Looks like the world won’t have to go without $9 retinoids, after all.
Deciem — The Abnormal Beauty Company — is expected to resume regular operations following a dramatic week that started with its abrupt closure and ended with a Canadian judge kicking Brandon Truaxe out of the business he founded in 2013.
On Friday, a judge granted an injunction from the Estée Lauder Cos. Inc. that appointed Nicola Kilner, a Boots veteran and the Deciem co-chief executive officer, as the sole, interim ceo. Andrew Ross, executive vice president of strategy and new business development at Lauder, and Pasquale Cusano are now the company’s only board members. Truaxe, who held positions on the board and as ceo, was removed completely from Deciem.
The plan is to return to business as usual. Shuttered stores are expected to reopen, and the company’s web site, which had featured a blank red page for several days, flickered back to normal Friday afternoon.
Experts expect that the company should be able to get over the blip, as its value-priced products from The Ordinary and other brands hit on modern consumer desires. But it remains to be seen whether removing Truaxe, whose personal philosophy on radical transparency cascaded through Deciem, will ultimately affect sales.
“If you take yourself out of the industry drama, the consumers are young people that just want their product and they want it cheap,” said Cecilia Gates, founder and ceo of Gates Creative. “Those consumers aren’t going to care. As long as the product stays at the level it is, the efficacy, the price point, the innovation, you’re still going to get people that will buy into the brand.”
One possible shift, according to Coye Nokes, partner at OC&C Strategy Consultants, is for the brand to move from being founder-oriented to being philosophy-oriented.
“The more the brand grows, the less connected it will get to the founder…one of the [important] things is keeping the DNA of the brands, and maybe that moves to more of a philosophy and less of a single person,” Nokes said.
If the stores are reopened swiftly, it is unlikely to have a huge impact on the business, according to the consultant. “If you think of the frequency of a beauty purchase, the likelihood any single consumer would be in there to order during those four days is relatively low, it’s not like the grocery store,” Nokes said.
Deciem may have been first to market with its multibrand, radically transparent, value-priced proposition, but several years later, it is no longer the only game in town. Other newcomers, like Be for Beauty’s the Inkey List, are bringing reasonably priced, ingredient-focused formulations to the market.
“All beauty brands right now, because the space is getting so saturated, are always going to have to worry about the next thing that’s going to come in,” Gates said. “That innovation piece of the brand really needs to keep happening so they keep staying a few steps ahead so they don’t get overshadowed by another indie brand.”
So far, Deciem has been good at forming a dedicated base of enthusiasts. The business has a fan-created Facebook group with 57,000 members, as well as 373,000 followers on Instagram. Conversations on those platforms span everything from deep dives on the products to concerns about Trauxe.
Truaxe, a former computer scientist, has a quirky personality — not unusual for beauty brand founders. He speaks quickly, definitively and without a filter.
“People liked him because of his idiosyncrasies, he was this genius,” said one source.
At one meeting with WWD last fall at New York’s Plaza hotel, he shared his opinions on luxury.
“The thing about luxury, when I say it’s not about price points, what I mean is it doesn’t matter if it’s cheap, expensive, affordable, not affordable — luxury ultimately has to exclude one thing — and that is being taken for an idiot,” Truaxe said. “Like, love this atmosphere, hate this coffee. It is horrific, it is actually one of the worst coffees I’ve ever had in my life. But you’re not fooling me — I’m accepting that I’m basically paying rent for the environment.”
Back then, Truaxe and Kilner were busy planning Deciem’s launch online with sephora.com — its first big move into the U.S. market. “The U.S. is going to become our biggest market, there’s no question about it,” Truaxe said at the time. “Sorry — unless it’s a complete failure.”
But Deciem quickly pulled out of Sephora, citing payment issues, and indicated in Instagram comments that it was preparing a launch with Ulta Beauty. Sources said it was slated for 2019, but Ulta confirmed recently that it is not happening.
Truaxe’s erratic behavior, which spanned corporate announcements made via Instagram post and e-mails sent to large groups of Lauder executives, employees and press, started in early 2018, and came in waves. And while he was always thought of as quirky, sources said his behavior became more erratic after the 2017 holiday season.
On Monday, he posted a video calling for the closure of the business, saying, “This is the final post of Deciem, which will shut down all operations until further notice, which is about two months.…Please take me seriously.…Almost everyone at Deciem has been involved in a major criminal activity, which includes financial crimes.”
Then, the stores started closing, and the Deciem web site went blank.
On Wednesday, when Lauder filed the injunction seeking to have Truaxe removed, those court papers also shed light on other behind-the-scenes happenings at the company.
In the document, Lauder called Truaxe’s behavior “erratic, irrational, disturbing and highly offensive.” Truaxe has publicly posted internal e-mails, disclosed confidential information and unilaterally made the call to fire Kilner in February, which led to the resignation of former chief financial officer Stephen Kaplan. She rejoined the business in July.
On May 9, Truaxe was detained by authorities in the U.K. and taken to a psychiatric hospital in London for several days, the papers said. He later stayed for three days at another psychiatric facility in Canada, according to the documents.
Social media, which has given Truaxe a platform for his unfiltered messages, has played a key role in the Deciem drama.
“You have a site that goes red, or stores that shut down, and it’s manipulating the media in a way that we haven’t seen,” Gates said. “Everyone in the business world is measured in how they say and what they say to their consumers, so in a way, that’s been disruptive. But is it going to be detrimental to the company? We’ll have to wait and see.”
A spokeswoman for Lauder said, “Today’s court decision reinforces the Estée Lauder Companies’ strong commitment to Deciem and its employees. We are confident that Deciem will continue to provide its consumers with the incredible products that they know and love. As a minority investor, we strongly support Nicola Kilner, the Deciem leadership team and its employees as they continue to run their business.”
Truaxe has not responded to WWD’s requests for comment since Monday, when he asked for a screenshot of the Instagram post where he said he was closing the business. Kilner declined to comment.
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