Could John C. Malone, chairman of Liberty Media Corp., be beauty's next mogul?
In a move signaling deeper involvement in the industry, Malone's media empire has swallowed a minority stake in drinkable and topical skin care brand Borba.
The acquisition was made via the group's Liberty Interactive division, which oversees home shopping channel QVC. It isn't Liberty Interactive's first investment in the beauty world — the company also has stakes in brands Bare Escentuals and Philosophy.
And the deal might not be Liberty's last, marking a further incursion by outside moguls into the fashion and beauty worlds — a la Harvey Weinstein's investment in Halston and Ron Burkle's stake in Sean John. Meade Rudasill, chief operating officer of QVC, which is Liberty Interactive's largest holding, described the Borba deal as a precursor to a further broadening of the company's beauty investment portfolio.
"We wouldn't predict a specific pattern, but you can expect that you would see more of this over the next two to three years," Rudasill said. "Our approach is that it has to be the right company, the right spokesperson and the right ownership at the right time."
Although terms of the deal were not disclosed, industry sources estimate Liberty's investment in Borba to be around $5 million.
Founder Scott Vincent Borba remains as chief executive officer of Borba and the largest single shareholder in the Beverly Hills-based company. Brad Greenspan, the founder of MySpace creator Intermix Media Inc. who invested $3 million in Borba two years ago, will maintain a small stake in the company.
A yet-to-be-determined QVC executive will be given a seat on Borba's board.
"Our greatest value in partnering with emerging brands is that we can help them in our TV model and ramp up their volume," said Rudasill. "We are not looking at $200 million brands, [but] smaller brands. If you can see the potential and there is an established base and we see that it can grow, [that type of brand] is more of what we are looking for."
Rudasill continued that the investment strategy is not based on specified sales or growth rate targets alone. He cautioned that, with small companies, setting absolute targets can lead investors astray by directing their interest toward one-hit wonders. "You don't want to either be enamored by high growth on something small or not partner if you see there is an underlying thoughtful innovation," he said.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"