many haircare enthusiasts, and this sale could be driven by portfolio optimization, market shifts, or a strategic realignment within L'Oréal. In some cases, corporations choose to focus on their core brands, divesting from those less integral to their long-term vision.

In summary, acquisitions and divestitures are commonplace in the beauty industry and aren't necessarily cause for concern. Whatever the reasons behind this selloff, we’re excited to see how Carol's Daughter will evolve under its new leadership and how Lisa Price's vision will shape its next chapter.