A Korean manufacturer has taken a controlling interest in Englewood Lab, which makes products for more than 100 beauty brands.
Chief executive officer David Chung, who said he sold his controlling interest to Cosmecca Korea for around $57 million, will use the money to invest in Farmacy, a skin-care brand he cofounded with Mark Veeder. He said he is also considering making other strategic indie beauty investments.
A replacement for him at Englewood has yet to be determined, he said, but it is likely the company will promote from the inside.
“Englewood Lab will be totally business as usual,” Chung said. “Nothing will change because the M&A deal is not domestic.…It’s a company from Korea that has no presence in America, so they really need everyone in tact. The people inside will remain running the business.”
“They want to bring their technologies here, formulas and operational efficiency, but not run the company,” Chung said. Englewood Lab received a minority investment from Japanese manufacturer Nihon Kolmar in 2017.
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Chung said he decided to sell his 34.7 percent Englewood stake to focus on Farmacy, which was founded in 2015. The skin-care brand is distributed through Sephora and QVC, and recently expanded to Sephora Australia, Sephora Singapore and Sephora Europe, Chung said.
Industry sources said Farmacy is expected to reach around $27 million in sales for 2018. The business makes skin-care products that are infused with Echinacea GreenEnvy derived from plants at Veeder’s upstate New York farm. The product lineup includes Green Clean, $34, Honey Potion Renewing Antioxidant Hydration Mask, $56, and a range of serums, masks and lip balms.
“Farmacy is growing very rapidly and really needed my attention and more working capital,” Chung, ceo of Farmacy, said.
Looking forward, Farmacy has four more product launches slated for this year, and is planning to launch an affiliate in Korea, Chung said. Farmacy will launch in Korea at the beginning of 2019 — the product lineup and brand story will remain the same.
Industry sources previously indicated Farmacy was in the market looking for a financial partner — Chung acknowledged the possibility of taking on investment, and said he is open to bringing on a “partner” with connections in Asia, as well as e-commerce and influencer expertise.
“It could really help us grow,” Chung said. “Like putting gas on a fire.”
With access to more working capital, Farmacy is also planning to make additional hires, especially in digital marketing, Chung said.