Too Faced, Too Fast?

I’ve put off writing this post for a few days, and no – it’s not the all too familiar push of procrastination – but rather a mere allowance of the time I required absorb and process the news.  I know what you’re thinking: “it’s not that big a deal, it’s a makeup brand purchase”.  Yes, it’s a makeup brand purchase, yet for me it’s more: it’s a marriage of the two things I love most – beauty and business. I felt that, with time, I’d be able to provide {what I hope to be} poignant thoughts from what is a venerable marriage of passions for me.

For those that aren’t as involved in both worlds as I, perhaps you’re unaware that Estee Lauder, in an attempt to expand its breadth of brands to reach an oft missed market segment for the Lauder brand {the Millenials}, has acquired Too Faced.  Millenials hold significant market share across our modern economy when we think of our hypothetical “market of any and all products and services” into a sort of pie chart divided into age groups.  Read between the lines: if Lauder didn’t hit this market in some capacity, their bottom lines would continue to shrink and stock prince inevitably lower {albeit slowly}, eroding the estimated $10.8B in annual revenue the company has posted in its most recent results.  For a cool $1.45B, our beloved brand, Too Faced, is now owned by Estee Lauder.

 

BEVERLY HILLS, CA - SEPTEMBER 20:  Items from Estee Lauder's "Pleaure by Gwyneth Paltrow" are seen at Saks Fifth Avenue & Estee Lauder's "Pleasures" by Gwyneth Paltrow at Saks Fifth Avenue on September 20, 2006 in Beverly Hills, California.  (Photo by Stephen Shugerman/Getty Images)

{via http://www.fortune.com: could there be a less sexy or funky counter? I don’t think so}

When I considered what I knew about each of the brands, it was hard to see a successful marriage.  Let me explain: how could this brand whose bottles of foundation I can remember seeing on my dear grandmother’s vanity as I played with her makeup 20 years ago {and who still hold that spot well into her 80s) somehow join forces with a mainstream, funky, uber-successful brand with packaging that would make any grandmother feel it was “too much”?  The key to any successful M&A is brand unity, not to mention alignment of work culture among many other things.  Could Too Faced possibly be a viable target acquisition?  What would this do for the brand?  I don’t have the answers; I don’t think anyone does, but it begs the question as to whether or not this was a strategic move for both parties, or whether Too Faced has sold just too soon {see what I did there?}.

 

Too Faced has grown 70% in the last year.  That’s nearly unheard of, irrespective of your market, let me tell you.  With the scrumptious chocolate bronzers and various similarly fragranced {and aptly named} palettes, in tandem with the most successful Better Than Sex mascara, Too Faced is expected to post $270M in net sales by the end of this year.   A $1.45B valuation, then, seems a little light.   This whole notion of brand conglomerates – especially in the beauty industry – isn’t foreign at all.  Think about it: ColourPop and Kylie’s brand, LVMH ultimately controlling brands like Dior and the Sephora stores we all love, not to mention the fact that Lauder already owns Tom Ford, MAC and Bumble and Bumble.  Yet, I see the alliance and brand unity under the Lauder umbrella with the aforementioned list.  Too Faced seems like it would be the black sheep with its funky packaging, approach to marketing, play on names and, largely, chocolate scented products  in the Lauder world of safe, not often sleek, packaging {ok Tom Ford is sleek – but you get what you pay for}.

 

Beyond the physical in any relationship – that goes for business too – comes the inherent coupling of cultures in what must {and I repeat: MUST} work symbiotically to yield a successful allegiance, measured by bottom and top line growth, as well as earnings per share.  Not knowing anything about the internal corporate culture of either organization, I’m going to shy away from making any comments about what may or may not result internally from this transaction, but rather I’ll stick to what I know well: in business, the sad truth remains that often economy trumps morality.   That’s the truth, plain and simple.

 

too-faced-fall-2014-packaging

{photo cred:makeupandbeautyblog.com}

With this acquisition, a company whose umbrella brands test on animals and support the Chinese market {where animal testing is, in fact, required by law – abhorrent, if you ask me}, joined forces with Too Faced, a brand so boldly against animal testing and Chinese sales.  It’s always sad to see a brand just eaten up in an acquisition, especially one so beloved {and clearly profitable} as Too Faced.  This just stunned me.  It was very hard to set aside the emotion this brought on and face the fundamentals of the transaction, which make good business sense, I’ll admit.  My initial thoughts pegged this as the end of Too Faced, with two creative, innovative founders skipping all the way to the bank.

 

I was wrong, and I’m thrilled to say it.  Too Faced has now publicly affirmed the brand’s commitment to not testing on animals and will not be going into the Chinese market.  The owner has gone so far as to say that they will not be “folded” in to the Lauder culture – I’m assuming it’s rather stuffy and largely dissimilar to that of Too Faced.

 

In this case, I say way to go to the founders of Too Faced who can {hopefully} leverage the marketing expertise, brand recognition, and access to broader sale bases beyond a website, Sephora, and Ulta stores only, further expanding the brand beyond any expectation.  Do I think it was too soon?  Perhaps.  But could the founders of Too Faced really take the brand where Lauder will?  I don’t think so.  Estee Lauder’s group of companies isn’t known to cannibalize its brands – think about those that have grown under the umbrella of the Lauder group – and so Too Faced may, instead, flourish following completion of the transaction.

 

Perhaps in this marriage, opposites really do attract, and Too Faced has done the best thing yet for the brand.

 

If you’re so inclined, here’s a few links to articles about the acquisition:

Forbes  | Allure.com  |  peta.org  |  The Wall Street Journal

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One thought on “Too Faced, Too Fast?

  1. I hate to say it but too faced doesnt get to make those kind of decisions unfortunatrly now that estee lauder took over too faced, the animal trsting is up to estee lauder which is Why I have decided shying away from too faced as well this is a personal feeling however

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