California is nicknamed the Golden State, but for beauty brands, a better moniker might be the Green State. Beauty conglomerates and private equity firms are pouring cash into California at an unprecedented rate. L’Oréal is perhaps the state’s biggest beauty sugar daddy. In less than two years, it bought three Southern California brands: NYX, Baxter of California and Urban Decay. But it’s hardly alone. The Estée Lauder Cos. nabbed Smashbox, Coty Inc. snapped up OPI Products Inc., Henkel AG added Sexy Hair Concepts earlier this year and the list goes on.
What’s behind the great innovation machine that is California? “It’s in the water. It’s in the sunshine. It’s in the creativity,” quips Mona Monaghan-Kelliher, who recently moved from New York to L.A. to become chief marketing officer of Milani. Vennette Ho, managing director at Financo, says, “The West Coast is a huge center of innovation for the beauty industry, and is its own little microcosm in terms of talent.” In particular for beauty, California’s pole position in digital technology, celebrity culture, the health and wellness movement and as the gateway to Asia makes it fertile ground for beauty upstarts.
No wonder, then, companies born there have become attractive acquisition targets, a fact not expected to change soon. Talking about the mergers and acquisitions market, Andrew Charbin, senior vice president at The Sage Group, says, “Deal volume will stay high for the rest of this year. There are all kinds of records that could be broken. We’ll see a good number of companies that aren’t in market now consider going into it fourth quarter this year or beginning of next.” Here, 10 California-based brands that industry insiders say beauty buyers would be happy to get their hands on.
Josie Maran personifies the golden girl ethos of Southern California, but the former model has channeled the business savvy of her birthplace into her role as beauty entrepreneur. “I’m from Silicon Valley, so it’s in my DNA,” says Maran. Undeniably, the change-the-world, go-with-your-gut gusto of Silicon Valley is ingrained in Maran, who launched her prestige eco-conscious cosmetics brand in 2007. “I would always ask makeup artists if they had something that was healthier, but they would say it was impossible to have healthy, natural products that were good enough. I really wanted to prove them wrong,” she says. The argan oil that’s become a centerpiece of Maran’s line was a fortunate accident. “I discovered it on a modeling trip and fell in love,” she recalls. Today, argan oil is used in everything from her mascaras to moisturizers, and accounts for a third of sales. Prices range from $6 to $96 for the L.A.-based company.
A brand so dependent upon a single ingredient might seem like a risky bet. But argan oil is the liquid gold that transformed the format into a significant category in the U.S. “Josie Maran will keep its first-mover status,” says Jani Friedman, vice president of new brand development at Guthy-Renker and a former managing director at Demeter Group. “They’ve made it very easy for people to get into oils.”
If Maran wanted to sell—which she and her husband, brand president Ali Alborzi, insist they have no intention of doing—Friedman and financial sources say it would field plenty of offers. Alborzi said sales have grown from $1 million in 2009 to more than $100 million annually, which could garner $200 million to $500 million in an acquisition based on recent multiples.
“We are self-funded, and we plan to remain so. I meet with people because it’s important to understand the climate,” says Alborzi. “Our vision is to pass it down to our kids, but who knows what the climate can look like, though we have definitely gotten over the hurdle of needing a money injection through a partner.”
Currently sold on QVC and in Sephora in the U.S., the brand is expanding internationally and considering infomercials and stores. “We have gotten here through intuition and Josie’s drive,” says Alborzi. “We think there is a huge potential to grow even bigger.”
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye