“The writing’s been on the wall,” said Nicole Giannini, owner of Siren Salon & Apothecary, an upscale hair salon in wealthy Marin County, a suburb of San Francisco. “When I saw Oribe on Amazon and Costco I knew something like this was coming.”
“Something like this” is in reference to the announcement this morning that Kao USA, a manufacturer of professional hair care brands like Goldwell and KMS, will acquire Oribe Hair Care, Inc. According to an article in WWD, terms of the deal were not disclosed, but industry sources estimated Kao will pay between $400 million and $430 million for the brand. Sources estimated Oribe has between $85 million and $100 million in sales, with $30 million in earnings before interest, taxes, depreciation and amortization.
Founded by famed hairstylist Oribe Canales with Daniel Kaner and Tevya Finger of Luxury Brand Partners, Oribe hair care has been a backstage staple at fashion week and a celebrity favorite for its high-performance products. The brand is primarily carried at prestige salons like Giannini’s Siren Salon, but is also carried at luxury retailers Neiman Marcus and Space NK.
So how does a luxury brand remain “luxury” when a mass distributor purchases it? Giannini, who has been carrying Oribe since 2010, is hopeful yet cautious. “Until recently you could tell it was an artist-driven brand. In the beginning there was a white-glove focus on accounts like mine and it really felt like they were taking our input and integrating it into the products. I’m really hoping this acquisition will mean a stronger focus on just hair care so they can return to that level of client service.”
Cory Couts, global president of Kao’s salon division, explained in WWD that he doesn’t want to lose customers like Giannini. “[We want to] grow the brand without diminishing the exclusivity of the brand,” Couts said. “We don’t want to dilute the brand equity, we don’t want to sell it outside of the types of salons it’s selling in now…That means in terms of growth, we have to look to international markets.”
The Oribe business will continue to be based in New York City under current management, reporting to Kao Salon Division.