Last year saw a significant pivot in how capital flowed into the beauty and personal care sector. Instead of pursuing broad expansion, investors and corporations prioritised balance-sheet strength, focused portfolios, and long-term value. This shift reflects a more cautious financial climate, impacted by uneven consumer spending, geopolitical instability, and increased borrowing costs.
Major players exemplified this trend. L'Oréal divested a stake in Sanofi for €3 billion, boosting financial flexibility, while also issuing its first US dollar bond for US$1 billion and investing US$160 million in a New Jersey innovation centre. Kering sold The Mall Luxury Outlets for around €350 million to sharpen its focus on core fashion and beauty. These moves suggest a strategy of monetising non-core assets to reinvest in science and infrastructure.
Debt financing was favoured for liquidity, not aggressive growth. Procter & Gamble issued US$1.25 billion in notes, Coty refinanced with a US$900 million bond, and Unilever completed a €1.5 billion offering. Walgreens Boots Alliance suspended its dividend to conserve cash, ultimately securing shareholder approval for a take-private deal.
Private equity also recalibrated, with minority stakes taken in brands like 111Skin and significant funding rounds for newer companies such as Damdam (US$30 million). India and Asia emerged as key investment hubs, with Foxtale securing US$30 million and Renee Cosmetics raising US$30 million at a US$200 million valuation. South Korea launched a ₩40 billion fund for K-beauty startups.
However, the IPO market cooled. While Beauty Tech and Eternal Beauty pursued listings, CVC-backed FineToday postponed its Tokyo IPO, and Shein reportedly cut its valuation expectations significantly. Venture capital remained strong for businesses blending technology and wellness, with Wonderskin raising US$50 million and Boulevard securing US$80 million. Creator commerce platforms like ShopMy (US$70 million) and Whatnot (US$225 million) also attracted substantial investment.
The takeaway for beauty businesses is clear: the era of easy money for rapid, unfocused growth has passed. 2025 demanded financial discipline, demonstrating that future funding will favour scale with substance, innovation backed by credible science, and growth firmly rooted in solid infrastructure rather than fleeting trends.
