San Francisco-based private equity firm JH Partners has bolstered its burgeoning beauty portfolio with the acquisition of Ouidad, the investment firm's first hair care brand.
JH Partners purchased a majority stake in curly hair specialist Ouidad for an undisclosed amount. Ouidad's namesake founder, who only uses her Lebanese first name, and Peter Wise, Ouidad's husband and business partner, will remain with the company.
However, Hillary Solomon, a former senior vice president of marketing at Kiehl's and executive director of marketing at Frédéric Fekkai, will replace Wise as chief executive officer. Ouidad will continue to concentrate on product development and education.
"We were planning on expanding the company and bringing in financing and all of a sudden JH approached us as well as several other companies," said Ouidad. "The partnership with JH will take us to a new level. They lend a hand to help you move forward. They don't come in and run it. They really empower you."
Michael John, a senior partner at JH, explained that JH's interest in Ouidad stemmed from Ouidad's high-profile presence at the company and the brand's leading role in the curly hair category. Ouidad, based in Danbury, Conn., generated estimated revenues in excess of $10 million last year and, year-over-year, the company has been growing at a 20 to 30 percent clip, according to John.
"We truly feel it is differentiated, and we have a strong feeling that she can be successful in a multichannel strategy," he said. "We had a great experience growing Bare Escentuals through a multichannel strategy, and we look to do the same thing [with Ouidad]."
Ouidad's sales are currently limited to a flagship salon, located on 57th Street in Manhattan, the company's Web site and affiliated salons that carry Ouidad's curly hair products. Ouidad said she pulled back on growth to improve the corporate infrastructure, and the brand's affiliated salon program has just eight salons at the moment.
With JH's assistance, Ouidad plans to launch a second flagship salon in Los Angeles within a year and eventually plant locations elsewhere. In addition, John indicated that Ouidad hopes to increase the number of salons in its affiliated program, sell to chains such as Sephora and Ulta, and head to television with both infomercials and appearances on shopping networks.Ouidad was introduced to JH's model through Eli Halliwell, ceo of Jurlique, a skin care brand in the JH roster, and former general manager of Bumble and bumble, who originally met Ouidad and Wise in spring 2006. After he joined Jurlique, he sat down with Ouidad and Wise again to discuss the pair's aspirations and began to lay out the case for a deal with JH.
Halliwell will sit on the board of Ouidad, as will Michelle Taylor, JH's senior operating partner and former president of Kiehl's. John, Ouidad and Wise will fill the remaining positions on the five-person board.
When she first started her business in 1983, Ouidad said that bankers and beauty editors told her she was crazy to focus on curly hair. Since then, major players, including L'Oréal and Proctor & Gamble, have crowded the category that Ouidad once reigned over alone.
"Competition is a compliment," she said. "If anything, it just helps with advertising. I am grateful."
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