ISSUE #34 NOVEMBER 20, 2020

A Publication of WWD

THE MONEY I$$UE Money images by Adobe

From forecasting the future of M&A activity to an A-Z breakdown of beauty’s key investors, WWD Beauty Inc takes an in-depth look at the financial picture heading into 2021. PLUS: Why diversity matters in investing and how some key players celebrated their first big deal. THE BUZZ 2 NOVEMBER 20, 2020 Beauty Bulletin

Carolina Herrera’s makeup line. The Ipsy to Acquire Boxycharm Charlotte Tilbury business also has Ipsy bought a major slice of the an expanding and successful skin- beauty-box competition when it care component, and was growing agreed to acquire Boxycharm in quickly — even during the COVID-19 October. The combined businesses pandemic. Multiple strategic buyers, are expected to form a powerhouse including the Estée Lauder Cos., were with more than $1 billion in combined said to have looked at the business. sales in 2020 and enough subscriber data to very specifically tailor brand Yatsen Files for IPO and product launches. Because of In late October, Guangzhou Yatsen the deal, Ipsy also restructured the E-commerce Co., the parent business, forming parent company company of skin-care brands Beauty For All Industries, which Perfect Diary, Little Ondine and also includes incubator Madeby Abby’s Choice, filed for an initial Collective, and will soon include public offering in the U.S. The deal a new brand called Refreshments would allow it to raise up to $100 launching later this year with Tk caption million, and make it the first Chinese “clean essentials,” like face wipes beauty company ever listed on and hand cream. the New York Stock Exchange. The business posted 3.03 billion renminbi KKW Sells 20 in net income for 2019, about $457 Percent Stake to Coty million. Yatsen plans to use the Kim Kardashian West sold a minority money for operations and potential position in her cosmetics brand, KKW investments or acquisitions. Cosmetics, to Coty, following in the footsteps of younger sister Kylie L’Oréal Purchases Mugler & Jenner, who had previously inked a Azzaro Licenses from majority deal with Coty. For KKW, the The 10 Most Major Beauty L’Oréal signed the deal to acquire licensing deal puts Coty in charge of the Mugler and Azzaro fragrance developing skin care — the biggest licenses from the Clarins Group in focus right now — as well as personal Deals of 2020 2019, but it closed earlier this year. care, hair care and nail care. But for ¬ Beauty M&A activity may have The Hut Group Files for IPO The brands generated about 340 Coty, the deal is pivotal to broader slowed down slightly in 2020, but The Hut Group, owner of Illamasqua, million euros in sales in 2018. The plans to accelerate growth in skin there were still many major deals Eyeko and e-commerce retailer acquisition gives L’Oréal further care, which it plans to do through to be had. The year was ripe with Lookfantastic, went public in access to prestige designer KKW and through Kylie Skin. public offering activity from the September with a $7 billion initial fragrances, but also allowed Clarins parent company of Perfect Diary, public offering. The business has to divest from fragrances entirely in Nestlé Health Sciences The Hut Group and VC-backed Hims, been growing, and saw sales rise order to focus on skin care. Mugler is Acquires Majority of but also saw a billion-dollar makeup almost 25 percent in 2019, to 1.1 known for Angel, an iconic gourmand Vital Proteins acquisition with the Puig-Charlotte billion pounds. “We anticipate scent, and Alien, a bestseller, while Nestlé Health Sciences agreed to Tilbury deal, as well as other substantial future growth and Azzaro’s portfolio includes classics buy a majority stake in Vital Proteins, meaningful transactions. Here are expansion across the beauty like Azzaro Pour Homme and an ingestible collagen business some of the biggest beauty industry, which will continue to Chrome, and Wanted. that makes powders, beverages M&A deals of 2020. benefit our brands and our web and foods. The deal underscores sites. We expect subscription beauty Hims Goes Public via burgeoning interest in the wellness KKR Buys Majority of Coty boxes will continue to drive customer SPAC Merger category, and in beauty-wellness Professional acquisition and loyalty, while our In early October, venture capital- products. The deal is meant to help Coty Inc. inked a deal with major own prestige beauty brand portfolio backed Hims said it inked a merger provide Vital Proteins, which will private equity firm KKR to sell a will benefit from premiumization agreement with special purpose continue to operate as a stand-alone majority stake in its professional trends and rapid expansion through acquisition vehicle Oaktree business, with resources to further division, which includes , OPI increased digital penetration and Acquisition Corp. that values the innovate and scale operations. and Clairol. After some speculation internalization,” said chief executive company at $1.6 billion and would that the deal had hit the rocks due officer Matthew Moulding. take it public. Hims, which also L'Oréal Acquires Thayers to the coronavirus, Coty and KKR operates a business segment L'Oréal upped its exposure to the signed a joint venture agreement Puig Acquires Majority Stake in aimed at women called Hers, runs natural beauty space with the that gives KKR control of the Charlotte Tilbury a telehealth operation that sells acquisition of Thayers Natural division with 60 percent ownership. Charlotte Tilbury became the latest erectile dysfunction medication and Remedies, a brand best known for its The move is meant to simplify founder to score a billion-dollar birth control, as well as hair-loss witch hazel and toners. The brand will the business, and allow for Coty beauty deal when Puig agreed to prevention and skin-care products live in L'Oréal's Consumer Products leadership to fix the ailing consumer buy a majority stake in her business over the Internet. Founder Andrew Division, which also contains L'Oréal division (home of Covergirl) and for what sources said was about 1.2 Dudum said the deal will allow the Paris, and NYX. Alexis accelerate the luxury segment, billion pounds. BDT Capital Partners business to work toward becoming Perakis-Valat, president of that especially via skin care. In November, also bought a stake in the business. “the front door to the health-care segment, said the brand was part Coty said that it expected the For fragrance-focused Puig, the system, serving as the first stop for of L'Oréal's strategy to develop its deal to close before the end of the acquisition furthers exposure to the people’s health and wellness needs skin-care business globally, and that calendar year, and that its remaining color cosmetics category, which around hundreds of conditions” and Thayers complemented L'Oréal's 40 percent stake in the operation is the company has played in with that the brands would move into new North American skin-care brand valued at around $1.3 billion. Christian Louboutin Beauty and categories going forward. portfolio. —Allison Collins Collage by Alex Bandoni; Kim Kardashian Ahmed Klink PRESENTED BY: BEAUTY BEGINS WITH TRUTH For three decades, Paula’s Choice has delivered research-based skin-care solutions that consumers embrace.

