Carlyle’s Investment in Beautycounter: A Surprising Misstep in the Beauty Industry

Carlyle’s Unexpected Misstep in the Beauty Industry

Carlyle, the renowned global private equity firm managing $425 billion in investor funds for various industries like aerospace and wind energy, faced a significant setback not from its usual high-scale ventures but from a seemingly smaller niche – skincare products.

The Investment in Beautycounter

In May 2021, Carlyle made a substantial investment of around $600 million in Beautycounter, a skincare company founded by Gregg Renfrew. The company’s unique selling point was its commitment to producing cosmetic products without harmful chemicals, distributed through independent sellers using a multilevel marketing approach.

Jay Sammons, heading Carlyle’s consumer products division, saw great potential in Beautycounter, having previously led successful investments like OGX hair care products. The goal was to elevate Beautycounter’s annual sales from $400 million to $1 billion and eventually take the company public.

The Partnership and Ambitious Plans

Upon acquiring a controlling stake, Carlyle provided Ms. Renfrew with a considerable sum, reportedly around $50 million, for part of her shares, while she continued as the CEO. Both parties shared grand visions for the company’s future growth and expansion.

Beautycounter, under Renfrew’s leadership, helped popularize the concept of “clean beauty,” offering products like the $87 antioxidant cream, aligning with the rising demand for chemical-free skincare solutions.

In a recorded meeting with Beautycounter sales staff and Carlyle’s Mr. Sammons, Renfrew expressed her excitement about the partnership, likening it to winning the lottery or getting engaged. The anticipation was high to work together towards achieving their ambitious goals.