2024年第四季度美容服务行业简报-HarrisWilliams

Aesthetic Services Sector Summary

Core Content Overview

The aesthetic services sector is experiencing robust growth and increasing investor interest, driven by secular trends, a fragmented market, and the potential for significant M&A activity. The industry includes a variety of service providers ranging from minimally invasive medspas to surgical plastic surgery and dermatology-focused concepts, all aiming to enhance personal appearance and wellbeing. The market is expected to continue expanding, with new business models and growing consumer demand for aesthetic treatments.

Main Industry Segments

Medspa

• Definition: Concepts offering minimally invasive aesthetic services such as injectables, skin resurfacing, and laser hair removal.
• Representative Concepts: eVolve, FUNCTIONALAB, Laser\way, MEDSPA PARTNERS, SKIN LAUNDRY, SKINPHARM, SKIN SPIRIT, 4EVERYTHING, the biostation, SUGARED, BRONZED, VIVA, DAA, BAA+.
• Key Trends:
  • Increased investor interest due to high average ticket size and recurring revenue potential.
  • Many new platforms have emerged, emphasizing the benefits of collaboration, such as provider training, service expansion, and improved customer experience.
  • There is a significant opportunity to introduce membership plans, as 70% of customers show interest despite only one-third of medspas currently offering them.

Plastic Surgery

• Definition: Providers offering invasive surgical treatments for cosmetic appearance or reconstructive purposes.
• Representative Concepts: Sculpt, PLASTIC SURGERY, UNITED AESTHMTIS, AESTHETICS, HET, C, EST, A, PAINFULITIES, EPIPHANY, TFRONT MATOLOGY, GOLDEN STATE, SOF CENTRAL, STATES, LATINUN, QUALDERM, PARTNERS.
• Key Trends:
  • Steady growth in procedures despite economic uncertainty, with a 5% rise in plastic surgeries and a 7% increase in minimally invasive procedures in 2023.
  • Continued focus on M&A as larger players seek to consolidate and strengthen their market positions.
  • Hybrid concepts are emerging, aiming to serve as a "one-stop shop" for aesthetic services.

Dermatology

• Definition: Specialty medicine focused on skin, hair, and nail treatment, increasingly incorporating aesthetic services.
• Representative Concepts: ADVANCED DERMATOLOGY, ANATOMOLOGY, U A, e Arundel, GEP, ETGERXGROU, STGROOP, SCW, SCAWI DERMATOLC, DERMATOLOG, QUALDERM, PARTNERS.
• Key Trends:
  • Aesthetic services are providing value to medical dermatology platforms by expanding their market reach and allowing for price optimization.
  • Many concepts are exploring their own aesthetic strategies, such as in-clinic product sales and partnerships with pure-play aesthetic providers.

Other Aesthetic and Wellness Services

• Definition: Providers focusing on enhancing personal wellbeing and appearance through specialized health, beauty, and wellness services.
• Key Trends:
  • Consumer interest in health, fitness, nutrition, sleep, and mindfulness is driving growth in aesthetic services.
  • There is a growing evolution of concierge wellness practices that combine medical and aesthetic needs.

Key Market Trends

• Attractive Value Drivers: The aesthetic services market is large and growing, with strong unit economics and low penetration.
• Emerging Opportunities:
  • The weight loss drug market is projected to grow significantly, from ~6B in 2023 to ~100B in 2030.
  • Other wellness categories, such as IV therapy and hormone replacement, are gaining momentum.
  • Subscription models for neuromodulators and facial rejuvenation devices are creating new growth avenues.
• M&A Momentum: The market is seeing a continued rise in M&A activity, with a focus on add-on acquisitions and scaling platforms.

Investor Interest

• Investors are increasingly interested in the aesthetic services sector due to its attractive growth potential, fragmented nature, and evolving consumer demand.
• The sector is attracting private equity investment, driven by the untapped market potential and the ability of platforms to scale and mature.

Industry Growth Drivers

• Consumer Demand: Rising consumer spending on aesthetic and wellness services, even amid economic uncertainty.
• Market Fragmentation: A fragmented market presents significant M&A opportunities as larger players consolidate.
• Innovation: Continued innovation in products and services is enhancing client outcomes and driving growth.

Contact Information

• Corey Benjamin: Managing Director, Consumer, cbenjamin@harriswilliams.com, (804) 887-6042
• Ed Arkus: Group Head, Managing Director, Consumer, earkus@harriswilliams.com, +44 20 7518 8905
• Tim Alexander: Managing Director, Consumer, talexander@harriswilliams.com, (612) 359-2716
• Zach England: Managing Director, Consumer, zengland@harriswilliams.com, (612) 359-2709
• Geoff Smith: Group Head, Managing Director, Healthcare & Life Sciences, gsmith@harriswilliams.com, (804) 915-0195
• Ryan Budlong: Group Head, Managing Director, Consumer, rbudlong@harriswilliams.com, (415) 217-3409
• Will Bain: Managing Director, Consumer, wbain@harriswilliams.com, +44 20 7518 8906
• Ryan Freeman: Managing Director, Consumer, rfreeman@harriswilliams.com, (612) 359-2703
• Brent Spiller: Group Head, Managing Director, Consumer, bspiller@harriswilliams.com, (804) 915-0183
• Brant Cash: Managing Director, Consumer, bcash@harriswilliams.com, (612) 359-2709
• Kelly McPhilliamy: Managing Director, Consumer, kmcphilliamy@harriswilliams.com, (804) 915-0114

Additional Information

• Harris Williams is a global investment bank specializing in M&A and private capital advisory services.
• The firm has deep industry experience and a proven track record in the aesthetic services and consumer health sectors.
• Harris Williams has a strong internal promotion culture, with 87% of Managing Directors promoted from within.
• The firm's revenue is largely driven by repeat clients (75% of revenue).

Sources and Disclosures

• Sources: Boston Consulting Group, McKinsey & Company, SEM Rush, Axios, American Society of Plastic Surgeons.
• Disclosures:
  • Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC.
  • The firm is authorized and regulated in various jurisdictions.
  • This document is for discussion purposes only and does not constitute a recommendation, offer, or solicitation for the purchase or sale of any security.
  • No representation or warranty is made regarding the fairness, accuracy, or completeness of the information provided.