Cosmetic Brands Case Studies Part 2

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Cosmetics Case Study - Urban Decay: The Business

With its “break-the-rules ethos”, Urban Decay has been bringing prestige makeup with an edge to the market since 1996. After a series of owners, Urban Decay is now a subsidiary of the cosmetics giant L’Oreal. The brand is recognized for its digital strategy, which leverages off its social media following which stands at 9.1 million on Instagram. Its co-founder Wende Zomnir still leads the company as chief creative officer, and there is generally nothing but praise for the brand and its products, apart from some instances when “edgy” advertising campaigns overstepped the mark.


From the outset, Urban Decay has struck a balance between edgy and mainstream which has been central to the brand’s success. The California-based company was co-founded by self-confessed makeup addiction Wende Zomnir in 1996, who sought to bring a more interesting selection of quality color cosmetics than the ubiquitous and borderline boring pink, red and beige and “break down the doors of the mainstream beauty industry”. Zomnir claims the brand statement she launched the company with was, "Urban Decay is makeup for self-expression. It’s for girls and boys who want to rattle the notion of what beauty is".

As an upstart, indie brand Urban Decay turned traditional cosmetics on its head by adding an “audacious touch”. Their first cult hit was their eyeshadow Midnight Cowboy, launched in 1998, a basic beige eyeshadow “shot...through with pieces of glitter” to make it anything but basic. The product serves as a perfect example of how Urban Decay has been able to "bridge the gap between being a niche brand and being a brand with a broader appeal". Urban Decay products stand out with their quirky names to go with their unusual shades, with the initial offerings “named things like Roach, Smog, Bruise, and Frostbite”, and over 20 years later this quirky approach is still used as the company maintains a “name library” where potential product names are categorized into “sex names or drug names”.

The company was acquired by the luxury-goods conglomerate LVMH in 2000, for an undisclosed amount. LVMH then sold the company along with similarly edgy US cosmetics brand Hard Candy to the Falic Group two years later. Again, the details of the transaction were not disclosed however LVMH declared a combined EUR 55 million capital gain (equivalent to over $67 million at today's exchange rate) “from the disposal of Pommery, Hard Candy and Urban Decay ”. Urban Decay remained in the hands of the Falic Group until 2009 when the private-equity firm Castanea Partners acquired it, again for an undisclosed amount. Urban Decay is currently owned by the L’Oreal group. The sale by Castanea Partners took place in 2012, and although the amount was not disclosed, analysts were of the opinion that it was around the “$300 to $400 million” mark. Castanea Partners claimed that the company’s revenue had tripled during the time they held it, up to almost $140 million in 2011.

The brand’s range is available to purchase on their website and via retailers, both online and in-store, that fit Urban Decay’s high-end position. The brand is stocked by beauty specialist stores Sephora and Ulta Beauty, but maintains some exclusivity by not retailing via Amazon. As well as financial success and growth, Urban Decay, now the “second-largest makeup brand in the US” has been recognized by high-profile industry awards. In 2016, Urban Decay was named “Prestige Brand of the Year” by Women’s Wear Daily (WWD), which praised the brand for “ maintaining its edge in a rapidly changing world”. Then in 2017, WWD honored co-founder and chief creative director Zomnir personally, with the first-ever Impact Award.


When the company was started in 1996, Zomnir took care of marketing in a very grass-roots way. She claims she won their first wholesale account with Nordstrom by copying “a list of buyer contacts...a friend...left lying on her kitchen table”. In order to gain publicity for the brand, Zomnir would cold call magazine editors and attempt to pitch the range as well as giving freebies to “New York’s “It” girls”, to try to create some buzz.

Zomnir would pursue edgy female celebrities like “Shirley Manson and Gwen Stefani” at music festivals, attempting to given them Urban Decay makeup to try. This approach actually had some success, and Gwen Stefani, known for her striking red lipstick and quirky style, became an early fan and later collaborated on a collection with them. Other famous faces that fit the quirky-cool image of Urban Decay have been used in advertising campaigns over the years. In 2016, the short-haired, tattooed actress Ruby Rose, best known for her role on Orange is the New Black, was the face of Urban Decay when she launched their Vice lipstick. The current face is Nicole Richie who was brought on to launch their range of colored mascaras called Troublemaker. She claims to share “very similar views & ideas about embracing self-expression and individuality” with the brand.

