Dollar-store staple brands of yore such as V05, Rave, White Rain and LA Looks may have a second lease on life thanks to a new owner.
Tengram Capital Partners announced yesterday that it is to acquire High Ridge Brands Co., owner of the above skin and hair brands as well as Zest, Coast and Zero Frizz and oral-care brand Dr. Fresh. The acquisition is subject to bankruptcy court approval. James Daniels, High Ridge’s former president and chief executive officer, is to return to that role once the deal is final.
Tengram invests primarily in higher-end beauty brands such as Nest Fragrances, Algenist, DevaCurl, Revive and Laura Geller, but is not one to shy away from a deal, either.
High Ridge Brands Co. in December filed for chapter 11 bankruptcy protection, putting its assets up for auction after failing to secure the sale of its brand pre-bankruptcy.
The business was formed as a private equity play, in order to acquire Zest from Procter & Gamble in 2011. Gradually, the business picked up other companies, including White Rain, LA Looks and Dr Fresh, its most recent acquisition in 2016. Because of the products’ low price points, the goal was to minimize back-end costs by optimizing supply and logistics and sell big volumes, the company said in court papers.
It was initially formed by private equity firm Brynwood Partners, which sold the company to Clayton, Dubilier and Rice at a value of $415 million in 2016.
High Ridge started to struggle as mass-market dynamics shifted, the company said in court papers.
High Ridge said its brands were hurt due to “shifting consumer preferences and a strong economy that led to a reduction in shelf space allotted to value priced products.”
The company’s brands are sold through food and drug and dollar-store channels, primarily. The business ended 2018 with $301.1 million in net sales and a $62.5 million loss.
Tengram’s acquisition comes at a time when drugstores are struggling to get consumers to shop the beauty and personal-care categories, but dollar stores, where High Ridge does the bulk of its business, are experiencing a growth spurt and investing heavily in beauty. Dollar General opened in 975 new doors in the U.S. in 2019, and launched its own private-label beauty brand.