he beauty industry can be how well we’re meeting their needs, even as overwhelming with conflicting they might change. research, intimidating ingredients and thousands of WWD Studios: What is the company’s products to choose from. approach and philosophy in regard to But, for customers of Paula’s inclusivity and sharing knowledge? TChoice, the experience is distinctly different. E.K.: The inclusiveness of our brand is Paula’s Choice has been dedicated to something we have prioritized by cultivat- sharing knowledge about skin and skin care ing and supporting a diverse community since it was founded by best-selling author and making sure we offer an experience and customer advocate Paula Begoun 25 years where everyone feels part of it. This trans- ago. The ethos of Paula’s Choice is one based lates directly to the way we approach our on truth, not hype, and one that is firmly influencer and social initiatives. One of anchored to science and research. our initiatives around this is On the Rise, By providing consumers with science- which is a program that supports and am- backed education and products, Paula’s plifies the voices of Black content creators Choice has grown a loyal following, and its in the micro-influencer community. safe, effective formulas that deliver results We’ve always been about “accessibility, continue to be a go-to for new and existing not exclusivity.” One of the first impres- customers. sions users gain when they visit the Paula’s Here, Erika Kussmann, chief marketing Choice web site is how much our online officer of Paula’s Choice, discusses the brand’s presence is really an open book to the positioning, how the company leverages science behind our beauty. The research extensive R&D, the role of consumer insights is laid out in full candor on our product in product development and how skincare “is and personalization literally has no boundar- of just relying on slick marketing campaigns detail pages. Under every product descrip- not one-size-fits-all.” ies. It has allowed us to scale tremendously, and focus groups, Paula’s Choice sources a tion, users can find numerous customer not only in the United States but also around great deal of knowledge and product guid- reviews in full. WWD Studios: How have consumers the world – over 50 percent of our business ance direct-to-consumer. We truly listen to and their skincare needs changed in the is in Europe and Asia. their concerns and use their feedback to for- WWD Studios: What role does content past decade? mulate future products. We look closely at play in this approach? Erika Kussmann: What is exciting now is WWD Studios: What informs your the articles they are reading on our site, what E.K.: As a direct-to-consumer brand, the growing self-empowerment and interest product development strategy? products they’re obsessing over, what they’re Paula’s Choice launched online so that we in skincare information across so many more E.K.: In addition to being driven by the sci- buying, re-buying and not buying. are not just a sales portal but also a central customers than ever before. People want ence and research, our direct relationships source of knowledge for everything we facts when it comes to the health and beauty with our customers mean they play a vital WWD Studios: How do you leverage the create and all of the independent research of their skin. We see a growing base of role in our product development. Instead brand’s R&D efforts to deliver the right that our teams perform. Our web site customers who are savvy, science-obsessed, skincare solutions? lays the for our research and and intimately familiar with the ingredients E.K.: We follow the science — not what’s expertise, and we have expanded our reach that they use. In fact, people new to Paula’s popular. We use extensive research to sup- with social channels, e-mail and events that Choice make up over 70 percent of our port and verify our formulas. And we use help us cultivate relationships and share Expert Advice content traffic. Searches for hundreds of independent studies, safety data our expertise in all those places where ingredient information on our site are up and extensive consumer testing to develop skincare and self-care are at the center of more than two times year-over-year. and prove that our products are truly bene- the conversation. Our research, products An example is our Boosters collection has ficial for skin. Every product is tested on real and education are for everyone, and so is really taken off: These are hero ingredients people by an independent laboratory for irri- the content we create. We make sure that supported by the research at proven effica- tancy and safety. is reflected in our influencer partnerships cious levels. Our roots as a brand are educating cus- and the way in which we communicate tomers about what to use and not to use on with our customers across multiple digital WWD Studios: How does Paula’s Choice their skin, and this extends to our rigorous channels. meet these demands? standards on allowable ingredients in our E.K.: The cornerstone of our brand is to em- skincare. In this way, we’ve led the way for WWD Studios: What is the brand’s power people with the knowledge they need decades in developing clean formulations. approach to influencers? to feel confident in their skincare choices E.K.: Having a deeply knowledgeable cus- through our skincare and ingredient content WWD Studios: How has Paula’s tomer base creates a flywheel effect, in which across our channels. Choice adapted its strategy to meet your most passionate customers share this And as a result, nearly 80 percent of evolving consumer demands due to the knowledge with their friends, family mem- Paula’s Choice customers report “Trust in This trust pandemic? bers and peers around the world. Paula’s Choice’s Science & Research” as the E.K.: We know that we must remain nimble Fans have found Paula’s Choice on social number-one reason they choose our prod- is what has and responsive to our customers’ needs, es- who are attracted by our extensive skincare ucts. This trust is what has propelled us to pecially during these uncertain, changing and ingredient content. Over time, this become one of the largest and fastest-grow- propelled us to times. We apply an agile way of working community has become this strong legion ing digital skincare brands in the world. become one of across the entire organization, from market- of advocates for our brand that is empow- At the core, we are a consumer-centric, ing to content to creative. ered by knowledge. personalized skincare brand. Our focus is on the largest and The key is keeping our team united and For us, our influencers are a treasured helping people make individual choices for laser-focused on identifying those top-pri- part of the brand and that relationship themselves with best-in-class formulations fastest-growing ority projects that will ensure we are deliv- and that trust must run deep. This is just that deliver results regardless of their age, ering maximum value to the customer. This as much about the internal process — how gender, skin color or skin type. digital skincare approach enables us to respond quickly to we prioritize this work in-house and how Wherever the customer is in their skin- brands in changing market and customer needs. we maintain those relationships — as it care journey, Paula’s Choice is there with the We’ve been direct to consumer from the is about the flashy social media posts. It’s content to help them with a more informed the world.” start, and our AI learning and full-funnel dig- about taking the time to find the people solution. And on our site and digital chan- ital marketing strategies help us reach these who are true fans, who are true advocates, nels, we have the capabilities to personalize Erika Kussmann customers at all of the relevant digital touch- and who have an intense focus on the based on a customer’s needs for the most rel- Paula’s Choice points where they are. With our direct rela- knowledge and the science, and making evant experience. tionships, and our data capabilities, we can sure it is a two-way channel, where we are This mission of consumer empowerment measure how customers are responding and listening deeply to their ideas and needs. NEWS FEED 4 NOVEMBER 20, 2020

and so we’re seeing, certainly like everyone else, challenges on the Beauty Retailers Showcase color cosmetics business. People are much more focused on health care, and so we’re seeing strong growth Sustainability, Diversity in health and healthy skin. And “Wellness has been incorporated into everything,” says The Detox Market’s then we have what’s happening in the social environment, with much director of brand partnerships, Elena Severin. BY RYMA CHIKHOUNE more of a focus on sustainability and multicultural [initiatives].” According to the Global Wellness Walmart will focus on brands Summit, along with mental wellness, for and created by people of color, reproductive health is a rising trend Balbale said, while working to bring in the category this year. transparency into stores: “How do “Our customers have been asking we make it simple for people to for them,” said Michelle Connelly, understand the ingredients and make vice president of merchandising and sense of what is oftentimes a long planning at Credo Clean Beauty, of ingredient list on the back of the pregnancy products. “One of our bottle? We’re in the process now of values is to be welcoming to all…for trying to understand how we simplify clean beauty to be approachable, to the consumer’s ability to distill what bring that message that clean beauty she is reading in a way that makes is for everyone.” sense and helps catalogue what she’s This year’s Black Lives Matter reading into buckets that she cares movement has also had influence on about, whether it be impact on her the industry, as retailers pledge to own health and body, impact on the make inclusivity and diversity part of environment.” their ethos. In color cosmetics, retailers are either “It’s definitely a focus for us to putting attention on vegan products or put a concentrated effort behind those backed by known personalities.

Sephora diversity, not just in our brand Walmart offers The Lip Bar, a vegan, founders but also in all of our cruelty-free line, as well as Luv Betsey, WELLNESS IS TOP-OF-MIND packaged blend of superfoods in marketing,” continued Connelly. a line by Betsey Johnson. for consumers during the ongoing capsule form created by Asa Siegel. Along with skin care, hair is a Celebrity brands are indeed coronavirus pandemic, and now, it's “It’s all about protecting the focus for retailers, too. everywhere: Ulta Beauty will soon top-of-mind for retailers, too. microbiome in the skin and Credo recently added Nuele to its exclusively launch Keys Soulcare next The sector has been growing, last addressing the stress levels in the hair category, a brand founded by month, a beauty brand by Alicia Keys valued at $4.5 trillion in 2018 by the skin,” said Severin of Biophile, a two women of color, Anne Cheatham in collaboration with E.l.f. Cosmetics; Global Wellness Institute. According partly Black-owned brand. and Dr. Christine Martey-Ochola. CVS now sells Flower Beauty by Drew to the nonprofit organization — While turning to self-care amid “It’s a product that works for every Barrymore, and recently and which works to “empower” wellness rising health and environmental hair type,” said Connelly. “It’s done exclusively introduced Rare Beauty by through education and research on concerns, beauty shoppers are very well for us so far.” Selena Gomez, One/Size by influencer preventative health — the category specifically seeking out products that At Violet Grey, Black-owned Patrick Starrr and Makeup by Mario, grew nearly twice as fast as global are nontoxic, cruelty-free and have hair company Sunday II Sunday — founded by Mario Dedivanovic (Kim economic growth between 2015 an element of sustainability. Retailers founded by Keenan Beasley — was Kardashian's famed makeup artist). and 2017, based on data from the — from niche businesses to mass introduced last month. Each brand is inclusive, not just in International Monetary Fund. And market chains — have taken notice. “[Sunday II Sunday's] products shading but in price range, too, said the “personal care, beauty and “Nine out of 10 beauty consumers are all focused on scalp care,” said Alison Hahn, senior vice president of antiaging” division is the largest, are interested in buying clean over the Maureen Choi, Violet Grey’s executive merchandising in color at Sephora. worth nearly $1.1 billion. next 12 months,” said Monica Arnaudo, director of content and curation. “Product differentiation is one of “Wellness has been incorporated chief merchandising officer at Ulta Violet Grey, a highly curated luxury Sephora's main pillars.…There's a into everything,” said The Detox Beauty, according to in-house research. beauty retailer, has committed 15 lot of newness to come in 2021 with Market’s director of brand “And 80 percent of consumers expect percent of its shelf space to Black- these brands.” partnerships, Elena Severin. businesses to have a positive impact on owned brands, she added. In skin care, Sephora launched a The spotlight on wellness has been society and the environment.” For Walmart, while concentrating line by celebrity aesthetician Shani accentuated this year, due to the The latest brands to enter Ulta on indie and affordable beauty, Darden, and in hair, the latest impact of the coronavirus pandemic, Beauty this fall are nontoxic, vegan most recent additions include hair offering is Black-owned Bread Beauty she continued. Consumers are and cruelty-free: Pirette, a beach- accessories and tools. One brand by Maeva Heim (Sephora, too, has looking to reduce tension and anxiety. inspired fragrance; a hair-care and is a partnership with Conair and made the 15 percent pledge). “We’ve seen internal wellness body-care line by Griffin Coon, influencer Sazan Hendrix, while the Looking into next year, a focus equaling less stress on the skin and and Melanin Haircare, a Black- other is an exclusive launch with on health and supplying nontoxic outward health as well, but this year owned hair company cofounded hairstylist Kim Kimble, known for goods is a shared priority for retailers, really took it to a new level,” said by YouTuber Whitney White. And working with Beyoncé. including CVS. The mass retailer will Severin. “When you look at [2020 in partnership with clean retailer “Traditionally in moments of soon introduce a tool into stores, the launches] with your hindsight glasses Credo, Ulta Beauty launched a economic uncertainty, we see SkinSafe app developed by Mayo Clinic, on, you can see they all have a curated selection of brands that are consumers reverting back to more that will allow consumers to search and common thread and that’s wellness.” typically found there. established brands. They try to find better understand product ingredients. The Detox Market, which Inside Credo's own stores, the focus products that have known value for Along with showcasing Flower Beauty, specializes in clean beauty, recently has been on expanding its “mom and them…and we see a rise in beauty,” CVS has expanded Pop-arazzi, a vegan, added Biophile and Stamba to its baby” category, launched this year said Musab Balbale, vice president and cosmetics line that roster. The first is a skin-care brand by to offer nontoxic and sustainably and general manager for Walmart meets CVS' standards of clean. Alison Cutlan and Grace Fooden that sourced goods for infants and mothers U.S. Beauty. “We talk about the “We are making sure that we are uses probiotic bacteria, botanicals and to be. The newest brands are Nessa effect in beauty. All of that is mindful of ingredients,” said Andrea fungi, while the latter is a certified and Hatch Mama, which provide skin- now being influenced by COVID-19. Harrison, senior director of DMM at organic, sustainably sourced and care products for pregnancy. Consumers aren’t going out as much, CVS Health. “Our customers are asking.” COLOR COSMETICS SKIN CARE HAIR CARE