As well as musicians and actresses, in recent years Urban Decay has used social-media star “beauty influencers” to engage with their customers. Christen Dominique, a YouTube star with 3 million subscribers, has partnered with the brand and Kristen Leanne, am influencer with “mermaid hair and copious tattoos” has become the first social media influencer to launch a collaboration with the brand.

The brand has placed importance on a strong social media strategy for the past decade, as an article published in 2009 details how the company would dedicate “one full time social networking strategies” and respond to any mention of Urban Decay on Twitter. In 2015, the digital think tank L2 placed Urban Decay at the top of its rankings as “most digitally astute beauty brand” due to how they managed to link between content on their social media accounts, to “shoppable content on its site.” An example of this is their platform “UD On You” which allows customers to share their selfies showing off looks using Urban Decay products, promotes sales as all of the photos in the stream can be browsed for products, which leads to a checkout page" In 2017, Urban Decay was no longer number one, but still made it into the top 3 brands. This was based on their ability to leverage the launch of their cult favorite, Naked Heat palette, to create a social media buzz among beauty influencers, makeup enthusiasts, and online editorial media, along with their website optimized for mobile commerce “with single-page checkout, swipeable content, and ubiquitous Add to Cart buttons.”

In January 2016, Urban Decay’s Instagram account had 4.1 million followers [10]. In the past two years this has more than doubled and as of March 2018, Urban Decay has 9.5m on Instagram, 1.21m on Twitter, 4m on Facebook and over 121k on YouTube.


Urban Decay is riding the wave of growth of the beauty industry in general, which experts consider is being driven by the use of social media and selfies. According to the VP of brand marketing at Urban Decay stockist Ulta, “Social media is shaping consumer behavior...[c]onsumers go to Instagram for beauty inspiration". The company launched at just the right time, not long before the specialist beauty retailer Sephora went global, which was instrumental in the launch of many indie beauty brands, and later capitalizing on Ulta’s move into premium beauty products.

In 2015, Urban Decay created a global website which they started actively starting driving more traffic to, as they found that much of the customer engagement with the brand was happening on Facebook and Instagram, and by bringing it “back to [their] site [they could] consolidate and curate some of the excitement”. This included content to keep makeup enthusiasts up-to-date with new product releases and trends.

The stand-out hero product range which has a loyal fan base are the “cult-favorite family of Naked palettes”. The first Naked eyeshadow palette was launched in 2010 and was an immediate success, along with its subsequent incarnations. The success of the Naked palettes was supposedly pivotal in L’Oreal choosing to acquire the brand, and it really seems like consumers can’t get enough of them: the discontinued Naked palettes resell on eBay for hundreds of dollars and during 2015, a Naked palette was reportedly sold “every six seconds”.


The co-founder still actively involved with the business is Wende Zomnir the other main co-founder Sandy Lerner, who previously co-founded Cisco Systems is something of a serial entrepreneur and has since moved onto agriculture. Zomnir continues to hold the position of chief creative officer. The Urban Decay site still lists Tim Warner as the CEO, however after 12 years with the company he recently moved onto a newer premium skin care brand with explosive growth, Drunk Elephant. The executive team listing on Urban Decay’s Bloomberg profile only shows Zomnir, which suggests they are yet to fill the vacant CEO position.


Reports on Urban Decay’s performance and products is overwhelmingly positive, however their edgy style has sometimes been too close to the edge and resulted in some controversy. In 2016, an advertisement used the of a forearm covered in makeup swatches that resembled the cuts one would make to slit ones wrists, a comparison which couldn’t be denied when combined with the tagline "Ready for some Razor Sharp Swatches, UDers?" Hundreds of consumers complained that the image was "in bad taste”. Similarly, consumers objected to the name of an eyeshadow called “Druggie”, which, given the opioid epidemic in the US, again seemed to be in questionable taste. Another advertising campaign drew negative press when a range in the artist Basquiat’s honor was released, but rather than take the opportunity to use a black model, the brand continued to use Ruby Rose which commentators found “tone-deaf”.


