Brand Growth Management, a New York-based firm working with brands to position them for growth, financing and sale, has created a roundup assessing the merger and acquisition activity for the fourth quarter of 2014. The niche, fragrance and technology sectors were mainly affected, reported BGM, who predicted continued interest and activity amongst financial and strategic players in these areas with no signs of slowing into 2015. Below, highlights from BGM’s roundup by the company’s partners, Kelly Kovack and Scott Gurfein.
Into The Gloss
The New York-based beauty website that launched in 2010 by Emily Weiss secured $8.4 million during the quarter. The financing was secured primarily to assist with the development of the brand’s product line, Glossier. The range consists of daily use products built on reader feedback. According to Kelly, “Glossier is yet another beauty brand that is bypassing traditional distribution channels, and in the same vein of Julep and The Honest Company, it’s building a product business by going direct to consumer. With a blog that gets 8.5 million-page views a month and a group of investors whose backgrounds run the gambit of direct-to-consumer commerce businesses, entertainment and luxury, beauty brand Glossier certainly has a competitive edge. In my estimation, this brand is going to scale fast, and expansion into traditional distribution channels are probably in the works for 2015.”
Soap & Glory
Founded by serial entrepreneur Marcia Kilgore in 2006, the brand is known for accessibly priced bath, body and skincare products and quirky marketing. Upon announcing the acquisition, both companies gave this joint statement: “In 2011, Alliance Boots became a minority shareholder in Soap & Glory, and the proceeds from that transaction were used to further accelerate the growth of the brand. Alliance Boots has effected the full acquisition of the company through the exercise of a pre-existing call right; the consideration has not been disclosed.” According to Scott, “I have always felt strongly that retailers are the ideal acquirers of brands, so I applaud this one. Inasmuch that distribution is key, no other player has the unique insights into how a product performs against a customer base other than direct response marketers. Alliance Boots is one of the few major retailers out there capable of leveraging their unique assets and insights to identify and maximize branded product opportunities sold in its stores. I believe we will see a lot more of this kind of deal making in the future.”
Glamsquad is an on-demand beauty services firm launched in New York City in January with the mission of making getting ready a whole lot easier. The intention is to leverage the brand and consumer base to build a suite of complementary services, products and partnerships nationwide. To date, Glamsquad has completed over 10,000 services and events, and is now working to grow its core team and add more beauty services to its menu. The Series A round will enable the company to expand into more cities with the next being Miami during Art Basel in December. According to Kelly, “The ‘Uber for X’ categories seem to be hot among investors. Glamsquad competes with startups like Madison Reed, TheStylisted, Priv and more, and less directly with online beauty services such as StyleSeat or Beautified but the money and expertise of the investors certainly gives them a competitive edge. The platform is clearly being established to support additional verticals.”
For insights into other fourth quarter M&A, including deals by Estée Lauder, Catterton, TPG, L’Oréal, La Lumiere and Kendo, please click here.