Beauty Business News June 2023

One of the new beauty businesses that keeps on cropping up is GetHarley, a video skin consultation site that allows you to be issued with medical grade skin care (i.e. skinceuticals) created in a bespoke service by one of their clinicians. Having raised $15 million in first rounds of funding, the business has now been offered $52 million. Several beauty curation services have surfaced in the past few years but this one looks like it has serious backing. Founded in 2019 GetHarley describes itself as a telehealth platform that gives access to qualified professionals. Online consults are £40 for £30 minutes – or you can pay up to £150 for senior level consultations. Part of the business model is to sell skincare so it’s likely you may find it hard to leave having bought nothing. Your view on this will depend upon how you feel about dermatologists (i.e. doctors) flogging skincare.

Lancome has been in a spot of bother on TikTok after discontinuing their deepest toned shade – Teint Idole 560 suede C. To add insult to injury, because deeper toned foundation is still underserved in beauty compared to lighter toned foundations, the brand’s newly reformulated foundation Teint Idole Ultra Wear sees the renaming of Suede C555 to C540 and is now the alternative for three separate deep shades that previously existed. While Lancome has expanded its shades overall in the past few years, and particularly after employing Lupita Nyong’o as ambassador, keeping one shade to service three tones has not met with approval from those who no longer have an exact match.

Just as P&G closed their Opte skintech brand that comprised an inkjet wand to apply a tinted serum and target pigmentation at the same time, by scanning complexions in real time to see where the product is needed, it occurred to me that I have not seen sight nor sound of DuoLab for a considerable length of time. L’Occitane owned DuoLab, a thermo-cosmetic device that warms skin care to the optimum temperature to put on your face. Links from the L’Occitane site to DuoLab go nowhere. It seems that neither of these products hit the tech sweet spot for users but why?

 

It looks like the happiness rating of THG shareholders has dropped significantly at the suggestion of an 11% rise to the Chief Financial Officer, Damian Sanders’ salary. Sanders was hired in January after serving two years as an independent non-executive director. It’s recommended by an advisory company that they reject this idea, as well as suggestion the shareholders vote against a re-election of another non-exec on the grounds that they are ‘an insider’ on the pay committee. Furthermore, it seems that justification for an 11% pay rise at a time of falling THG share prices, can’t be found.

Braun Silk-expert IPL device has found itself on the wrong side of the ASA (Advertising Standards Association) after three complaints about a TV ad for claiming that their hair removal device resulted in permanent hair loss without providing evidence to back that claim up. ‘Permanent’ is a moveable feast in beauty world language – permanent hair dye would be a very good example. It’s never forever. IPL isn’t forever either – commitment is key and you’ll need to do it regularly to maintain hair free legs/arms. Unsure how the word permanent got approved for a TV ad, when their website is perfectly clear about what is possible and what isn’t. The voice over promised permanent hair removal or your money back. Inexplicable.

Of all the brand categories to suffer in a tight economic climate, you’d expect scented candles to come fairly near the top of the list as unnecessaries. But Otherland Candles has just been bought by Curio Brands who already own popular-in-the-USA candle brands Thymes and Capri Blue. Otherland candles are $35 a piece but have been brought on to the Curio roster to target Gen Z born between 1997 and 2012 – who are these wealthy teens and twenty somethings? It’s a good example of how the market takes you by surprise – while other brands are reducing their inventories left, right and centre, a candle brand is expanding theirs.

Speaking of reduced inventories, REN has done a savage cut of 29 products! Not only that, the brand has put the brakes on five new launches. While nobody will be sorry to see the name ‘Keep Young & Beautiful’ disappear, because it was always at odds with their broader messaging, there will be favourites that have vanished. It’s a smart move – there are so many brands who could benefit from a cull before introducing yet more products. Indi brands that flourished in lock down are disappearing left, right and centre – H20 and Lilah B, to name a couple. Selfless by Hyram has been booted from Sephora and likewise Item by Addison Rae. In fact, ‘influencer’ beauty brands seem to be struggling to survive the most. At the start of Instagram and when TikTok was just a twinkle in someone’s eye, what was attractive about brands with present and available to reach founders was the social connection. Several years on, the presence and availability seems to work against influencer brands. It just takes one cancellation and that’s it – game over. Inventory cuts are welcome in this noisy space – cleaner and leaner is best.

Anyone know why Fabrizio Freda, CEO of Estee Lauder was paid $66 million in 2022? During the pandemic, staff pay was cut, and hundreds of jobs were cut. There are vacancies everywhere, press offices are ghost towns, and shares are down 22% (Yahoo Finance) at the last time of looking. According to Time Magazine, Freda is named as No.2 on the ‘most overpaid CEO list’, although I’ve done due diligence here and checked via Yahoo Finance who have him earning $65.9 million in 2021, and $25.48 million in 2022. Nonetheless, those are numbers that have us questioning what exactly he has done for this payroll apart from buy all of Tom Ford for $2.8 billion. Asking for several Estee Lauder fleers who could bear it no longer or were ‘made redundant’.

Finally, the audit findings are in after Revolution failed to deliver results for year ending Feb 2022. In a nutshell, after concerns raised by auditors, the board appointed independent advisers and forensic auditors to investigate anomalies, which uncovered accounting issues. I’ve read so many features on this and my take away, without being at all wise to financial matters, is that most issues centred around going public on AIM (sub-market of the London Stock Exchange). It was found by the auditors that Revolution had overstated its sales by £9 million and the founders had taken out £1 million loans without informing the board. There are also issues around the sale of Medichem to MUR – the owner of Medichem is (or was) the co-founder of Revolution. Medichem is a wet goods manufacturer (lotions, shampoos, etc). Share trading was suspended, personal loans to distributors were uncovered (and thought to be so distributors could buy more stock and therefore Revolution could present a better forecast – example: MUR sold product worth £9.6 million in Feb 2022 right before the financial year ended and that should not have counted towards revenue). Both CEOs have left the company now – and no doubt an extra sting in the tail for the ex-owner of Medichem. The auditors’ findings question whether the business is still viable but it’s in good hands – the incoming CEO, Bob Holt, has embraced the investigations and is committed to putting systems in place that mean none of these events can happen again. As you know, I’ve had (happy) ties with Revolution in the past so my personal feelings on this are mixed but overall I think I just feel really very sad about it – I miss the friend I knew.

Speaking of friends I miss, a documentary about Brandon and The Ordinary is on the cards, directed by Aref Mahabadi, a founding member of DECIEM, The Ordinary’s parent company. It’s promising a behind-the-scenes account of the stages of DECIEM from when Brandon first had the spark of the idea for a brand that was completely different to any others through to the hectic brand growth and the complexities that ensued when his health declined. It’s slated for a December release.

 

Sources & Resources: glossy.co, globalcosmeticnews, yahoofinance, ASA, voguebusiness.