Social media meltdown or calculated public relations strategy?
This is what the beauty industry is trying to figure out in the wake of Deciem founder Brandon Truaxe’s peculiar behavior the past several weeks. What started as a series of Instagram videos has escalated to the firing of co-chief executive officer Nicola Kilner. Deciem also lost another key executive this week: Stephen Kaplan, who resigned as chief financial officer, WWD has confirmed.
Truaxe doesn’t seem too concerned with the management shakeup. In a phone interview Thursday, Truaxe, who has no intention of hiring a ceo, claimed he terminated Kilner because of an alleged conflict related to an employee who had been with him “from Day One.”
“It’s my company. It’s my house. If someone doesn’t like how I decorate my house it doesn’t matter if they’re my mother or a guest, they have to leave the house,” he said. He added that more terminations are possible — (“We still have a few people who need to go — I can feel it”) — and that allegations of drug use and psychosis are untrue.
“It is not crystal meth that makes people build really large businesses,” he said.
Things took a turn for the unusual on Feb. 1 when Truaxe made a declaration on the brand’s Instagram account that he would step down as ceo and be known as “worker” going forward. This was followed by a string of posts with rambling captions and selfie-style videos filmed by Truaxe.
It remains to be seen what impact Truaxe transitioning into his “worker” role and Kilner and Kaplan’s departures will have on the fast growing company — 10 U.S. store openings are slated for 2018 alone — but three executives down in a matter of weeks is never a good sign.
“My business is growing and it’s growing peacefully, and whoever doesn’t like it, I’m going to ask them to leave,” Truaxe stated.
When asked about the recent events, Truaxe was clear that this isn’t simply a period of growing pains — it’s one of “jealousy pains.” He alleged former employees and competitors are stoking the controversy fire because they are jealous.
“They know The Ordinary is going to destroy skin care, it is much better and much cheaper. What they should do is instead of fighting me, be with me — go fix your brands, create honesty. Then there will be healthy competition,” Truaxe said.
When contacted for a statement, Kilner, who spoke at the WWD Digital Beauty conference in early February, said, “I love Brandon and the team unconditionally and am too hurt to comment further.” Before Deciem, the parent company of cult skin-care line The Ordinary, Kilner was a buyer for Boots.
The controversy is not doing anything to slow down sales, Truaxe indicated.
“All they’re doing is creating more sales for me,” he added.
A high-level employee at Sephora reportedly said Deciem’s products are not just “flying off the shelves” but completely selling out. This has led some in the industry to believe that all of this is just masterful public relations stunt orchestrated by Truaxe to drum up buzz online, and as a result sales.
According to Truaxe, he owns 72 percent of Deciem. The other 28 percent is owned by the Estée Lauder Cos. Inc., a 70-year-old traditional beauty player that invested in Deciem in 2017, Truaxe said. In a later statement, Lauder said, “The Estée Lauder Companies is a minority investor in Deciem, and, as such, we do not have the power to control the company’s operations, social media or personnel decisions. We believe in Deciem’s incredible creativity, innovation and product offerings.”
“Lauder is behind me more than I am behind me. I would never go and fight Leonard Lauder — he fully agrees with me,” Truaxe insisted.
“They are quietly concerned and watching,” said a Lauder executive who requested anonymity. “They are trying to figure out what the hell is going on there and protect their investment. They’re trying to figure out what the hell is going on with this guy.”
Prior to Kilner’s exit from the business, this same source indicated that the path was one more of coaching than replacement.
“It’s more trying to figure out what is happening and maybe coaching that young ceo [Kilner]. What are you supposed to say without saying, ‘Your boss is an idiot,’” the source added.
The Deciem drama comes on the heels of the company’s launch into the U.S. market, which was expected to more than double the size of the business. Deciem is in the midst of opening stores and the company just launched its main line, The Ordinary, with Sephora online.
Popularity of The Ordinary, which makes products with names like Magnesium Ascorbyl Phosphate 10% and Granactive Retinoid 5% in Squalane that sell for $9.60 and $13.90, respectively, is exploding. The company’s earned media value gained 3,179 percent from 2016 to 2017, according to Tribe Dynamics, which noted that the conversation around that brand has been positive, focusing on efficacy and affordability. Influencers have also credited the brand with creating low-cost dupes of other skin-care products. Tribe noted that in January alone, The Ordinary gained EMV, “which could have been due to negative publicity,” said Brit McCorquodale, head of marketing and communications at Tribe.