An award-winning, cult-favorite brand, Urban Decay manages to give prestige cosmetics an edgy appeal to those looking to express themselves through makeup. By managing their channels to maintain exclusivity and a consistently outstanding digital strategy, the company looks set to continue performing well for its current parent company L'Oreal.
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Cosmetics Case Study - Urban Decay: Financials

Urban Decay was founded in 1996 by Wende Zomnir, who initially worked from her Laguna Beach Bungalow in California. The brand launched a line of 10 lipsticks and 12 nail polishes inspired by "urban landscape", which included bold colors. Later, Urban Decay opened its first office in Orange County, California. Having moderate success early on, the brand was acquired by LVMH in 2000. It was then sold off to a duty-free company called Falic Group in 2002. After seven years (in 2009), the private equity firm Castanea Partners bought the brand, which was finally acquired by L'Oréal in 2012. As of 2017, Urban Decay's product line includes a vast series of eyeshadows, primers, and face makeup, along with lips makeup and other specialized products. This past year, the company had an estimated revenue of 363.9 million USD.


Unfortunately, L'Oréal does not disclose sales by brands, so an official number is not publicly available. Nonetheless, according to Owler, Urban Decay had a total revenue of 363.9 million USD in 2017. L'Oréal annual report from 2017 mentions the brand has continued to increase its sales and popularity in North America and Western Europe, making it an important part of their Cosmetics Division strategy.

Since the official breakdown of sales by geographic area is not publicly available in L'Oréal's annual report and financial disclosures, this figure can only be triangulated. Luckily, L'Oréal does disclose the geographic breakdown of its Cosmetic Division sales. Their financial statement from 2017 shows Western Europe and North America account for 31% and 28% of sales respectively. If we assume these same percentages apply to Urban Decay, then its sales in Western Europe reach $113 million USD (the result of 363.9 million x 0.31), while North America accounts for $102 million USD (the result of 363.9 million x 0.28) in sales. Asia Pacific is also a relevant player, representing almost 24% of sales, which translate to $86 million USD (the result of 363.9 million x 0.24) in sales. The calculations of these numbers were also included in the attached spreadsheet.


In different news releases and magazine articles, I was able to identify historical financial information which shows the brand has been consistently growing in sales. An academic profile of the brand mentions Urban Decay achieved less than 5 million USD in sales its first year. It was acquired in 2000 by LVMH for an undisclosed amount. However, by this time Urban Decay products were available in selected regions in America and internationally through Nordstrom, Bloomingdale's, and Sephora.

News articles from 2012 mention Castanea Partners were selling the brand to L'Oréal after it tripled sales from 2009 to 2012. Specifically, The Financial Times reported the company "had sales of $130m — more than three times its revenue in 2009, when Castanea Partners, the private equity group, acquired it." This means the brand had sales of approximately 43.3 million USD (the result of 130 million / 3) in 2009. The success of the brand in the early 2010s was also reported by INC magazine, which reported Urban Decay had a total revenue of $103 million in 2011. Finally, the last publicly available figure mentions Urban Decay a total revenue of $140 million USD in 2012. Therefore, the company's historical revenues are:

-1996: less than 5 million.
-2009: 43.3 million.
-2011: 103 million.
-2012: 140 million.
-2017: 363.9 million.


Urban Decay is part of L'Oréal's Luxe operational division within their Cosmetics Division (also composed of Professional Products, Consumer Products, and Active Cosmetics). The Luxe operational division has experienced one of the highest growth rates, reaching over 10% in 2017. The brands included in this division are categorized as follows:

-Aspirational and multi-expert (Lancome, Yves Saint Laurent, Giorgio Armani Beauty).
-Specialized in Single Product Category (Kiehl's and Urban Decay).
-Niche (newly acquired brands are Atelier Cologne, Proenza Schouler, and IT Cosmetics).

The L'Oréal Luxe division obtained over 10.4 billion USD in 2017. Therefore, Urban Decay only accounts for around 3.5% of sales, making it a relevant strategic brand, but overall a minor player in terms of overall financial value.