THE TEAM BEHIND YOUR TEAMS SINCE 1975. PROUDLY MADE IN NEW YORK CITY.

manaproducts.com WEEKLY ROUNDUP 6 NOVEMBER 20, 2020 The Latest From WWD Fashion.Finance.Media.Retail.

Blacktag founders Ousman Sahko and Akin Adebowale Shopify Partners With AliPay

¬ Retail platform Shopify Alibaba’s most recent and digital wallet provider Singles' Day shopping Alipay have joined in a event netted massive partnership revealed online sales, garnering Tuesday that allows the nearly $74.1 billion in gross former’s U.S. merchants merchandise volume to accept payments from during the multiday customers based in China event and channeling and other Asian markets. $449 million in sales to With the Alipay payment Italian brands. gateway, Shopify merchants Alipay serves more than are positioned to lean into one billion annual active major shopping holidays users in China, and its ONLINE such as the Lunar New Year roadmap includes extending LUXURY in February and the next 11.11 that reach to hundreds of MARKET Global Festival, aka Singles' millions more across Asia. FACES SLOW Day, in November 2021. — Adriana Lee Shopify and Alipay have partnered on a new RECOVERY payments gateway for U.S.-based merchants serving Asian consumers. ¬ ForwardPMX’s latest Blacktag Raises $3.75M in report analyzes the current and future Seed Funding state of the global ¬ Blacktag, a Black-owned and consumed. The platform online luxury sector, and operated global media leverages components from which is poised to and entertainment platform, social media platforms like see a decline in sales revealed a $3.75 million seed user-generated content and that could reach round. Connect Ventures, a profiles for creators including 45 percent and is new investment partnership artists, influencers, directors, forecast to not fully between Creative Artists musicians, actors, chefs and recover until 2023. Agency and New Enterprise more to connect directly The report Associates, led the round. with brands and audiences describes the luxury Beiersdorf Launches that can subscribe to these Blacktag announced market as a resilient partnerships with actress creatives’ content. Skin Care in South Korea industry, with brands Issa Rae and entertainer “Black economic power forging ahead despite ¬ Beiersdorf AG has just The range includes the Common, who will release should equate Black launched Chaul, its first Early Ritual Water Essence, original content. creatives’ power,” said Akin headwinds. There are opportunities brand developed specifically Early Ritual Ampoule and Blacktag’s objective is to Adebowale and Ousman for the Asian market. Early Ritual Cream, each in China, where modernize how content by Sahko, cofounders of The three-unit, premium billed to be antiaging and consumers there are Black creatives is created Blacktag. — Obi Anyanwu face-care line has products giving an even complexion. expected to generate formulated with fermented Beiersdorf said on half of all luxury tea. It was introduced Wednesday if the brand Target Tracks Growth goods purchases in South Korea a few is successful in South in the world in the weeks ago. The launch Korea, it will be launched Online and In-store next five years. was spearheaded by the incrementally in Asia, with a line revenues, and logging The report Accelerator (or NX focus on China, the largest more than $1 billion in profits. highlighted brands Accelerator), Beiersdorf’s country market in the region. Although digital comparable with high site Seoul-based innovation hub. — Jennifer Weil sales grew 155 percent during traffic and social the quarter, year-over-year, media engagement. comparable traffic grew about ForwardPMX said 4.5 percent, with more than 95 in the U.S., overall percent of the company’s third- search volume quarter sales fulfilled by stores. for luxury brands Our strong results in 2020 Target is investing in safety “ increased 9 percent precautions during the pandemic to reflect the benefits of our entice consumers to shop in stores. year-over-year, but multiyear effort to build a the growth came ¬ A week after announcing durable and flexible model,” “at a time when its partnership with Ulta said Brian Cornell, chief Beauty, Target Corp. executive officer. site traffic to those announced growth in sales For the three-month period same brands across channels. ending Oct. 31, revenues grew dipped 2 percent Target revealed quarterly 21.3 percent to $22.6 billion. year-over-year.” Chaul Mindful Skincare results, improving on top- — Kellie Ell —— Arthur Zaczkiewicz Photograph by aanbetta - stock.adobe.com; Target AP Images PRESENTED BY: POWERED BY INNOVATION For prestige beauty innovator and contract manufacturer, MANA Products, the future is now.

