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Violet Grey, Amazon Said Considering Partnership

A deal could potentially land Amazon more prestige beauty brands, sources indicated.

Could Amazon be looking to pretty up its beauty business via a partnership with Violet Grey?

According to market sources, the luxury e-tailer may be teaming with Amazon to bring more luxury beauty brands and content to its marketplace — aside from selling beauty, Violet Grey specializes in content production. A spokeswoman for Amazon declined to comment on the speculation.

Cassandra Grey, founder and chief executive officer of Violet Grey, said: “I cannot confirm a special relationship with Amazon apart from the fact that I have enormous respect for the company and view the platform as one of the only five distribution partners that matter for digital content producers, particularly those of us who ride or die to serve the almighty modern consumer.”

Violet Grey sells an edited assortment of products from brands including 111 Skin, Byredo, Dr. Barbara Sturm, Le Mer, Le Labo, Tata Harper, Vintner’s Daughter and others, many of which do not sell directly on Amazon.

While the exact nature of the potential arrangement was unclear, many of the Violet Grey brands would represent big gets for Amazon, which already sells Bioderma, Butter London and Vichy. At present, the Internet giant’s luxury section includes a handful of high-end brands: 37 Actives, priced between $79 and $325; 3Lab, priced between $45 and $875, and Oribe, priced between $15 and $226. But there are many more indie and masstige offerings.

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One industry source said Violet Grey would likely provide content for Amazon’s luxury beauty section, in addition to bringing luxury brands to the site. Another said that if a deal comes to fruition, Violet Grey could act as a third-party platform on Amazon and a bridge into prestige beauty. 

Amazon has spent time trying to build up its beauty and fashion operations, and has added brands to its offerings in recent months. Amazon operated BeautyBar.com after its 2010 acquisition of Quidsi, but closed the site earlier this year and redirects shoppers to an Amazon Beauty Bar page. (The business has also built up other segments: appliances through a deal with Sears Holdings to sell Kenmore, and potentially grocery through the planned $13.4 billion acquisition of Whole Foods.) In May, the segment appointed Silvia He as head of vendor management for the beauty business.

Some beauty brands have expressed hesitation about selling on Amazon because the category shares a tab with health on the web site and it isn’t considered to be a luxury-looking experience. But many brands decide to partner with the web giant in order to eliminate third parties selling their products, often at a discount. 

In addition to allowing brands to clean up the gray market — which several firms have said is done swiftly upon partnering with Amazon — the marketplace can provide fertile territory for growing beauty companies. 

When Reflekt launched, for example, the skin-care newcomer did it through Amazon Luxury, even before launching its own e-commerce. For other brands, like Wunder2, Amazon eventually came to play a significant role in its business. Almost 25 percent of the brand’s sales come from the marketplace, according to Michael Malinsky, director at KF Beauty, Wunder2’s parent company.

For French pharmacy brand Vichy, launching on Amazon not only provided the opportunity to clean up the gray market, but also to tap into its target U.S. demographic — Millennial moms, according to Carole Diarra, brand vice president.

While the majority of beauty sales still come from brick-and-mortar outposts, the category has seen an uptick in online shopping. Ulta Beauty, for example, posted a 70.9 percent increase in year-over-year e-commerce sales for its first fiscal quarter, equal to more than $104 million. The Estée Lauder Cos. Inc. has also noted a strong double-digit uptick in e-commerce sales for its third fiscal quarter.

Industry sources painted Violet Grey as a business looking for money — noting the company is looking to raise additional funding. So far, Violet Grey has raised about $17.6 million in venture capital backing, with its most recent $13 million round raised in 2015.