HatchCollective has undergone many transformations since it was founded as HatchBeauty in 2009 by Tracy Holland and Ben Bennett as one of the industry’s first beauty incubators. And now, with its acquisition by the American Exchange Group, owners of Aerosoles, White Mountain Footwear, and iTOUCH Wearables, the company will be known as AX Beauty Brands.

The portfolio will continue to include NatureWell, Found Active, Orlando Pita Play hair care, TXTUR, and Paint & Petals — sold at doors including Dilliard’s, Macy’s, Amazon, Target, CVS, and Walmart. In 2020, the company purchased Duncan Cosmetics’ portfolio of mass brands Lique, Tattoo Junkie, Remi Rose, and BE Beauty Essentials. The latter are sold in the value channel.

HatchCollective also manufacturers owned brands marketed by retailers including Trader Joe’s and Sam’s Club.

The move is a step into the beauty and personal care space for American Exchange which has grown via the acquisition of Aerosoles and White Mountain. The company produces proprietary brands, custom private label brands, and exclusive licensed brands, including footwear, tech wearables, watches, jewelry, handbags, and fashion accessories.

“I have always believed in a head-to-toe approach when building our brand portfolio, seeking out opportunities that genuinely enrich and enhance the lives of our consumers. HatchCollective and their range of trusted and science-backed beauty and personal care products fits perfectly into that strategy,” said Alen Mamrout, Chief Executive Officer of American Exchange Group when announcing the deal. “By integrating HatchCollective’s exceptional offerings, we are poised to carve out an even more impactful presence in the beauty and personal care space, maximizing our market share and gaining the trust of a broader audience.”

American Exchange saw a surge in demand for beauty and wellness products. “Beauty and personal care are one of the fastest growing categories and with this acquisition, we are positioned to be the next dominant leader in the space. We are not only embracing a strategic opportunity for expanded growth but also aiming to introduce HatchCollective and their internationally recognized and amazing product lines to our well-established retailer portfolio,” stated Steve Velasquez, Chief Strategy Officer at American Exchange Group.

Moving into beauty is a smart move, agrees veteran beauty executive and strategic partner investor Stu Dolleck. “The acquisition makes sense for American Exchange because it enables them to create products for their licenses and current brands across all categories. They can use Hatch’s brand building capabilities to develop personal care and beauty is the most glamorous category that any of those brands could have,” he says.

Beauty is also the darling of the social media set. “It’s a lot easier to get social media shout-outs in beauty products,” Dolleck adds.

Hatch’s President and Chief Commercial Officer Kristin Bibb commented on the merger of the two companies. “This partnership will enhance our ability to innovate, expand into new markets, and deliver exceptional experiences to our valued customers,” she said in a statement.  “We look forward to a future filled with shared success and continued excellence in the beauty industry.”

Holland and Bennett founded HatchBeauty to co-create innovative brands. They have since started other ventures, Goodwill Brands and The Center, respectively.

“HatchBeauty Brands’ founding vision was to develop innovative brands alongside celebrity talent and big box retail,” Holland told CEW following the announcement of the sale. “We were the first company in the U.S. market to use the concept of ‘brand incubator’ and were built with an entrepreneurial spirit. It took our collective grit and vision to build HatchBeauty into what is now a publicly-traded company. It is a long path to ‘exit’ for a founder, but I am proud of the team and the business category we built.”

In May, HatchBeauty was renamed HatchCollective under the private equity firm Lion Capital, which first invested in Hatch through the sale of Bennett’s shares followed by full ownership.

Holland and Bennett are credited with being some of the most creative minds in beauty and their expertise fueled growth. A few of their biggest hits were Orlando Pita hair care in Costco and Naturewell’s link with singer Jewel in the wellness space.

“Some of the magic is lost without them and it is trickier to play in beauty than in the other categories [American Exchange] operates in. But their strategy of making products from head to toe could be a huge bargaining point,” said one source who asked not to be named.