wenty-twenty has been parency and sustainability into their ingredi- a milestone year for ent statements and making them available to MANA Products’ renowned prestige beauty customers online and with QR codes,” Jaegly manufacturing facility. innovator and contract said, adding that the industry as a whole is manufacturer, MANA also “moving toward alternative sustainable Products. The New York- packaging materials, reduction in excess based company marks 45 packaging, and more eco-friendly ingredient Tyears in business and was also recently sourcing and manufacturing processes.” acquired by Traub Capital. Under Traub, For MANA, deploying sustainable prac- MANA can tap into the firm’s operational, tices is a top priority. strategic and financial expertise. In return, The company, for example, is leading Traub gets an industry-leading innovator with on the use of cold process and waterless strong R&D capabilities. technology in its formulation and prod- For MANA Products’ Chief Executive uct development, and it is committed Officer, Robert Jaegly, the acquisition is a to supply chain and product ingredient perfect fit that can help the company further transparency. Jaegly says MANA will be evolve and innovate; aligning it with the 100% Roundtable of Sustainable Palm Oil original vision of founder Nikos Mouyiaris, (RSPO) certified next year. but for a new era in the beauty industry. Jaegly says the demand for more sustain- Jaegly, who has decades of global business able products has gained momentum amid experience under his belt, has positioned the COVID-19 global pandemic. Consumers MANA as a color cosmetics and skincare are increasingly concerned with not only products innovator that delivers sustainable what goes inside their bodies, but what also and planet-friendly products that don’t goes on their bodies, and their skin — which skimp on performance. is shaping how products are made and sold. The company’s success is largely due to leveraging consumer insights while forging It’s A Small World deep collaborations with its brand partners The pandemic has also made the world a — which includes conglomerate beauty smaller place, and Jaegly sees this as an op- companies as well as smaller DTC and portunity for brands. Many heritage brands emerging brands. To help develop those that were once only available in their local partnerships, Jaegly and his team have markets/countries, are now available to a launched the MANA Brand Accelerator global consumer base through online shop- program, which is specifically designed for ping and social platforms,” he said. “We emerging brands. Jaegly has also embedded anticipate that this trend will continue to into the company’s manufacturing ethos grow and expand.” But to succeed, the CEO “MANA Clean,” which the CEO describes as stresses the importance of knowing the local the “best of the best” in formulation. and regional market, and the demographics driving purchase decisions. Let’s Be Clear And well before the pandemic outbreak, proven, proprietary cosmetic and skincare to goal setting and measures.” Bringing to market truly sustainable prod- Jaegly said consumer preferences were products, as well as lower minimum order Jaegly said the company works hard to ucts is no small task and requires adhering already shifting, which accelerated after quantities, enhanced customization options “develop the understanding of how each to stringent guidelines and certifications. It’s COVID. “People are now relying on social and expedited speed to market.” individual contributes to the goals and why been a challenge for businesses across the platforms for product demonstrations and The MANA Brand Accelerator program they are important. We have provided the beauty sector. But for the consumer, they recommendations more than ever,” he says. also allows existing beauty brands “unprec- tracking tools to manage the operation at the simply demand that brands offer greener “They’re not going into stores, and they’re edented access to MANA’s extensive library operator level in real-time.” and cleaner products, which requires trans- not trying on makeup. Stores are moving to- of innovative formulas and finishes, allowing In practice, this means manufacturing parency and authenticity. wards more of a localized distribution center them to select and procure items for promo- lines that can swiftly change over from “Beauty brands are incorporating trans- model versus a traditional retail experience.” tions and seasonal introductions, as well as one product to another. Jaegly notes that The CEO also says shoppers right now are their base businesses,” the CEO added. changeovers which previously took hours, attempting to move from sheltering in place And it is a library that continues to grow now take minutes. to “sheltering in public,” which is amplifying as trends evolve. concerns for safety and health. The current trends informing MANA’s What’s Next? For the beauty industry, Jaegly says compa- product development and innovation include Jaegly expects further consolidation in the nies need to do “our part to help alleviate this skin health and its microbiome, of “skin flora” beauty industry, which he said is a “great anxiety by creating and marketing product which requires probiotic products as well as way to leverage capital, location, technology, forms and packages that help protect against proper hydration. And, aside from the afore- along with creating scalable platforms.” the virus – single-use products, touchless mentioned waterless formulations and sus- Vertical integration will also come into products, stick products … as well as formu- tainably sourced products, MANA is devel- play “as it creates the ability to have a com- lations with hyper hygienic and skin barrier oping high-performance, clean-beauty items plete supply chain in one place,” the CEO protective properties, and other traits.” that Jaegly describes as “cleanical products.” said, adding that this “simplifies everything “I’m looking forward to seeing more of for the customer, allowing them to do Brand Acceleration the ‘cleanical’ trend – which are high-perfor- what they do best — which is market their Another notable pandemic-related trend mance products formulated with clean ingre- brands.” Jaegly added that MANA has re- that is reshaping the industry is the explosive dients,” Jaegly said. “It’s a win-win for every- cently partnered with Meiyume and RPG to To hear Robert growth of online shopping and the emer- body. Internally, we call it ‘MANA Clean,” and create vertical integration on a global scale. gence of DTC brands. Stuck at home and it is our benchmark for the best of the best.” When asked about what excites him when Jaegly discuss online, shoppers are trying new brands and he considers the future of the beauty indus- innovation in the types of products, which has put a spotlight Best In Class Manufacturing try, Jaegly is quick to respond. “Everything. on emerging beauty brands. In response, MANA also differentiates itself in the market Absolutely everything,” he said. prestige beauty Jaegly and his team have created the MANA by performing “faster, better and simpler” “As we adjust to this new normal — new Brand Accelerator program, which makes it than the competition, Jaegly said. “The in- opportunities are emerging to help custom- market. easier for brands to work with MANA. dustry demands shorter lead-times, smaller ers look and feel beautiful and safe,” Jaegly “The Brand Accelerator program creates runs and lower inventory,” the CEO ex- said. “New categories, new technologies, a seamless pathway for emerging and indie plained. “For us, it begins with the engage- new ingredients. It’s all good stuff. The CLICK HERE beauty brands that will allow them to part- ment process to upskill our operations team beauty industry is seizing this opportunity to ner with MANA from start-up to stardom,” every year spending over 20 hours of annual continue what we’ve been doing, but to do it Jaegly said. “The program features our training in everything from functional skills better — and we’re excited.” DEEP DIVE 8 NOVEMBER 20, 2020

Skin-care brands are in hot demand.

THINGS MAY HAVE gotten weird taking more time, apart from certain in the beauty dealscape over the past exceptions. Everyone’s looking for Beauty M&A Finds few months as financial types found smaller companies because there themselves Zooming through due is still a scarcity of good assets, so diligence, but the ongoing pandemic everybody’s trying to get into future The White Space is not expected to put a stop to champions as soon as they can.” beauty M&A going forward. He added the rush is also on Those in the know are predicting a busy beauty M&A climate. Shifts in consumer trends toward since beauty companies command BY ALLISON COLLINS AND JENNIFER WEIL online shopping, skin care, hair care such great margins and cash flow, WITH CONTRIBUTIONS FROM SAMANTHA CONTI AND SANDRA SALIBIAN and self care will have major impacts therefore often they don’t need a on what buyers and investors are second round of financing. looking for going forward, experts said. There are a handful of men’s “Any time there’s change in the brands in the market, as well as market and change in consumer businesses coming back up for sale behavior, it drives M&A. These after pressing pause on processes due are not temporary shifts, they are to the coronavirus. Bankers say they permanent shifts,” said Vennette Ho, are busy having conversations with managing director at Financo. founders looking to take risk off the Bankers are busy, insiders said, table, and that there is still selective and are expecting a variety of deal appetite from strategic buyers. companies to hit the market in the “The markets have come back — no coming months. Low interest rates one is afraid to go out in the market, are expected to contribute to deal there’s no need to put a process on volume, sources said. hold,” said Arash Farin, managing “There are a lot of transactions on director at the Sage Group LLC. the market. I don’t see any change But things are different than before, on that, and there are probably and investors looking at growing even more volumes,” said Laurent companies continue to inquire about Droin, managing director of Eurazeo “the COVID-19 bump” — the spike in

Brands in Paris. “Transactions are sales, especially online, that many „ Photograph by Adobe DEEP DIVE 9 NOVEMBER 20, 2020

Key Takeaways 1. M&A activity is expected to pick up heading into 2021, as big beauty looks for brands that reflect many of the permanent consumer changes wrought by the events of 2020.

2. Key areas of interest include skin- and hair-care brands, wellness-oriented companies, technology plays, men's and even manufacturing.

3. China is increasingly important — from both the buy and sell perspective.

companies saw this year — sources said. Beauty brands looking to do deals should be prepared to walk investors through COVID-19-era Direct-to-consumer numbers, whether they went up or brands with proven digital prowess are down, experts agreed. Brands that on every buyer’s list. saw a big uptick because of exposure to online or categories that saw Valuations can be sky high in around what consumers are looking of companies that were doing great heightened consumer interest during beauty, but those types of dreamy for.” McPhilliamy ticked off DIY going into COVID-19 because they the pandemic will need to explain multiples are only available to beauty, self care, personal health and had characteristics that were going the sustainability of those figures. companies that meet a certain set hygiene as key categories. “Not to to make them successful outside Similarly, brands who saw slumps due of standards, and those standards mention brands really took a stand of retailers…great digital content, to overexposure to brick-and-mortar are changing. Investors and buyers and have been showing they care and great community, almost a lifestyle retail or diminishing categories, like want companies with a strong digital they're taking action to address some following,” said Shaun Westfall, makeup, would need to show how presence — but today, when they say of the social issues facing the nation. managing director at Jefferies. they’re charting a path to recovery. that, they mean strong e-commerce That matters to consumers today Technology is another big area “People want to have these sales versus a few years ago, when more than ever,” she added. of focus. “Communities and block COVID-19 conversations in the they meant a strong social media Diversity is expected to become chains are very important today,” said rearview mirror and say, ‘This is our operation. Skin, hair and wellness are more important to prospective Karine Ohana, a co-managing partner new normal, this is not a two month all expected to remain hot categories, investors, some sources said. at Ohana & Co., referring to how bump.’ What is sustainable is what following consumer shopping habits. the technology can help augment the private equity [firms] want to Men’s may finally become a thing, companies' digital operations, know,” said Ilya Seglin, managing based on the volume of men’s brands “Any time there’s traceability and sustainability director at Threadstone Advisors. in the market. And manufacturing functions in today’s world where COVID-19’s effect on beauty sales M&A, a busy sector for private equity change in the consumer trust is key. She added is one of the things that earlier this firms not interesting in taking single- market and change investors are seeking companies with year, caused many companies to brand risk, is expected to continue. market-changing business models. pause their deal processes. “We find it interesting that some in consumer “I wouldn’t be surprised to see But some of those companies have of the less sexy areas of home and behavior, it drives companies step up investments come back out into the market, and personal care, like soap, personal in areas like L’Oréal has done others are expected to re-initiate cleansing, household products have M&A. These are with ModiFace,” said Eva Quiroga, M&A conversations in 2021. had record sales. Consumers are really not temporary managing director at Bank of America, “There have definitely been a focused on their personal health and referring to the tech company number of transactions that would hygiene,” added Kelly McPhilliamy, shifts, they are focused on artificial intelligence have potentially gone to market in managing director at Harris Williams. permanent shifts. ­ and augmented reality. “Bringing 2020 and many of them, regardless “We’re going to continue seeing ” technology in-house is probably easier of whether they’re doing extremely interest for skin care as a strong —vennette ho, financo with an acquisition than building it well, just doing OK, or not well, got to category, in particular in regards yourself. The beauty of the ModiFace the point where they wanted to have to natural skin care as well as relationship is that it’s so ingrained in 2020 under their belt. Especially with dermocosmetics in both prestige in “Diversity both in terms of your the L’Oréal model at this point.” the impact of COVID-19, people didn’t mass channels. We’re going to see employee base as well as your Those are the types of companies that want to have the questions around, continued interest in hair care as the customer demographic has become people are interested in, sources noted. is this a COVID-19 bump or slump?” category continues to outperform increasingly important. Being able Strategic buyers, struggling with said Janki Gandhi, managing director the other categories,” said Luc-Henry to show that your brand is truly exposure to brick-and-mortar sales at Goldman Sachs. Rousselle, managing director at inclusive and you do address a range at a time of dwindling in-real-life While company sales might have seen William Hood & Co. of demographics — partners are shopping, will need to look to buy fluctuations because of the pandemic, “This year, it's all about how brands going to be focused on that, especially brands that are growing, and are valuations for beauty companies have pivoted,” McPhilliamy said. “Brands with the current times,” Gandhi said. likely to consider divesting brands not, sources said. “It’s like COVID-19 really found their footing by focusing In many cases, the companies that that are not. , Unilever never happened; valuations are back up on digital marketing and direct-to- are desirable today are the same and Henkel, have publicly talked for anybody who did well throughout consumer, third party and e-comm… firms that attracted interest prior of divestitures. Reckitt Benckiser is

