L'Oreal Buys Salon Hair Care Brand PureOlogy

One of the salon industry's hottest hair care brands — PureOlogy — is now in the hands of L'Oréal, which purchased the Irvine, Calif., company for an undisclosed amount of cash Wednesday.

The acquisition signals the importance of the hair coloring market — PureOlogy is designed for color-treated hair — and also extends L'Oréal's reach into the aspirational luxury hair care category.

PureOlogy Research LLC, which generated $207 million in retail sales for the most recent 12-month period, will relocate to New York, where L'Oréal has its headquarters, and join the L'Oréal Professionnel, Kérastase, Matrix, Redken and Mizani brands within the L'Oréal Professional Products division of L'Oréal USA. PureOlogy will operate under the Redken umbrella once it relocates, a move L'Oréal expects will give fashion-focused Redken entrée into additional upper-tier salons. L'Oréal said the acquisition would not affect corporate earnings for the financial year ending Dec. 31. In addition, it is expected to add to earnings, starting in 2008.

PureOlogy took salons by storm in 2001 when it was introduced with formulas specifically designed for consumers with color-treated hair. Jim Markham, founder of PureOlogy, pinpointed a gap in the marketplace, which was ripe for a luxury, high-priced hair care line that would meet the needs of color-treated hair. Since colored hair tends to fade and be dry, formulas are sulfate-free and contain an "anti-fade" complex. At the time, industry estimates calculated that more than 50 percent of women colored their hair. Now, the percentage has risen to about 65, further bolstering PureOlogy's potential customer base.

Packaging innovations were intended to instantly give PureOlogy a spotlight: Custom-molded containers were designed to fit in the corner of a bathtub, easy-to-pour grips were made to fit a woman's hand and bottles were color-coded to help differentiate among the various items in the line. Products were priced in the $16 to $20 range, unusually high for an unknown brand. What further separated PureOlogy from other hair care launches was that despite being a premium-priced brand, it reached a breadth of salons, not just the most exclusive outposts. Today, PureOlogy consists of hair care and styling items with prices as high as $50 for NanoWorks shampoo, which incorporates nanotechnology into formulas. At a recent industry trade show, Markham credited the high-tech hair care wave for a 70 percent revenue growth in the company's 2006 sales over the year before.