Beach House Group has raised “a substantial amount of capital” in Series A funding from Monogram Capital Partners, cofounder Shaun Neff told WWD exclusively.
“It’s a big milestone for the business,” continued Neff, who launched the California-based brand incubator in 2016 with cofounder PJ Brice.
“I see us now with this partnership with Monogram having the resources necessary to optimize the brand portfolio and obviously do more in the future,” Brice said. “And when I say more in the future, that will be very much in the beauty space.”
Their portfolio comprises of six brands: Moon, the oral care company fronted by Kendall Jenner; Florence by Mills, 16-year-old “Stranger Things” actress Millie Bobby Brown’s Gen Z makeup line; Béis, a luggage and travel brand by “Pretty Little Liars” actress Shay Mitchell; Pattern, the hair-care line developed with “Black-ish” star Tracee Ellis Ross; Marlowe, a men’s grooming brand, and Cleen Beauty, a clean line available at Walmart.
“I don’t think when we started we would have thought we would have done five [of the] brands in [a span of] 18 months, which I never want to do again, because it was pretty wild,” Neff shared. “But knock on wood, every single one of our brands is far exceeding our wildest expectations.”
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The company has surpassed its $100 million sales goal total, WWD has learned. And since the pandemic, their direct-to-consumer business has grown more than 300 percent.
“I don’t think there’s one beauty retailer that exists that we haven’t met with that hasn’t wanted to build a brand with us,” added Neff. “And our influx from talent, insane. Every week or two, there’s new talent that’s reaching out that wants to start a brand.”
Brice attributes the success to a number of factors, including how selective they are with their partnerships. They only collaborate with influencers who are “really credible, highly engaged, highly motivated and incredibly aligned with [Beach House Group] every step of the way.”
Since the brands were launched before the impact of COVID-19 hit, the company has been well positioned during the pandemic. The event, though, has “tightened up infrastructure,” Neff said. “COVID-19 in a weird way was kind of a unique opportunity for us to hit the pause button. As you can imagine, starting five brands, it’s so fast. Everything is crazy. You’re hiring a new person almost every week. It was just so fast and a bit out of control, in a good way. But COVID-19 really allowed us to pump the brakes, be smart, analyze the business, look at how we’re structured, set up and operate.”
With the help of financial advisory firm Financo, the two founders met with upward of 200 potential investors. Monogram Capital Partners stood out because of its approach, with the investment led by cofounder and partner Oliver Nordlinger.
“When we first met him and talked to him four months ago, his excitement around the business, around the brands that we’ve built, just his energy and passion to really get behind us as founders, to give us the fuel we need to make our wildest dreams come true, it was really amazing,” Neff said of Nordlinger. “His rhetoric never changed.”
“We couldn’t be more excited to partner with PJ, Shaun and the rest of the Beach House organization,” Nordlinger said. “The six brands they’ve launched in less than two years — a heroic feat in itself — have all found success in market and are realizing tremendous growth, which simply highlights Beach House’s uncanny ability to identify white space opportunities for new brands and bring them to market on the back of their deep retailer relationships and digital marketing expertise. We’re eager to partner with Beach House to grow and monetize their existing slate of brands as well as launch new brands to market in the months ahead.”
Moving forward, there will likely be one or two launches a year, said Brice: “We’ll only do them if they’re totally and utterly game-changing concepts….The key now is using this capital wisely and really picking the right projects for the future.”
“Less is more,” Neff added. “And [the goals is] to find and pick out those diamonds in the rough opportunities that we feel we can scale quickly.”