COVID-19,” Seglin said. as well as emphasizing solutions to the crisis. “There’s a whole cast reported to be selling a portfolio „ Photograph by Adobe DEEP DIVE 10 NOVEMBER 20, 2020

of personal-care brands including Sephora Southeast Asia — everybody’s Clearasil, Veet, Scholl and E45 skin looking for brands that have some BRANDS WITH BUZZ cream, which could command up sort of Asian presence,” Westfall said. Here, the companies that analysts expect to see considering to 1 billion pounds, according to But it’s not all interest from the sell M&A options in the year ahead. Reuters. has been considering side. Increasingly, buyers are coming divestitures for more than a year. And from Asia as well. “We also see an industry sources said that the Estée increase in interest and action from Lauder Cos. Inc. may be considering Chinese and Asia buyers looking to divestitures in makeup and hair. accelerate Western brands that have Growth is important, but so is demonstrated success in the region, profitability, sources said — especially either through Tmall or Sephora China. when it comes to direct-to-consumer People have talked about interest from businesses. that community for a long time, but “In dtc, the old days of trading now we're starting to see that translate off rapid growth with no profits is into activity,” McPhilliamy said. a nonstarter,” said Andrew Shore, Some executives expect further from left: Erno Laszlo's Firmarine Lift Mask; and conditioner bottles from Function of Beauty;Madison Reed Radiant Cream Color; managing director at Moelis. consolidation among travel-retail Tata Harper's Clarifying Mask; Il Makiage’s foundation range. “Strategics and private equity operators, as their businesses have groups are looking for an earlier practically ground to a halt for months Aroma-Zone, the French, Manzanita bought Kevyn proof point that the business might on end while debt has accumulated. natural DIY cosmetics brand, Aucoin, estimated to have sales not be scaled into full profitability but The other area of increased buyers is preparing to go on the block, between 20 million and 40 can show some level of profit at the is special purpose acquisition vehicles, according to industry sources. million pounds, two years later. Function of Beauty is said to bottom line,” said Intrepid managing which have permeated the public Its first store opened in Paris be in the discussion process, director Steve Davis. markets over the past year. Hims in 2014, and was followed by six others in France, while but close to inking a deal. The Valuations in the sector are slowly recently unveiled that it would go the brand’s online sales have business started by making shifting from revenue-based multiples public via a SPAC acquisition at a $1.6 boomed. Aroma-Zone is customized hair products, and to profitability-based multiples, billion valuation, and industry sources reportedly expecting about 100 has since branched into other according to Michael Toure, founder noted that could be the case for other million euros in 2020 sales. product categories. and chief executive officer of Toure companies as well. Several beauty Bios Line, an Italian Goli, a brand that makes Capital. “Now, people will look at businesses have openly talked about manufacture of natural apple cider vinegar vitamins, is profitability,” Toure said, though he the possibility of the public markets, cosmetics, food supplements said to be navigating inbound noted that isn’t the only thing buyers including Morphe parent company and medical devices for inquiries with the help of will look at — “We are not there yet Forma Brands, Glossier and Il Makiage. personal care and wellbeing, Centerview. Industry sources where businesses get valued only on “More and more companies that is reported to have garnered said the brand is surprisingly big with broad distribution and the profitability vertical.” are getting to be of a certain scale — interest from numerous funds, a solid direct-to-consumer Global potential, too, has never $150 million-plus revenue size — a including 21 Invest. Bios Line reportedly generated more than business, with about $300 been more important. Buyers want number of them are starting to think 30 million euros in 2019 sales. million in net sales. brands that either have, or could, about, is a strategic exit what we’re Men’s brands are hot Gray Away, a small brand expand into China and the rest of the really going to be looking for in terms right now, which sources that’s part of Mana Products, is Asian market, experts noted. of a deal, or does it make sense at said is because of Millennial said to be coming to market with “All brands need to be able to some point to consider the public men taking personal care Threadstone. The business is enter Asia — China cross-border, or markets?” Goldman’s Gandhi said. ■ routines into products beyond said to have $10 million in sales. soap. Several, including Il Makiage has hired Duke Cannon with Houlihan Centerview to explore a Lokey, Every Man Jack with possible sale or IPO, the Intrepid, Manscaped, Brickell company confirmed to WWD. Men’s Products, Dude The business is expecting Products and Dr. Squatch are $150 million in net sales said to be in the market. for 2020, after successfully Industry sources said Duke building and scaling an online Cannon has about $50 million makeup business. in sales and $10 million in Kitsch, a hair accessories Ebitda, that Manscaped has business, is said to have hired about $100 million in sales, Financo to explore options. and that Dr. Squatch has about Madison Reed, the direct-to- $100 million in sales with $10 consumer hair color business, is million in Ebitda. Manscaped said to be raising another round, ceo Paul Tran told WWD in according to industry sources. an emailed statement: “So Merci Handy, a many rumors going around. French personal-care brand Manscaped is much larger than conceived for Millennials, is that [smiley face].” said to be looking either for Erno Laszlo is expected to further investment or maybe come back to the market next a sale. The brand, whose hero year, industry sources said. The product is a hand sanitizer, business has done well in China just entered the U.S. and U.K. and is said to have $120 million Its estimated annual sales are in retail sales. about 20 million euros. Eve Lom and Kevyn Sources are also talking about Aucoin are at least two of the Tata Harper, which is also said to brands Manzanita Capital is be evaluating potential options. said to be shopping around. Eve Industry sources said Lom was founded 30 years ago the investment community and acquired by Manzanita in remains interested in Thrive May 2013. Industry sources Causemetics, which is said to Gen Z and Millennial estimated it has sales between have hired Goldman Sachs to shoppers in China are $17 million and $18 million. evaluate options. fueling interest in brands that are buzzy there. Genz photograph by Dave Tacon Clinically- Effective, Biocompatible Skincare BEAUTY ROLODEX 12 NOVEMBER 20, 2020 U.S.-based Venture Capital and Private Equity Beauty Investors The key financial players in the beauty sphere. BY ALLISON COLLINS

BEAUTY HAS BEEN a hotbed group seems to grow by the year, as of M&A activity for years now, with more firms hope to realize outsized strategic buyers vying to take over exits with major returns. Here, a companies and capabilities, and paying rolodex of key U.S. venture capital and top dollar to do so. Before that, though, private equity investors in the beauty come the early-stage investors. That sphere, in alphabetical order.

