Beauty & Wellness Briefing: AS Beauty is the upstart conglomerate you need to know about

Four-year-old AS Beauty has steadily picked up brands, starting with makeup brands Julep and Laura Geller in 2019, followed by Mally Beauty in 2021, and CoverFX and Bliss in 2022. While new beauty brands launch nearly every day, the quick establishment of an independent portfolio company remains an impressive feat. Amid a larger consolidation in the industry that has seen the closure of brands like Lilah B, Bite Beauty, Vapour and a host of others in the last 12 months, the growing nature of AS Beauty is worthy of examination.

In fact, AS Beauty began out of distress, though not its own. Its first acquisitions, Julep and Laura Geller, came about when their previous parent company, Glansaol, filed for Chapter 11 bankruptcy in 2019. Glansaol’s assets sold for less than $18 million in a fire sale. In step, Julep laid off more than 100 people, closed its beauty salons and shut down its Seattle headquarters. AS Beauty stepped in to acquire Julep, Clark’s Botanicals and Laura Geller, before selling Clark’s Botanicals back to its owners in 2019. It bought Mally Beauty from Beauty Visions, an affiliate of investor TPR Holdings, while it scooped up CoverFX and Bliss from PE firm L Catterton. AS Beauty expected CoverFX alone to boost its overall revenue by 40% in 2023, according to Feb. 2022 press release. In January, Ralph Azrak, COO of AS Beauty, said it’s too soon to know what Bliss can contribute to the bottom line, but that AS Beauty earned more than $100 million in 2022 and is growing “significantly.”

AS Beauty was established by Alan and Joey Shamah, the original founders of E.l.f. Cosmetics, which was acquired by TPG Growth in 2014 and went public in 2016. They teamed up with father-son duo Victor and Ralph Azrak, who previously ran a pajama business. Sara Mitzner, vp of marketing for AS Beauty, said this lends a family-owned “mom-and-pop” feel to the company of approximately 75 employees. The self-funded enterprise recently hired people for an internal growth team and influencer team, bringing its creative and media buying in-house as of late 2022. It is no longer using a traditional agency partner.

Azrak said that AS Beauty is open to additional acquisitions, but what or when remains to be seen.

“[We have] an opportunistic mindset. Our first priority is to build an amazing team, which is the engine behind the business,” said Azrak. “In terms of brands, we’re looking for strong, well known, female-founded [companies], and good opportunities.”

All back-office departments, like finance, legal and human resources, work across all brands. The same goes for front-office departments, including marketing, e-commerce, Amazon, operations and product development, among others. Azrak said each acquisition is a “unique circumstance,” and AS Beauty evaluates how much of the original team may need to stay on. Founders like Laura Geller and Mally Roncal have remained with their brands, as have a significant number of Bliss team employees, he said. However, no one was retained from the previous Cover FX team.

When asked about the vision behind AS Beauty’s portfolio, Azrak did not mention empty platitudes like building “best in class” brands or becoming a “platform.” Instead, AS Beauty is operating from the idea of taking undervalued assets and applying its in-house expertise and industry know-how to amplify them. It’s reminiscent of how a private equity fund may view its own hands-on operation. Examples of changes and behind-the-scenes activities AS Beauty has made to its brands include closing Julep’s Maven subscription program and gaining a better understanding of the Laura Geller customer base, both in 2019. Meanwhile, Mally Beauty relaunched via a campaign and limited-edition makeup kit in Feb. 2022.

Another focus area for improvement and expansion is Amazon. Both Azrak and Mitzner said the brands’ Amazon business is a key strength of AS Beauty. Currently, Laura Geller and Mally Beauty have strong QVC sales channels, and Bliss has retail partners including Walmart and CVS. But all AS Beauty brands will develop Amazon into their list of primary channels. Azrak said Amazon plays well as a repurchasing channel for existing brand customers, as well as a place of discovery for new customers. He said all AS Beauty brands have focused on improving the quality of their product photography and analyzing which makeup product shades have the most sales on Amazon.

Every AS Beauty brand comes with its own clearly defined strengths and points of view. Julep is viewed as a brand that speaks to younger consumers through its on-the-go makeup products and clean ingredients. Laura Geller addresses makeup for women over 40-years-old. It has a hero franchise through its Spackle primers plus a 25-year history with QVC. Mally Beauty, founded in 2005 by makeup artist Mally Roncal, also has a strong QVC partnership and user-friendly products. CoverFX has a portfolio of complexion makeup suitable for sensitive skin. And Bliss represents the first skin-care brand with a large brick-and-mortar retail footprint in Target, CVS and Walmart.

“We’re not trying to be everything to everyone; none of our brands are. We therefore have the ability to be specific in who we’re talking to and how we speak to them,” said Mitzner. “The market is so big and vast that it’s never been a more important time to be authentic because [customers] will sniff you out if you aren’t.”

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