Nykaa acquires Eighty Two East

Nykaa is in the process of acquiring a majority stake in Deepika Padukone's skincare brand, 82°E, as part of its strategy to enhance its 'House of Nykaa' portfolio amidst growing competition. The acquisition, for an undisclosed amount, seeks to capitalize on Nykaa's large customer base and scale to potentially revive the struggling celebrity-backed brand.

82°E, known for its premium skincare products, has faced challenges since its launch in late 2022. The brand's pricing, with an average of ₹2,500 for 50-ml jars, has been a significant hurdle, and it has seen a 30% decline in revenue to ₹14.7 crore for FY25, resulting in a ₹12.26 crore loss. Nykaa aims to leverage its 42 million beauty customers to boost 82°E's market standing.

This acquisition aligns with Nykaa's broader strategy to build a comprehensive beauty and wellness portfolio, competing with established players like Reliance Retail's Tira, Sephora, and Shoppers' Stop Beauty. Nykaa has previously expanded its offerings by acquiring brands such as Nudge Wellness and Earth Rhythm. The company reported a 156% increase in net profit to ₹68 crore in Q3 FY25, with consolidated revenue rising 27% to ₹2,873 crore.

Acquiring celebrity brands fits a broader market trend where partnerships with established corporations provide the necessary scale and profitability. This strategy has proven effective, as demonstrated by Alia Bhatt's stake sale of Ed-a-Mamma to Reliance Retail Ventures and Virat Kohli's collaboration with Agilitas. Celebrity influence can capture initial consumer interest, but longer-term success often hinges on strategic corporate backing.

With India's beauty and personal care market poised to reach $34 billion by 2028, Nykaa's move is timely. E-commerce drives this growth, propelled by increasing access to premium products and rising discretionary spending in lower-tier cities. The acquisition of 82°E could position Nykaa to capture a larger share of this burgeoning market, provided they successfully integrate and scale the brand. The outcome of this acquisition could set a precedent for similar collaborations between celebrity brands and major retail players in India's dynamic beauty sector.