ADVENT INTERNATIONAL BERTRAM CAPITAL PARTNERS Headquarters: Boston Headquarters: San Mateo, Calif. Current Beauty Investments: Current Beauty Investments: Olaplex Paula’s Choice Deal Size: Invests $100M to $2B in Deal Size: Invests $25M to $100M companies with $50M-plus in sales. in companies with between $30M Key Player: Tricia Glynn, to $250M in sales. $250,000 to $1M in companies GENERAL ATLANTIC managing director Key Player: Jeff Drazan, with at least $2M in sales. Headquarters: New York managing director Key Player: Desiree Gruber, founder Current Beauty Investments: ALLIANCE CONSUMER GROWTH Forma Brands, Grove Collaborative Headquarters: New York and THE CARLYLE GROUP ENCORE CONSUMER CAPITAL Deal Size: Invests $25M to $500M Los Angeles Headquarters: , D.C. Headquarters: San Francisco in companies of varying sizes. Current Beauty Investments: Current Beauty Investments: Current Beauty Investments: Key Player: Andrew Ferrer, Harry’s, Milk Makeup, Ouai, Perfect Diary, Tokiwa Supergoop, Butter London managing director Nudestix, Pacifica, Tata Harper Deal Size: Invests $50M to several Deal Size: Invests $5M to $40M Deal Size: Invests $5M to $30M billion dollars per company, in in companies with between GRYPHON INVESTORS in companies with $5M to $50M companies with at least $75M $10M to $100M in sales. Headquarters: San Francisco in sales. in sales. Key Players: Robert Brown, Current Beauty Investments: Key Player: Julian Steinberg, Key Player: Jay Sammons, managing director, Nichole Novak RoC Skincare, Milani Cosmetics cofounder and managing partner managing director Ferrara, vice president Deal Size: Invests $50M to $500M in companies with $50M to $250M ANCORA INVESTMENT HOLDINGS CLERISY FENWICK BRANDS in sales. Headquarters: Headquarters: Miami Headquarters: Birmingham, Ala. Key Player: Matt Farron, partner Current Beauty Investments: Current Beauty Investments: N/A Current Beauty Investments: Indie Lee, Vapour Beauty, Deal Size: Invests $5M to $20M in Madison Reed, Ursa Major GRACE BEAUTY CAPITAL Taos Aer Clean Deodorant companies with$10M-plus in sales. Deal Size: Invests $3M to $12M in Headquarters: New York Deal Size: Invests varying Key Players: Alexandra Wilkis companies with $5M-plus in sales. Current Beauty Investments: amounts in companies with up Wilson; Lisa Myers, cofounders Key Player: Elizabeth Stewart, Pause Well Aging, Supergoop, to $10 million in sales. partner Pinrose, Glamsquad, Birchbox, Key Players: Nicky Kinnaird, CORNELL CAPITAL Harry’s Lori Perella Krebs, co-founders Headquarters: New York FINN CAPITAL PARTNERS Deal Size: Invests $500,000 to Current Beauty Investments: Headquarters: San Francisco $5M in companies with less than BAIN CAPITAL Knowlton Development Corp., Current Beauty Investments: $20M in sales. Headquarters: Boston Blue Mistral Starface, Crown Affair, Winky Lux, Key Player: Frank Fazzinga, Current Beauty Investments: Deal Size: Invests $25M to Kjaer Weis, Ursa Major, Needed, president Maesa, WWP Inc. $100M in companies with between Cake, Plus, Vacation Deal Size: Invests $150M-plus $10M to $500M in sales. Deal Size: Invests $100,000 HIGHLANDER PARTNERS in companies with $100M to Key Player: Justine Cheng, partner to $1.5M in companies with up to Headquarters: Dallas $5B in sales. $10M in sales. Current Beauty Investments: N/A Key Players: Ryan Cotton, CULT CAPITAL Key Player: Pat Finn, Deal Size: Varying amounts in managing director; Miray Topay, Headquarters: New York managing partner and cofounder businesses with sales between principal Current Beauty Investments: $10M and $100M Supergoop, Lawless Beauty FORERUNNER VENTURES Key Player: David Olsen, BEECHWOOD CAPITAL Deal Size: Invests up to $10M in Headquarters: San Francisco managing director Headquarters: Wellesley, Mass. companies with at least $2M in sales. Current Beauty Investments: Current Beauty Investments: Key Player: Christine Holcomb, Glossier, Curology, Prose, IMAGINARY VENTURES Kosas, Shani Darden Skin Care, brand associate Necessaire Headquarters: New York Violet Grey Deal Size: Invests $1M to $10M in Current Beauty Investments: Deal Size: Invests $2M to $5M in DGNL VENTURES companies with $1M to $10M-plus Bread Beauty Supply, Hum companies with $5M to $20M in sales. Headquarters: New York in sales. Nutrition, Nécessaire, Hawthorne, Key Player: Larry Kahn, Current Beauty Investments: N/A Key Player: Kirsten Green, Kosas, Glossier founder and managing partner Deal Size: Invests between founder and managing partner Deal Size: Invests $1M to $10M„ Illustration by Matthew Billington parfums-de-marly.com BEAUTY ROLODEX 14 NOVEMBER 20, 2020

in companies prelaunch to Deal Size: Invests $10M to $50M Deal Size: Invests $100,000 to Makeup Revolution $50M in sales. in companies with more than $2M in early-stage Stage1 clients. Deal Size: Invests $200M to Key Player: Kelly Dill, principal $10M in sales. Key Player: Lila Sharifian, chief $800M in companies with between Key Player: Rich Gersten, financial officer, personal care $100M and $1B in sales. KAINOS CAPITAL industry adviser and beauty Key Players: Hadley Mullin, senior Headquarters: Dallas managing director, Colin Welch, Current Beauty Investments: POINT KING CAPITAL SWANDER PACE managing director Beautybio Headquarters: San Francisco Headquarters: San Francisco Deal Size: Invests $30M to and Sydney Current Beauty Investments: VMG PARTNERS $150M in companies with $20M Current Beauty Investments: Glo Skin Beauty, J.R. Watkins Headquarters: San Francisco to $100M in sales. The Beauty Chef, Bybi, Deal Size: Invests $10M to Current Beauty Investments: Key Player: Jay Desai, partner Esmi Skin Minerals $60M in companies with between Briogeo, Necessaire, Perfect Diary, Deal Size: Invests $250,000 to $20M and $300M in sales. Musely, Hello Bello KARPREILLY $50M in companies of varying sizes. Key Player: Mo Stout, Deal Size: Invests $10M to Headquarters: Greenwich, Conn. Key Player: Sam McKay, managing director $150M in companies with $10M Current Beauty Investments: founding partner to 500M in sales. BoxyCharm, Freck Beauty, TA ASSOCIATES Key Players: Robin Tsai, general Clean Skin Club PRELUDE GROWTH PARTNERS Headquarters: Boston partner, Alisa Williams, partner Deal Size: invests $500,000 to Headquarters: New York Current Beauty Investments: $25M in companies with up Current Beauty Investments: Paula’s Choice, MAV WALDENCAST to $50M in sales. 8Greens, Sol de Janeiro, Summer Beauty Brands Headquarters: New York and Key Player: Will Mooney, Fridays, Westman Atelier Deal Size: Invests $50M to $500M London vice president Deal Size: Invests $8M to $30M in companies of varying sizes. Current Beauty Investments: in companies with between $8M Key Player: Jeffrey Barber, C16 Biosciences, Costa Brazil, L CATTERTON to $50M in sales. managing director Manual.co, Kjaer Weis, Salve, Headquarters: Greenwich, Conn. Key Players: Neda Daneshzadeh, Stealth Beauty Company Current Beauty Investments: partner, Alicia Sontag, partner TOPSPIN CONSUMER PARTNERS Deal Size: Invests $1M to $20M Bliss, Ideal Image, One Spa Headquarters: Mamaroneck, N.Y. in companies with between World, StriVectin, The Honest SAN FRANCISCO EQUITY Current Beauty Investments: $2M and $40M in sales. Co., Intercos, CoverFX, Il Makiage, PARTNERS Japonesque, reCommerce Key Player: Michel Brousset, Kopari, Nutrafol, Public Goods, Headquarters: San Francisco Deal Size: Invests $10M to founder and ceo Tula, Etvos, Marubi, Pibiplast, Current Beauty Investments: $35M in companies with $20M Espacolaser. Yes To, Jane Iredale to 100M in sales. WINDSONG CAPITAL PARTNERS/ Deal Size: Invests $10M to Deal Size: Invests $10M to Key Player: Leigh Randall, WINDSONG BRANDS $400M in companies with $5M to $50M in companies with $10M managing partner Headquarters: Westport, Conn. $1.5B-plus in sales. to $75M in sales. Current Beauty Investments: Key Player: Nik Thukral, Key Player: Scott Potter, TPG Lilah B. managing partner managing partner Headquarters: San Francisco Deal Size: Invests $3M to Current Beauty Investments: $30M in companies with sales MAIN POST PARTNERS SANDBRIDGE CAPITAL Rodan + Fields, Anastasia Beverly between $3M and $10M. Headquarters: San Francisco Headquarters: New York Hills (TPG Capital), Beautycounter, Key Player: William Sweedler, ceo Current Beauty Investments: Current Beauty Investments: Ilia, Ipsy (TPG Growth). Dr. Dennis Gross Skin Care, Peach & Lily, Youth to the People Deal Size: TPG Capital invests YELLOW WOOD PARTNERS Sugared + Bronzed, Not Your Deal Size: Invests $10M to $30M in $100M-plus in companies with Headquarters: Boston Mother’s, Milk Makeup companies of varying sizes. $100M-plus in sales. TPG Growth Current Beauty Investments: Deal Size: Invests $25M to $150M+ Key Player: Ken Suslow, founding invests $50M to $200M in PPI Beauty: Freeman Beauty, in companies with between $25M managing partner companies with $30M-plus Real Techniques, EcoTools, and $250M-plus in sales. in sales. Isle of Paradise, Tan Luxe, Key Player: Jeff Mills, SILAS CAPITAL Key Players: Paul Hackwell, Tanologist. managing partner Headquarters: New York partner, TPG Capital / Heather Deal Size: Invests $10M to Current Beauty Investments: Smith Thorne, partner, TPG Growth $300M in companies with MIDOCEAN PARTNERS Ilia Beauty, Herbivore, Hatch $20M and $250M in sales. Headquarters: New York Collection, Function of Beauty, TRAUB CAPITAL Key Player: Tad Yanagi, partner Current Beauty Investments: Everden, Zitsticka Headquarters: New York BH Cosmetics, Image Skincare Deal Size: Invests $3M to $10M Current Beauty Investments: Deal Size: Invests $30M to in companies with sales between Mana Products, EverPro GreyAway Beauty Rolodex is the first in $50M in companies with $20M $5M and $25M. Deal Size: Invests $15M to $50M a series identifying key players to $250M in sales. Key Player: Brian Thorne, partner per acquisition in companies with in the finance community and Key Players: Sara Parker, principal; $50M to $250M in sales. beyond. If there are aspects Matt Rubel, chairman SONOMA BRANDS Key Player: Mortimer Singer, of the industry that you would Headquarters: Sonoma, Calif. managing partner like to see covered in our NEW THEORY VENTURES Current Beauty Investments: pages, email your ideas to Headquarters: Houston and Hum Nutrition, True Botanicals, TRUE BEAUTY CAPITAL senior editor, beauty, Los Angeles Versed, Merit Headquarters: New York Allison Collins, at Current Beauty Investments: Deal Size: Invests $2M to $5M in Current Beauty Investments: [email protected]. Owa Hair, Selfish, Scotch Porter companies with $3M to $30M Aquis, K18 Deal Size: Invests $1M-$20M in in sales. Deal Size: Invests $1M to $3M in companies with up to $40M Key Player: Kevin Murphy, companies with more than in sales. managing director $2M in sales. Key Players: Nikki Eslami and Key Player: Rich Gersten, Rob Sebastian, co-founders STAGE1 FUND founder and managing partner and partners Headquarters: Anaheim Hills, Calif. Current Beauty Investments: TSG CONSUMER PARTNERS NORTH CASTLE PARTNERS Ellis Brooklyn, Freck Beauty, Headquarters: San Francisco Headquarters: Greenwich, Conn. Hatch Collection, Herbivore Current Beauty Investments: Current Beauty Investments: N/A Botanicals, Saie Huda Beauty, Hempz, Zoeva, PRESENTED BY: STRONGER TOGETHER A pioneer in prestige hair care, Olaplex has become an even greater powerhouse with the help of Advent International.

