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Alicia Keys Partners With E.l.f. for New Beauty Brand

"She's been wanting to do something in beauty and wellness for quite some time."

Alicia Keys has partnered with E.l.f. Beauty to launch a “lifestyle beauty” brand, the company said on Wednesday.

“She’s been wanting to do something in beauty and wellness for quite some time,” said E.l.f. chief executive officer Tarang Amin in an interview. He was mum on the details of the launch, declining to talk about the brand’s name, specific products or retail distribution plan, but he did say the brand will encompass multiple beauty categories and Keys has been involved in the creative process for about nine months.

A company statement describes the project as “a culmination of Keys’ personal skin-care journey” and notes the line will include “skin-loving, dermatologist-developed, cruelty-free products.” It will launch in 2021.

“What really appealed to us is she’s much more than a celebrity, she’s someone of real substance who goes between being a 15-time Grammy Award winner and artist [and] she’s got a New York Times bestseller in her book, “More Myself.” This was really a great marriage between what she stands for and wants to accomplish in beauty and wellness and what we stand for,” Amin said.

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Keys’ beauty line will have “a very strong digital presence,” Amin said, but will also partner with certain retailers.

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“It’s so much more than just the products. She has such important messaging on inclusivity, empowerment, wellness, self care, rituals — so really being able to bring all those elements out in rich storytelling is a key part of what this brand is going to be about,” Amin added.

The brand will be wholly owned by E.l.f., Amin said, and Keys will become a shareholder.

For E.l.f., the news of the Keys partnership came at the same time as the company released quarterly earnings. While many beauty brands have struggled and seen business downturns as a result of the coronavirus pandemic, E.l.f.’s numbers are up.

For the quarter ended June 30, E.l.f. posted an 8 percent year-over-year increase in net sales, to $64.5 million. Upticks in online sales led to a gross margin expansion of 500 basis points, Amin said. Net income was $1.5 million, or 3 cents per diluted share.

Amin attributed the growth to benefit from government stimulus programs and digital strength.

“We’ve definitely seen a shift online,” he said, noting that online sales made up 11 percent of the company’s total for fiscal 2020, but that already in the quarter ended June 30, online sales made up 17 percent of total sales.

Skin care, too, has seen growth, Amin added, though core makeup items including Poreless Putty Primer and Camo Concealer are still selling.

“They’re buying what we call our holy grail first-to-mass products,” Amin said. Skin-care sales made up 25 percent of all direct online sales for the quarter, Amin added, noting that as a portion of the overall business, skin care is about 9 percent.

Asked about E.l.f.’s interest in hair, a category that has done well during the pandemic, Amin noted that the E.l.f. lines are likely to stay focused on skin and makeup for now, but that Keys’ line will span categories.

The company declined to provide financial guidance, citing uncertainty related to COVID-19.

“It’s going to continue to be volatile,” Amin said. “We’ve seen a slowdown, even recently just with the surge in COVID-19 cases and as stimulus dollars dry up.”

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