AS Beauty is growing by acquisition again, this time adding Cover FX to its portfolio. This marks the company’s fourth acquisition since 2019 and offers another opportunity for AS to harness its expertise to revive a heritage brand. Cover FX was founded by Lee Graff in 1999 and is known for its clean, high-performance complexion products.
Terms of the deal were not disclosed.
AS Beauty was founded by Alan and Joey Shamah, the creators of E.l.f. Cosmetics, along with apparel veterans Victory and Ralph Azrak. AS Beauty also owns the Julep, Laura Geller, and Mally Beauty brands.
The purchase of Cover FX will increase the parent company’s size by 20 percent and is expected to boost overall revenue by 40 percent by 2023, the company said in a release.
“The brand is one of the first to sit at the intersection of high-performance color, customization, and skin care. The history, quality, and global shade range that Cover FX has offered for over two decades caught our attention right away,” said Ralph Azrak, Chief Operating Officer and Principal of AS Beauty. “In the coming years, we will use our resources to fuel innovation and expand our audience.”
As with the other acquisitions, AS is nabbing a brand with a rich heritage, but in need of attention to restore luster. Industry experts believe Cover FX sales are in the $20 million to $25 million range. The brand has been backed by L Catterton since 2011.
Ralph described to Beauty News what makes Cover FX so appealing. “Their origin story—while a lot of brands are clean and include product formulas that are skin care-meets-makeup, Cover FX actually started in a hospital.” He related that the founder, Lee, was making makeup in a basement to treat clients with rosacea, acne, and skin sensitivities in a Canadian medical clinic. Formulas were tested on more than 1,500 rosacea patients.
“Knowing that if it covered without inflammation for those clients, it would for all people,” Ralph said.
Cover FX is sold at Ulta Beauty and online at specialty sites, Amazon, and its own website. AS is expected to put a big push behind the brand including distribution fortifying its presence Amazon. “We hope to expand the sales channels on which the brand is available and bring it back to its former glory and national availability,” he said.
The company’s other businesses, Julep, Laura Geller, and Mally Beauty, are digital-first brands that generate over one-third of sales on their direct-to-consumer sites, according to the company. AS Beauty brands also are strong performers on Amazon with storefronts that are helmed by an in-house team, the company said.
Ralph said the other acquired brands in the portfolio are thriving. “We pride ourselves on having aggressive goals and we’ve exceeded them even in the strange and unstable world we are currently living in. It is a testament to the team we’ve built and the unique niche each brand serves in a marketplace full of brands trying to be everything to everyone.”
This probably won’t be AS Beauty’s last purchase. “We have an ecosystem here at AS Beauty that is built for growth. We have created efficiencies and operations processes that will allow us to acquire more brands seamlessly and have those brands succeed,” he said.