nown for creating the This board was not hard to recruit given bond-building hair-care the excitement around our business, but segment in beauty, Olaplex I don’t mean to imply that we aren’t in- quickly became a “one to tensely proud of this board. There are a watch” after launching in tremendous number of talented beauty ex- 2014. The brand checked ecutives out there who bring a diversity of Kall the boxes: from social responsibility to perspective, experience, and background to efficacious innovations as well as a loyal cus- the table. Any one of our independent di- tomer following. rectors would be a coup for a brand of our And as the prestige hair-care category size. They are a real testament to the future continues to evolve and rise, Olaplex has promise of the Olaplex business and brand. been leading the way by differentiating itself with revolutionary products while WWD Studios: How have you worked notably becoming the top market-share JuE Wong, chief executive Tricia Glynn, managing director through Olaplex to help the beauty gainer for the first half of 2020, according officer at Olaplex at Advent International industry during the pandemic? to data from NPD. J.W.: Needless to say, it’s been an incredi- Here, Tricia Glynn, managing director be a regular part of your hair health regi- bly tough year for the beauty industry, and at Advent International, and JuE Wong, men regardless of your coloring or styling we’ve worked hard to support the hairstyl- chief executive officer at Olaplex, discuss practices. In the near future, I believe we ist community. They are the backbone of the importance of innovation, scaling the will be thinking about hair and scalp health the brand and have been one of the groups brand, and working together for contin- the way we think about skin health today. Diverse boards hardest hit by the pandemic. We put to- ued growth. gether three key programs, which collec- WWD Studios: What were some of the lead to better tively contributed over half a million dol- WWD Studios: What brought you both goals you both had when you started outcomes, and lars to this community. to Olaplex? What made it compelling? working with Olaplex? First, we established the Professional Tricia Glynn: First and foremost, we had T.G.: Olaplex is a beautiful brand, and especially so Affiliate Program, where salon custom- die-hard Olaplex users inside Advent even our most immediate goal was to ensure a ers could purchase Olaplex products on before we noticed the brand’s incredible smooth transition to JuE and the executive when you are our website, and hairdressers earned a performance at retail and the support team’s leadership. commission on the sale while their salons Olaplex had inside the stylist community. Once the Olaplex team had made that navigating were closed. Second, we set up the Salon That’s always a great sign when important transition, our focus immediate- uncertainty.” Support Gift Card Program, where we you are a brand- and growth-oriented ly went to innovation, not just the No. 0 matched the value of Olaplex gift cards investment shop! launch we had in August, but a focus on Tricia Glynn that affiliated salons sold to their clients. Once we dug into the data, we also building out and investing in our lon- managing director at And third, Advent allocated a portion of its saw a hair market that was beginning to ger-term pipeline of new product launches. Advent International Global Relief Fund to us so we could es- premiumize, and in our minds was poised J.W.: Ensuring our collective vision and tablish the Olaplex Strong fund to support for long-term, innovation-led growth. goals were aligned was key for me even salon owners. Through this program, we Olaplex today fixes damaged hair, and each before I started at Olaplex. Since joining in were able to donate directly to profession- of our limited SKUs — No. 0 through January, I have focused on putting togeth- als and provide scholarships to aspiring No. 7 — solves a major customer or stylist er a team that has the experience to scale T.G.: Diverse boards lead to better stylists looking to further their education need. Advent felt that the Olaplex brand and accelerate the business, earning this outcomes, and especially so when you are in the space. could become the clear global leader in team’s trust, and making sure as a company navigating uncertainty. We are trying to efficacy-based beauty and wellness in hair we preserve the culture of nimbleness build a disruptive brand in a disrupting WWD Studios: How have these efforts care over the next decade. And JuE was the and agility. category. Our board members understand helped to strengthen the brand? most capable executive I could think of to prestige, clean and sustainable, the voice of J.W.: It has strengthened us as a commu- lead that effort. She and I had gotten to WWD Studios: You’ve worked to put the consumer, all things digital, and how nity. Olaplex is broader than just a set of know each other years earlier, and all of together a diverse board at Olaplex. to build a strong foundation for a high- products; it’s a community. We saw the us at Advent were thrilled that we were Can you tell us why this was a priority? growth business. outpouring of support from our end-con- able to partner with JuE on day one of our sumers, who helped their stylists by pur- ownership. chasing products on Olaplex.com, which Olaplex launched What made Olaplex really generated commissions for the stylists. JuE Wong: the bond-building compelling for me were the industry re- This continuous cycle of connection, en- category in hair ports of its exceptional business growth; its gagement, and conversion enables us to social relevance as shown by the communi- build authentic relationships with profes- ty’s high engagement; its defendable, pat- sionals and consumers. ented intellectual property; and Advent’s stewardship of the brand. WWD Studios: What does the future hold for the brand? WWD Studios: What makes Olaplex J.W.: Our most recent No. 0 launch stand out in the market? Who is exemplifies how the team came together, the target customer, and what are how we drew on our professional heritage their needs? to introduce a treatment product that J.W.: Olaplex’s 3 Ps make us different: resonates across all channels. I equate the our people, who put the brand before launch of No. 0 to a movie that has both themselves; our purpose, “doing well and critical acclaim and box-office success. doing good;” and our products, which, Olaplex built a strong foundation with with our proprietary patents, allow us to its cohesive team, proprietary patents, and deliver scientifically proven, best-in-class a unified purpose that makes us stronger innovations. together. With this solid base, we have a Our target customer is discerning, does huge potential to evolve our brand through their research, and trusts recommendations distribution, innovation, and expansion from their stylists and their social commu- into new channels and markets. nities. They want healthy hair with visible T.G.: It’s rare to see brands of this shine, body, and smoothness. Olaplex fulfills size growing so rapidly and with such their need to look as good on the outside as a passionate consumer base. And we they feel on the inside. think we’re only in the early innings of T.G.: I’d only add that Olaplex is univer- all the growth opportunities available sal. Our products work universally on all to the brand. I believe that with JuE hair types. We are likely best known for and her team leading the way, Olaplex protecting and repairing your hair in the will keep solving new pain points for hair-coloring process, but Olaplex should our customers. ANALYZE THIS 16 NOVEMBER 20, 2020

