LOS ANGELES — Confirming a Jan. 6 report in WWD, Weston Presidio has acquired a majority stake in Too Faced Cosmetics. Terms of the deal were not disclosed, but industry sources pegged the price for the private equity firm’s stake at roughly $170 million.
Founded in 1998 by Jerrod Blandino and Jeremy Johnson as a feminine, flirty and fun antidote to serious makeup artist brands, Too Faced was one of the oldest privately held cosmetics brands of its size that hadn’t been snapped up by a strategic or private equity buyer. Although Too Faced declined to break out its revenue figures, president Lynda Berkowitz revealed they have increased nearly 40 percent year-over-year, which would put the brand’s annual retail volume at close to $100 million, calculating from previously reported approximations of its performance.
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“We certainly think cosmetics — skin care and beauty, in general — is an incredibly attractive category for investment largely because of the industry’s characteristics: the frequency of purchase, the importance of brands and the growth aspect of retail,” said Jeffrey Mills, a partner at Weston Presidio who will sit on Too Faced’s board. Addressing Too Faced specifically, he added, “We really view Too Faced, even post our investment, as an independent brand run by the team that founded it, built it and will continue to run it. There aren’t many brands of that scale and of that caliber that we see in the most desirable channels, which are Sephora and Ulta.”
Until recently, Blandino remarked that Too Faced never seriously considered linking with a partner. However, he said the brand realized lately that an investor could “maximize our potential and take advantage of the many opportunities that continue to present themselves.
“We met with a very select number of hand-picked potential partners and quickly chose the group at Weston because they perfectly fit our family and philosophy,” said Blandino, noting the deal only took a few months to complete.
Weston Presidio, which has offices in Boston and San Francisco, typically targets lower middle-market companies in the consumer, industrial and business services sectors with investments of $10 to $50 million, and has managed five funds totaling more than $3.3 billion since it started in 1991. Its active portfolio includes jewelry retailer Robbins Bros. Jewelry Inc., stationery specialist Papyrus’s parent company Schurman Fine Papers, sandwich shop chain Jimmy John’s LLC and infant product manufacturer Evenflo Co. Inc. Weston has seldom dived into beauty, but did sell Sassaby Inc., known for its Jane makeup line, to Estée Lauder Cos. Inc. in 1997 for an estimated $50 million.
Blandino, Johnson and Berkowitz, who joined Too Faced in 2009 after holding executive posts at Perricone MD Cosmeceuticals and Bobbi Brown Cosmetics, are retaining their positions at the company, which will remain in Southern California. “What Weston Presidio offers us is strong strategic guidance, as they have an impressive track record with regards to partnering with high-growth consumer branded companies. It’s the perfect time for Too Faced,” said Berkowitz.
Too Faced is distributed through 1,200 retail doors in the U.S. and another 500 abroad, most notably Boots, Sephora, Ulta and Macy’s. In fact, Too Faced is so tight with Sephora that Johnson consulted with Sephora USA chief executive officer and president David Suliteanu when considering possible buyers. Suliteanu advised him “to go with his gut and choose a partner who was as committed to the brand’s future as Jeremy was,” recounted Blandino.
Too Faced has about 120 stockkeeping units, and the top five products are its Natural Eye Shadow Pallette, Naked Eye Shadow Pallette, Shadow Insurance Eye Shadow Primer, Primed & Poreless Skin Smoothing Primer, and Lash Injection. The eye category accounts for almost 45 percent of Too Faced’s business, followed by face, representing 30 percent of the business. The remainder of Too Faced’s sales is split about evenly between lips, tools and holiday sets.
Blandino and Berkowitz pointed to international markets as significant future growth drivers for Too Faced, which does 20 percent of its sales abroad now. This year, the brand is also focusing on key launches such as the $32 Tinted Beauty Balm containing SPF 20 with four shades in the spring designed to prime and smooth the skin, while providing antiaging and sun protection benefits, and Better Than False Lashes, a $35 nylon lash extension system meant to be a fake lash alternative, coming out in the summer.