Multi-Brand Beauty Company Rare Beauty Brands Launches With The Acquisition Of Plant Apothecary
Rare Beauty Brands, a new company from the leadership of Patchology built to foster emerging brands, has purchased Plant Apothecary.
The company focuses on brands with groundbreaking entrepreneurs spearheading product development, clear points of differentiation and masstige to prestige positioning that have demonstrated market traction, but aren’t equipped with the funding, skill set or personnel to take full advantage of rising consumer demand. Terms of its deal with Plant Apothecary weren’t released. Generally, Rare Beauty zeroes in on brands bootstrapped prior to its involvement that are generating $500,000 to $10 million in annual revenues.
“The indie beauty explosion has taken the industry by storm, and there are many indie beauty brands with a compelling founder that really knows his or her products and consumers, but, as their business grows, they need more resources, a bigger team and expertise to scale,” says Chris Hobson, president and CEO of Patchology and Rare Beauty. “At Patchology, we weren’t in business to just be a little indie brand. We built out a great team with great expertise, and indie brands that are growing could tap into our resources, expertise and structure. So, we have said, ‘Let’s take our company, start acquiring indie beauty brands and create a multi-brand platform.’”
Rare Beauty is the latest in a burgeoning number of companies assembling a constellation of budding beauty brands by acquisition and incubation. Hobson shares Rare Beauty anticipates establishing in-house brands as well as acquiring outside firms. Other companies executing similar strategies, albeit with divergent distribution targets, include New World Natural Brands, Luxury Brand Partners and Volta Digital Brands.
“There are many indie beauty brands with a compelling founder that really knows his or her products and consumers, but, as their business grows, they need more resources, a bigger team and expertise to scale.”
Rare Beauty considers brands active in the professional, direct-to-consumer and traditional retail segments as long as they exhibit potential to expand at traditional retailers. It prefers to pick up brands that are profitable and registering sales increases yearly, but Hobson says neither is a requirement if it is believed a brand will gain momentum once it’s plugged into the company’s infrastructure. He estimates Rare Beauty can triple Plant Apothecary’s revenues during its first year at Rare Beauty, and double revenues in subsequent years. Plant Apothecary’s sales total for last year wasn’t disclosed.
Started by Bjarke Ballisager and Holly McWhorter, a husband-and-wife duo with a background in journalism, architecture and music, Plant Apothecary’s accessible, aesthetically-driven approach to organic beauty has been welcomed by a wide variety of retailers, notably Aillea, Anthropologie, Macy’s, Selfridges, Goop, Content Beauty & Wellbeing and The Detox Market. The unisex body-care and skincare brand’s assortment spans around 22 products priced from $12 to $56, and body washes are bestsellers. With Rare Beauty’s acquisition of Plant Apothecary, Ballisager is shifting his attention to architecture. McWhorter will remain at the creative helm of the brand, but is able to carve out time for writing and design work.
“Founders of indie brands don’t often bring years of experience in finance, sales, operations and marketing to the table, and there’s no reason why you shouldn’t be able to apply that experience to more than one brand. So, the concept of Rare Beauty just made sense to me,” says Holly McWhorter. “For us, it was a no-brainer because that was what we were missing. We have never been finance, sales, operations or marketing people. At a certain point, we realized that the way for this brand to grow was to find people with that experience and enough money to give the brand what it really needs to put it out there. I think that a lot of brands could feel the same way.”
“One of the reasons we can be more successful than a typical seed investor in helping brands get from that crucial $1 million to $10 million in sales is that we have been there, done that and seen it.”
Hobson explains Rare Beauty specializes in small beauty brands that early-stage investors often find too risky. “One of the reasons we can be more successful than a typical seed investor in helping brands get from that crucial $1 million to $10 million in sales is that we have been there, done that and seen it,” he says. “I can de-risk an acquisition by going to buyers at top retailers and asking them, ‘If we buy this, would you be interested?’ If they say, ‘No, we have seen 10 brands like that,’ we can stay away, but, if they say, ‘There’s something interesting there,’ we will take a closer look.”
Patchology, which delivers cosmeceutical ingredients in patch formats, is available in 5,000-plus masstige and prestige doors globally, including at Bluemercury, Cos Bar, Douglas, Mecca, Space NK, Sephora Europe and Harvey Nichols. Hobson, who was a brand manager at Procter & Gamble, senior vice president of operations and CMO at eCredit, an online credit solutions provider acquired by Fidelity Ventures, and startup advisor prior to Patchology’s launch in 2014, reports the brand’s annual revenues have been doubling. In addition to its infrastructure, brands scooped up by Rare Beauty will leverage the know-how Rare Beauty has accumulated over the course of Patchology’s history to not repeat mistakes Patchology has overcome and propel sales.
Headquartered in Norwood, Mass., the staff supporting Rare Beauty consists of about 25 people. Among the key executives are global vice president of marketing Jill Sherman, former senior vice president at Digitas North America; global vice president of sales and training Kathy St. Clair, former vice president of global sales at Skyn Iceland; and vice president of finance Marc Shores, former senior director of finance and operations at Global Protection Corp., and CFO at Dancing Deer Baking Co. Unnamed angel investors are backing Rare Beauty.
“We have got the capital now and access to capital in the future to grow Rare Beauty Brands,” says Hobson. “I genuinely think it can be one of the next great beauty portfolio companies.”