Why Isn't Beauty Investing More Inclusive? Access to capital, especially for female founders of color, remains a challenge. BY ALEXA TIETJEN

MUCH WORK REMAINS for the firms presents challenges felt by In interviews with brand founders said. “Diversity of gender and color beauty investment landscape to be women of color brand founders who received investment, access is needed because it allows for there more inclusive. whose target audience is women of emerged as the top challenge to be more opportunity for people to Despite progress in recent years color. “Oftentimes,” Williams said, they faced. take diverse bets, whatever that is.” toward gender diversification, “the investor doesn’t understand Former attorney Alisia Ford said Access to capital, said Shelly Bell, venture capital firms’ highest ranks that consumer.” she found an angel investor for her founder of Black Girl Ventures, which remain largely homogenous. A 2018 “There’s always the beginning of skin-care and wellness start-up, Glory, has distributed more than $700,000 report from the National Venture the meeting, where you’re talking which curates and sells products to 102 brand founders, should take Capital Association and Deloitte about some shared experience,” she formulated for melanin-rich skin, on on the form of the needs of the found that out of a pool of 200 U.S. said. “I think a lot of women of color LinkedIn. The contact introduced individuals seeking it. firms, 14 percent of investment are at a disadvantage because I don’t Ford to other angel investors, as well “Investing in Black and brown partners were women. The study also know that many people sitting in the as venture capital firms — a network communities looks like multiple found that the majority — 80 percent investor seat are interacting with share Ford said needs to happen layers,” Bell said. “When we say — of investment partners were white, women of color on a regular basis. more often in the industry. ‘create access to capital,’ we mean with 15 percent identifying as Asian “You’re having to spend your whole “Investors need to not only ‘getting you access to resources and or Pacific Islander, 3 percent as Black meeting educating [the investor] on be more inclusive, but create capital depending on what that or African American and 3 percent as why this is a valuable consumer or accessibility,” Ford said. “Not means for you.’ Access to capital is Hispanic or Latino. why this is an opportunity rather everyone has someone that can make going to look like a better job, grant Women are making great than talking about your specific warm introductions for them.” money, investment dollars.” strides in securing funds for their point of difference,” she continued. In pursuit of funding for On Nov. 24, Black Girl Ventures businesses. The number of women- “Ultimately, you don’t even get to Ceremonia, her hair-care brand will host a “Shark Tank”-like virtual led companies valued at $1 billion that point, because you’re spending celebrating Latinx heritage, Babba C. competition in partnership with Rare or more reached a record high last so much time upfront educating.” Rivera raised $1 million in a pre-seed Beauty Brands. Prizes for the top year — despite a $189 billion gender For brand founders of color, knowing round with participation from SoGal three winners come in the form of gap in funding, according to a that the odds of getting funding are Ventures, XFactor Ventures and capital and corporate mentorship. Crunchbase report. slim can be enough to thwart a pitch. Female Founders Fund. Williams of VMG said that the But intersectionality is key. “As a Black entrepreneur or Black Angel investors are more open pressure to diversify should be placed A 2019 report by RateMyInvestor founder, you’re told that we don’t to “taking a bet on unconventional on investors, as there is no lack of and Diversity VC found that out of raise a lot of money,” said Keenan founder stories,” Rivera said, whereas founders of color who are worthy nearly 10,000 venture-backed founders, Beasley, founder of hair-care brand venture capital firms tend to try to of investment. Hiring managers more than three-quarters were white. Sunday II Sunday and president of “replicate the success they know should allot an appropriate amount About 18 percent were Asian, while 1.8 Venture Noire, a venture capitalist from their past portfolio companies.” of time to find diverse candidates, percent were Latino. Only 1 percent of organization that works with “Unfortunately, most of their as opposed to rushing the process in those founders were Black. more than 1,000 minority-owned portfolio companies have very order to meet a quota. “The landscape still has some work businesses. “What happens is you homogenous backgrounds,” she added. “As a Black woman, I know when to do,” said Alisa Williams, partner build plans that are fairly small and Éva Goicochea said that when she I’m in the room to check a box of at VMG Partners. “I don’t think pragmatic. You work against yourself first approached funding for sexual some sort,” Williams said. “If you’re there are many investors of color because then that’s not exciting to wellness brand Maude, which closed bringing someone in to check a in general. I personally don’t know the venture capitalists. another round of seed financing this box, not because you respect their of any Black woman on the growth “It becomes this confidence week, women investors were “harder perspective or want to help them equity side in the beauty space. I’m conundrum,” he continued. “We on the idea” of the brand. develop or see value in what they sure there are some, but the point is, don’t have to always showcase how “I think that has to do with the bring to the table, you’re going to have I don’t know them.” pragmatic the approach is. It’s OK to be fact that [women] are judged more a hard time keeping them. It’s quite

Lack of diversity at investment disruptive.” harshly for their investments,” she easy to tell when that’s happening.” Collage by Jenna Greene; Images Adobe DECEMBER VIRTUAL EVENTS

register WORDS OF WISDOM 18 NOVEMBER 20, 2020 Signed, Sealed, Celebrated How beauty’s most notable bankers celebrated their first big deal. BY ALLISON COLLINS

JANKI GANDHI MANAGING DIRECTOR, GOLDMAN SACHS If I remember correctly (it has been a while), the first deal that I closed was one that got done in under three months from start to finish, so it was a sprint the entire way. MICHAEL TOURE LINDSAY CARLSON The deal closed on a Thursday in the first week of January, and FOUNDER & CEO, MANAGING DIRECTOR, I was finally able to celebrate the holidays and my birthday that TOURE CAPITAL WILLIAM BLAIR weekend and also catch up on much needed sleep. A couple of months after I gave my rockstar team I left Goldman Sachs high-fives and thanked more than seven years them for their amazing ago now, I closed my very support. Then I booked a spa first transaction as an appointment and escaped independent adviser. the office to relax and I had just launched recharge. Ended the day at

Toure Capital; I was dinner with my husband lucky enough to sign and our dear friends. this fast-growing beauty brand and managed to find them a great minority ILYA SEGLIN SHAUN WESTFALL partner. This was my MANAGING DIRECTOR, MANAGING DIRECTOR, very first stand-alone THREADSTONE ADVISORS JEFFERIES achievement. I celebrated This was prior to the time A pivotal moment and this by PROUDLY talking I started focusing on cause for celebration goes (bragging?) about it to beauty products and clear back to 2009 when I anyone in the industry involved a fertilizer advised on the that wanted to listen company (yes, both investment from Castanea. It to me…and paying enhance blooming, but was the start of an amazing for my wedding in ANDREW SHORE similarities end there). life-altering run, and the the south of France. MANAGING DIRECTOR, The deal had to close by most important part — this MOELIS year-end so my Christmas is when I met my wonderful I took my family on holiday was spent wife of more than 10 years, vacation and then bought finalizing everything — Lauren. The amazing Wende a new pair of cuff links. when the deal was finally was kind enough to set us up signed two days before while I was working on the New Year’s Eve, transaction. Thus, not only I went home and booked did I get the deal, I got the a trip to Paris. No trip to girl — and the rest is history. Paris can be complete without the obligatory stop at the Hermès KELLY MCPHILLIAMY flagship. On that trip, MANAGING DIRECTOR, I began my tradition HARRIS WILLIAMS of indulging in slightly My first beauty transaction involved extravagant self-gifting advising serial entrepreneur and investor Doug Von Allmen after each closed deal. on a minority sale of his salon distribution business, Beauty Alliance, to L’Oréal in 2006. The deal was significant as it was L’Oréal’s first move to consolidate salon distribution in the VENNETTE HO U.S. I had the chance to work with Doug again a few years later MANAGING DIRECTOR, selling the Sexy Hair brand. Looking back, it was a busy time FINANCO professionally and personally. With a then 1-year-old daughter I called my client and at home, I’m pretty sure I loaded her in the baby jogger and took everyone involved to thank off for a relaxing run. But that’s not to say I haven’t had some and congratulate them; memorable deal celebrations along the way. after all, deals are a tremendous team effort. And then I went home to take a long, long nap. EDUCATING, ENGAGING, AND EARNING THE TRUST OF YOUR CUSTOMER ONLINE AND OFFLINE HAS THE BIGGEST IMPACT ON BRAND SALES. OUR PURPOSE IS TO CREATE AND DELIVER IN-STORE AND ONLINE BRANDED EXPERIENCES THAT PROVIDE MEANINGFUL CHANGE FOR OUR BRAND PARTNERS.

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The 2020 WWD Beauty Inc Awards, celebrating the power of purpose and beauty as a force of change. SAVE THE DATE! Thursday, December 10th 10-11 AM ET

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