Sephora is ending its partnership with Hydrafacial, which has been offering a faster, cheaper version of its signature treatment in the beauty specialty retailer’s over 500 North American stores, at the end of the year.
Marla Beck, president and CEO of Hydrafacial parent company BeautyHealth, confirmed that the partnership is winding down. Exclusive to Sephora, where services have been viewed as a tactic to draw consumers who can buy practically anything they desire online to physical stores, Hydrafacial’s 30-minute, $60 Perk by Hydrafacial service is 30 minutes shorter and at least $140 less expensive than the brand’s core service at spas. Still, it incorporates Hydrafacial’s patented facial technology to extract debris from the skin and infuse it with targeted serums.
“We sincerely appreciate Sephora for a successful 9-year partnership that helped introduce millions of consumers to the Hydrafacial brand through our Perk by Hydrafacial treatments in their retail stores,” says Beck. “During that time, Hydrafacial has become a treatment asked for by name, with the second highest brand recognition in aesthetics and an unmatched footprint of over 33,000 devices worldwide. We look forward to consumers enjoying the instant glowing results of Hydrafacial treatments at medical practices, spas, and retail and hospitality locations across the globe.”
Hydrafacial entered Sephora in 2015 with a complimentary service to customers spending over $75 and launched its paid service in 2020. By last year, the service was available beyond North America in Sephora’s Store of the Future in Singapore and Australian outposts. Along with Perk by Hydrafacial, Hydrafacial’s presence at Sephora featured the 15-minute Perk Lip treatment priced at $30 and a face and lip bundle priced at $80. Hydrafacial remains at retail with treatments performed at select Ulta Beauty and seven Nordstrom Spa locations.
Sephora’s investment in its Hydrafacial partnership didn’t yield the returns it wanted, and employees of the retailer are divided on where to place the blame. In Reddit’s SephoraWorkers subreddit, an employee with the handle nouveauchoux wrote, “Corporate claims they weren’t seeing the profits from it. They certainly didn’t put enough into the advertising for them.”
Another employee with the handle Potential-Light-7588 wrote, “I think they actually lost profits. Perk costs a lot of money, for the vials, The tubes, and cups. Then you have the machines that break…they have been trying to make Perk work in our stores for years, and it’s just doesn’t.”
Sephora isn’t doing away with services completely. A representative for the chain informed Beauty Independent that, other than Hydrafacial treatments, it will keep its current menu of services next year. The menu includes makeup, lash and waxing services priced between $15 and $90.
Losing its Sephora partnership is a blow to Hydrafacial at an already challenging time for BeautyHealth. The company’s second quarter revenues declined 23% to $90.6 million. In a statement to shareholders, Beck attributed the decline to challenging macroeconomic conditions outside of the United States.
Previously owned by private equity firms Linden Capital Partners and DW Healthcare Partners, Hydrafacial went public on the Nasdaq in 2021 through an arrangement with publicly traded special purpose acquisition company Vesper Healthcare Acquisition Corp. The SPAC deal valued the company subsequently renamed BeautyHealth at $1.1 billion. On top of Hydrafacial, BeautyHealth owns microneedling device specialist SkinStylus.
As of Friday last week, BeautyHealth’s shares were off nearly 60% from a year ago. In the third quarter 2023, they were pummeled as the company racked up expenses related to its Syndeo device powering Hydrafacial services. Suffering from critical design flaws causing them to break down frequently, defective Syndeo devices cost BeautyHealth $63.1 million in restructuring fees as it moved to a later generation version.
Former CEO Andrew Stanleick departed the company in November, and Beck, a BeautyHealth board member, stepped in as interim CEO. Her appointment became permanent in March. Beck co-founded beauty retailer Bluemercury in 1999 with her husband Barry and sold it to Macy’s for $210 million in 2015.
Compounding its headaches, BeautyHealth is contending with class action lawsuits. Last month, Sol Tan Tanning & Spa charged the company with failing to disclose malfunctions associated with Syndeo. The suit claims the upgraded version of the device, which the spa paid $30,000 for, is also defective. A different lawsuit seeks settlement for purchasers of BeautyHealth securities from May 10, 2022 and November 13, 2023. It alleges company executives failed to disclose or made materially false statements related to the fallout from Syndeo’s problems.
To right its ship, BeautyHealth is focused on proprietary skin solutions that can be used for Hydrafacial treatments. In an interview with the publication Women’s Wear Daily earlier this month, Beck singled out Hydralock HA Booster, a blend of hyaluronic acid, vitamin B5 and fruit extracts.
Hydrafacial plans to expand its range of treatment boosters in collaboration with brands such as the existing JLo Beauty Booster and Dr. Dennis Gross Phyto-Retinol Firming Booster. In addition, it’s weighing the possibility of a branded Hydrafacial product line. BeautyHealth aims to leverage partnerships with influencers and celebrities to amplify brand awareness.
Beck told WWD, “There is a ton of white space for this company, which is intriguing.”
