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BeautyMatter: Q1 2019 – Beauty Deals

There seems to be no beauty bubble in sight. According to industry insiders, Beauty M&A is predicted to continue its hot streak through 2019.  The number of transactions remains high and values increase creating challenges for potential acquirers as a result. The first quarter did not disappoint with Glossier, Hims and Calm all reaching unicorn status in new rounds of funding.

Susan Babinsky, Senior Vice President of Kline Group, says: “The flurry of M&A activity over past several years has reduced the pipeline of good sized opportunities (eg $100m- plus brands or companies) thus companies are snatching up small and sometimes less proven businesses—often for quite a premium.”

Our latest article looks at 5 of the most eye catching deals. For the full article, visit BeautyMatter here.


Madison Reed secures $51 million in series D financing

Madison Reed is a beauty company revolutionizing the way women color their hair. The fast-growing start-up has created a luxurious, prestige hair color formula made with ingredients you can feel good about. For those who prefer to color their hair at home, Madison Reed uses proprietary color-matching technology and a team of professional, on-call colorists to help women choose the perfect shade of hair color, which is delivered to their door for under $25. For women who prefer to have Madison Reed color applied with the help of a professional, Madison Reed Color Bars are open in six locations in New York City and San Francisco, with more coming soon.


Hims raises $100MM investment

Launched in late 2017 by 29-year-old entrepreneur Andrew Dudum, Hims is a men’s wellness direct-to-consumer brand dedicated to millennial men. The brand focuses on erectile dysfunction and hair loss, wrapped in a minimal Instagram aesthetic of muted pinks and greys.


Glossier raises $100 million series D

Glossier Chief Executive Emily Weiss started a blog called Into the Gloss in 2010 as a side project when she was a fashion assistant at Vogue magazine. In a product pivot in 2014, Glossier was launched as a community-driven, direct-to-consumer beauty company with an inclusive, customer-centric approach to brand building that has made it a leader in the rapidly evolving global beauty industry. Glossier is the beauty brand you want to be friends with. Everything that Glossier does is inspired by real girls and designed for real life. Glossier has two permanent retail locations in New York and Los Angeles and plans to open five temporary stores in US cities, including Miami, as well as in London, this year.


Youth To The People receives minority investment

Youth To The People was co-founded by cousins Joe Cloyes and Greg Gonzalez who were both immersed in the beauty industry from a young age. Cloyes and Gonzalez created Youth To The People with a core belief that what you put on your skin should be as pure and nutrient-rich as what you put into your body. The products utilize the best superfood ingredients, balanced with clinical pro-grade actives to deliver results you see and feel. They break the beauty industry mold by using recyclable glass bottles and jars over single-use plastic.

Sandbridge Capital is a private investment firm with offices in Los Angeles and New York that invests exclusively in high-growth global branded consumer companies, including current strategic investments in The RealReal, Rossignol, and Farfetch ($5 billion IPO), as well as the recently completed $500 million sale of Thom Browne to Ermenegildo Zegna.


L’Occitane acquires Elemis for $900 million

Founded in 1990 by Sean Harrington, Noella Gabriel, and Oriele Frank, Elemis has been founder led and a pioneer in the beauty space since its launch. The brand, which specializes in skin treatments and formulations, is a top seller in the UK. More recently, it has ramped up in the US, and had begun targeting millennial shoppers with its Superfood line, reinforcing its cross-generational appeal. Elemis sells both directly to consumers through its websites, and wholesale in 1,600 spas, salons, stores, and multiple e-retailers worldwide, retail distribution, QVC, and aboard cruise ships.

L’Occitane International S.A. is an international group that manufactures and retails beauty and well-being products that are rich in natural and organic ingredients. A global leader in the premium beauty market, the group has more than 3,000 retail outlets, including over 1,500 owned stores, and is present in 90 countries. Through its five brands—L’OCCITANE en Provence, Melvita, Erborian, L’Occitane au Brasil and LimeLife by Alcone— the Group offers new and extraordinary beauty experiences, using high-quality products that respect nature, the environment, and the people who surround it.

L Catterton is the largest consumer-focused private equity firm in the world with over $15 billion of equity capital across six fund strategies in 17 offices globally. L Catterton’s team of more than 150 investment and operating professionals partners with management teams around the world to implement strategic plans to foster growth, leveraging deep category insight, operational excellence, and a broad thought partnership network. Since 1989, the firm has made over 200 investments in leading consumer brands.

BeautyMatter was born from Founder Kelly Kovack’s desire to provide a fresh voice to a beauty industry hungry for more content from her perspective, and through her lens. BeautyMatter aim to fill the void, connect the dots, and provide an informed, analytical, and compelling point of view. Exploring limits and blurring boundaries, they offer highly curated news and original content by thought leaders and beauty insiders.

The Red Tree is the UK’s leading international beauty brand consultancy and a powerhouse of ideas, insight and inspiration. For an informal discussion on how we might help you, please contact us.

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