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.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast