When Beekman 1802 announced its majority-stake acquisition by Eurazeo Brands in early December, it thrust the European investment group back into the beauty industry spotlight.
Eurazeo Brands is also the current owner of Nest Fragrances, and fashion brands Bandier and Herschel Supply Co. In 2017, Eurazeo, a Europe-based investment company, launched a consumer brand vehicle called Eurazeo Brands, designed to invest in U.S. and European brands with “global potential” according to a press release.
Eurazeo invested $62 million out of a total of $92 million to acquire a majority stake in Beekman 1802, alongside co-investors Cohesive Capital Partners and the Cherng Family Trust. As part of Eurazeo’s investment in Beekman 1802, Marc Rey, former CEO of Shiseido Americas, joins the company’s board of directors as chairman. Adrianne Shapira, managing director of Eurazeo Brands’ North America effort, also joins the board.
“We see a lot of brands that launch, but to get to meaningful scale is a whole different ballgame. The consumer has a lot of choices, so to connect and retain is challenging. We were super impressed with Beekman, where there’s a real following and community,” said Shapira.
Glossy spoke with Shapira about what drove the Beekman 1802 acquisition, what she looks for as an investor and what long-term effects she expects the pandemic to have on beauty. The conversation has been lightly edited and condensed for clarity.
What led to the Beekman 1802 acquisition?
“We’ve looked at a lot of skin-care brands and hair-care brands. We have a high bar, and for one reason or another, we didn’t pull the trigger on these other brands. During Covid, people either have a mask on their face or on their hair. Clearly, [beauty] was a category that was gaining momentum. Finding a brand, investment and team that you click with is paramount. Another big part of this is attracting the interest, the attention and the time of Marc Ray. For him to join as chairman of the board spoke volumes to us [about] the little brand that could.”
What qualities does Beekman 1802 have that make it a sound investment?
“We have many filters, because we’re looking at opportunities across categories. We start [by looking at] the market. [We ask ourselves,] ‘Is this a growing sector where the consumer is focusing their attention?’ Beauty is one where we saw a lot of attention that only grows. After that, we look at the brand. Is this a share gainer or giver? We saw a lot of runway for Beekman. It has efficacious products, with goat’s milk, and it has the science behind it [based on] the microbiome. But it was also [their branding] as it relates to the kindness and the ‘neighbors.’ As people are looking to associate themselves with brands that have a soulfulness, Beekman oozed content. They were spectacular, with the farm and the authenticity. In terms of the financials, [we] studied the [profit and loss] cash flow balance sheet, then the growth levers, and we saw a lot of runway across categories, [sales] channels and geography. Lastly, it was about the team — finding a team that [encompasses all of] that and is also open to learning and partnering with [our] team.”
What interests you right now as an investor?
“Covid has only accelerated [existing trends]. Self-care is here to stay. People want to care about themselves in a much more meaningful way. People are caring how they represent themselves. There is also more education around ingredients and what’s in products. It started with what’s in your body and what’s on your body, and now it’s what is around your body. Clean beauty is table stakes, and I think that trend will only continue. But it is also now about what the brand stands for. The products have to work, but also: What do these people stand for? You’ve got a proliferation of brands and no shortage of choice, so it’s not an ‘either-or’ situation, but it’s an ‘and.’ [People are saying,] ‘I want a product that works for me, but I also want products with a purpose.'”
Do you think Covid-19 has long-term implications for beauty?
“I think consumers want to connect and want content that resonates with them. We’re craving community. We were cautiously optimistic, coming out of our homes, and going back to work and school, and getting together. And now, here we are, again. You have to be very selective with your choices, in terms of where and how you connect with people. Those standards will only skyrocket through Covid-19.”