Deciem, the multibrand beauty company behind cult skin-care hit The Ordinary, is gearing up for phase two — and it includes relaunching at Sephora.
This year has been a trying one for the Canadian business.
Deciem’s founder, Brandon Truaxe, was ousted via court order in October after unilaterally deciding to shutter the company and revealing the news on Instagram. Before that, he’d taken to posting erratically on his own and the company’s social media accounts, and fired Nicola Kilner, who had been co-chief executive officer of the company. Truaxe later rehired her, and when he was removed from the business, Kilner was appointed sole ceo.
In her first interview since Truaxe’s removal, Kilner spoke exclusively with WWD to outline Deciem’s plans for the future, which includes relaunching The Ordinary with Sephora in January, and building out some of the company’s younger brands, like Hippooh, a baby line, as well as Loopha and HIF.
While Deciem’s sales figures remain in good shape — sources said the company had its biggest month in November, with 27.3 million Canadian dollars, or $20.4 million, in wholesale sales (all subsequent figures are in Canadian dollars) — its employee base was not in great spirits, and complaints abounded on sites like Glassdoor.
Kilner is working to return Deciem to what she says are its core principles — authenticity, integrity, design, function and innovation — and some new ones: kindness, efficiency, fairness, and “doing things which are more thought through,” Kilner said. She’s also focused on making sure Deciem is “one of the best companies in the world to work for,” she said — “with different feedback we’ve seen this year…it hasn’t always been that place.”
Since she took over, she’s worked to stabilize the company’s workforce, which now includes more than 600 employees.
“After everything happened, my main focus was to make sure that our people were where they need to be,” Kilner said. “That they were happy, they were feeling comfortable, they were inspired again — that’s where most of my focus has been.”
The business has rehired Stephen Kaplan, who quit his job as chief financial officer after Kilner was fired in February. He is now chief operating officer. Prudvi Kaka, who spearheads scientific innovation at Deciem and has been with the company since 2014, has been appointed chief science officer. His technical lab team is now made up of 43 people, according to the company.
“He’s always led our lab and our technical team,” Kilner said. “There are some people you meet in life and you’re like, ‘they are a genius’ — how someone can know so much on so many different levels always amazes me. Prudvi is really one of those when it comes to science.”
He has a big job on his hands — one of Kilner’s other goals is returning Deciem to its science and innovation-centric roots.
“We started looking at the innovation pipeline again, because Deciem was always around innovation, new brands, new products and making sure we’re always leading the way,” Kilner said. The company has more than 50 new products in development slated for 2019, and is working to launch Hippooh, a baby line with products that will each contain five or fewer ingredients.
Loopha, a body-care line with one stockkeeping unit, will also be built out with a full product line, as will HIF (Hair is Fabric). At The Ordinary, a plan to develop The Ordinary Pharmaceuticals, an over-the-counter line of skin-care products like benzoyl peroxide or hydrocortisone, is underway.
Kaplan has been tasked with supporting the growing company’s infrastructure as it tackles new projects and works to keep up with demand. “The company is still growing at such a rapid rate, and [we’ve been] selling more than one product every second for the last couple of months. It’s really important that we have someone that can make sure the infrastructure can grow as quickly and support the demand we’re feeling from customers and partners,” Kilner said.
Deciem is continuing its store rollout. The business now has just over 40 locations, and has stores opening on Madison Avenue in New York, on Milwaukee Avenue in Chicago, on William Street in Edinburgh and a larger space opening at London’s Spitalfields Market in the coming months. In 2019, Los Angeles, Copenhagen, Madrid, Dublin, Paris and Berlin are the key markets for potential store openings, the company said.
Expansion is also underway with Deciem’s retail partners. In addition to Sephora, where The Ordinary will launch online in the U.S. and Canada in January, the business is rolling out across Europe with Douglas, where it will enter Spain, Italy, Poland and the Netherlands in 2019. There is a shop-in-shop planned at Galeries Lafayette Haussmann in Paris later this year, as well as plans to roll into 37 Galeries Lafayette stores in France. Deciem also recently launched at Myer Melbourne, where seven out of the top 10 selling beauty products are from The Ordinary, the company said.
The Ordinary remains the company’s bestseller by a long shot, but all of Deciem’s brands are said to be growing. “A lot of customers find us through The Ordinary, then they fall in love with the proposition and the results they see, and then actually, they want to see what else we have, and will maybe try a product from Niod or one of the other brands,” Kilner said.
Despite Deciem’s 2018 drama, the business is posting its best financial results. “For a revenue perspective, the numbers are bigger than ever,” Kilner said. “We’ve had the best month of the business in November, and probably the second-best month in October.”
For the fiscal year ended July 31, Deciem posted $161 million in wholesale sales, according to industry sources. The next quarter alone — from August to Oct. 31 — Deciem had $59 million in wholesale sales. In November, the business had $27.3 million in sales, sources said, and it is on track to do $327 million wholesale for this fiscal year.
What that indicates, Kilner noted, is that the Deciem customer didn’t leave with Truaxe.
“They trust us in terms of what we deliver on, what we say and we have a price point that really works for them, so we’ve been lucky that our customers have actually been very loyal to us throughout the year,” she said. Deciem’s Instagram account, which lost 2,000 followers between April and October, is up by more than 30,000 followers, to 402,000, she noted.
“It means from a communication perspective, they’re aligned with the journey we’re on,” she said.
Deciem is the brainchild of Truaxe, a former computer scientist who started what he termed The Abnormal Beauty Company in 2013. Truaxe was removed from the business in October after telling the company to cease operations, vaguely citing financial crimes. A Canadian judge granted an injunction from Deciem minority owner the Estée Lauder Cos. that removed Truaxe as an employee and board member, and appointed Kilner ceo.
Truaxe is said to remain a 29 percent owner of Deciem, but is no longer involved with the day-to-day business. The board now consists of Andrew Ross, executive vice president of strategy and new business development at Lauder, (which also owns 29 percent of the business), and Pasquale Cusano, another 29 percent owner. Of the remaining 13 percent, Kilner owns about half and Deciem’s employees own the other half, sources said.
“Brandon will always be the founder of Deciem,” Kilner said. “It’s important that we always maintain those founding principles that he instilled in all of us.”