Will founder-dependent beauty brands survive?
Hailey wants to sell Rhode but does anyone really want it?
Happy Friday ⋆.˚ ᡣ𐭩 .𖥔˚
Hey everyone! If you are receiving this email, that means you are reading the Seventh Cute, Kind Of Weekly Newsletter! I was going to explain what I actually write about when I say I am a beauty writer. I then read a substack and decided to dedicate this newsletter to founder-focused beauty brands and whether or not they will survive.
I hope you enjoy - Laila
☆ NEWSLETTER #6: BABES, WE ARE ENTERING A TRADE WAR (Free) — Ladies, you cannot “I’m just a girl” your way out of this one. A U.S. recession (potential) can be felt by everyone around the world. While reciprocal tariffs are paused for 90 days, except for China, everyone is asking: “what was the point?” Anyways, in this newsletter, I talk about how the trade war would impact the beauty and fashion industries, and what actually is a recession indicator.
Do you want to buy Rhode Beauty?
Obviously, a silly question for the average person but not for investment bankers at JPMorgan Chase and Moelis, who are interested in the brand’s $1 billon price tag. For reference, Rhode has made only $200 million in sales since launch.
In Sydney Wingfield’s Substack Skin Reset, an insider revealed that buying founder-dependent brands like Rhode, Rare, Mario, and more, are too risky since they are too young, got too big too fast, and don’t have proper distribution.
I would highly recommend to read the newsletter. I linked it above.
This reminds me of when 51% of Kylie Cosmetics was sold to beauty conglomerate Coty for $600 million in January 2020, which made it a $1.2 billion valuation. However, it was not what it seemed. From Forbes:
Then there were Kylie’s financials. Revenues over a 12-month period preceding the deal: $177 million, according to the Coty presentation—far lower than the published estimates at the time. More problematic, Coty said that sales were up 40% from 2018, meaning the business only generated about $125 million that year, nowhere near the $360 million the Jenners had led Forbes to believe. Kylie’s skin care line, which launched in May 2019, did $100 million in revenues in its first month and a half, Kylie’s reps told us. The filings show the line was actually “on track” to finish the year with just $25 million in sales.
I am not accusing of any the listed brands above of lying about revenue in order to be sold lol. I just wanted to give background to my next point: does anyone care about Kylie Cosmetics anymore?
I think the KC gained a little traction this year when Alabama Barker included some complexion products in her GRWMS on YouTube.
However, I feel like Coty buying Kylie Cosmetics was a waste of money (no shade). Even the website is giving when boohoo bought Nasty Gal (I’m not over it still).
Anyways, this plays into the idea that brands, whose marketing heavily involves its founders, may not survive in the long run.
For example, we recently learned that Pat McGrath Labs is struggling and had about three rounds of layoffs, which I talked about in a previous newsletter here.
Usually when brands are sold, founders take a more lax approach, which I think ends up hurting the brand down the road.
Even with Glossier, Emily Weiss was the face of the brand when the idea of the girl boss was popping off in 2015, then she kind of disappeared. She is not a mainstream celebrity but was a role model among young women who wanted to build their own businesses.
I do not blame her though — running a big business is a lot. I mean when you are burnt out, taking the truck-load of money and taking a long vacation sounds very appealing. Note: Glossier has not been bought but CEOS changed in 2022 from Emily Weiss to Kyle Leahy, who was at Nike, Cole Haan, and consulting (?), according to LinkedIn.
It’s kind of sad because Glossier low-key fell off. I can say this because I was an avid reader of Into The Gloss and was one of the first people to buy Glossier when it launched in 2014.
I talked about Glossier dropping three new perfumes in a span of a year in the same newsletter I mentioned above. They are not dropping them for funsies but allegedly to be bought, since the Glossier You fragrance does extremely well compared to its other makeup and skincare products.
I was shocked when Leahy became CEO and announced that Glossier is going into Sephora, since Glossier always touted DTC and online-first ecommerce as its unique approach for consumers.
I feel like beauty brands that are special, even being founder-dependent brands lose their sauce once they go through changes. Like when you lose the visionary, beauty girlies, you essentially lose your brand.
I am believer of the idea that if beauty brands put their marketing first and products second, maybe it is beneficial short-term, but they just end up in the long-line of brands that disappear into the unknown. They are kind of just there.
I feel like this is just a rant now lol. Anyways, please subscribe so you can answer the polls below. (For some reason, Substack only lets subscribers answer polls)
No real thoughts here. Enjoy this mood board I made in 10 minutes to reference the previous section.
I watched Peter Pan The Musical with my friends! It was super cute and definitely for children and parents BUT it was fun. If you have kids or a child-like sense of wonder, I would recommend to go. The effects were cool and I loved the stage design.
I think today, when I do my makeup, I’ll watch either the animated Peter Pan (1953) or They Came Together (2014). Random, but the animated Peter Pan was made in the 50s?!! I love this style of 2D animation and wish we could go back (Just for the animation, nothing else lol).
I do not know if you have seen the ABC show Once Upon A Time but the entire Peter Pan arc was so gooood. Great show on ABC, especially to watch with different ages.
Instead of working, I wrote this post lol. Please like, comment, and share! If there are grammar mistake, I apologize lol.
Have a good weekend ❤
Love,
Laila
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