In the more than 20 years the brand has been active, its product line has expanded significantly. As previously mentioned, the brand originally launched a line of 10 lipsticks and 12 nail polishes. Although I was unable to find a detailed list of product launches, I was able to trace new releases through reviews and news articles. Currently, Urban Decay offers:

-Eyeshadow and primer. In this category, reviews mention two key popular products, the Naked Shadow Palette and the Alice in Wonderland limited edition palette (both launched in 2010). The success of the Alice in Wonderland limited edition resulted in the development of limited edition makeup kits associated with movie releases in what is now known as the Disney Collection.

-Face Makeup. This line includes a variety of products, including prep spray, liquid and powder foundations, blush, bronzer, setting spray, concealer, highlighter, setting spray, among others.

-Lip Makeup. Less comprehensive than other product lines, it includes lipstick, lip gloss, and lip liner pencils.

For a list of new products launched in 2016 and 2017 see the final section of Beauty Packaging article.


Unfortunately, the brand does not disclose sales numbers and, being part of a subsidiary of a large company, the information is not available in such detail. However, it is relevant to mention Urban Decay's products were only available through third-party stores since its inception in the mid-1990s and until 2014, when they opened their first flagship store in Newport Beach. Since then, the brand has rolled out stores in other locations, including Los Angeles, Vancouver, and London. Nonetheless, the largest share of their sales still comes from third-party sellers, which, as mentioned on their website, include Sephora, Ulta, Macy's, FSS, and other retailers. According to John Perasco, an Urban Decay executive, the breakdown of exact sales figures by store is not public, but he did share the majority of sales come from "outside retailers".


After searching extensively in news articles and industry reports, I was unable to find the exact date and country of the brand's international launch. However, according to the press release published by LVMH when it acquired Urban Decay, by 2000 the brand was already available in international markets through Sephora stores. The countries mentioned include UK, Hong Kong, France, and Japan. Therefore, it is safe to assume the brand was available in foreign markets soon after it was made available through Sephora, which first opened in America in 1998.


Urban Decay is a successful cosmetics brand that has consistently increased its popularity since its launch in 1996. It has been owned by large cosmetics and beauty conglomerates like LVMH and, currently, L'Oréal. In 2017, the brand had an estimated revenue of 363.9 million USD, more than twice its revenue in 2012 (approximately 140 million). Although the brand has recently opened flagship stores, its sales still come mainly from third-party sellers. Unfortunately, the exact percentages per retailer are not publicly available.

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Cosmetics Case Study - Urban Decay: Products, Distribution, Customers

Urban Decay is a global company owned by L'Oreal with award-winning products and loyal customers. They offer 22 product categories that are sold online, at their eight retail locations, Sephora, Ulta, and various department stores worldwide. They are best known for their Naked Eyeshadow Palette and Eyeshadow Primer Potion. Urban Decay targets women 15-40 years old and invites them to discover "beauty with an edge."

Urban Decay currently has eight brick and mortar retail locations. There is one retail store in the US, located in Newport Beach, CA. This store opened in 2014. There are two stores in Canada: SquareOne in Mississauga, ON and Metrotown in Burnaby, BC. One store is in Kuala Lumpur, Malaysia. Singapore has two Urban Decay retail stores. Finally, Spain has two locations as well: one in Valencia and one in Madrid.

In terms of specialty stores, Urban Decay is sold in both Ulta and Sephora locations. Sephora also carries the line in its international locations. The most recent data on the number of Sephora locations comes from 2013, when there were 706 stores in the US. As of 2017 Ulta had 1,806 retail stores in the United States.

Urban Decay also has several wholesale accounts. Domestically Urban Decay is sold in Macy's locations. Internationally, Urban Decay is sold through the following wholesale accounts: Mecca (Australia), Marionnaud (Austria), ICI Paris XL (Belgium & Netherlands), Shoppers Drug Mart (Canada), Magasin Kgs (Denmark), Karstadt (Germany), Douglas (Germany), Alsterhaus (Germany), Oberpollinger (Germany), Facesss (Hong Kong), Lane Crawford (Hong Kong), Debenhams (Ireland & United Kingdom), Kicks (Norway & Sweden), tSum (Russia), Hyundai Sinchon (South Korea), Galleria Department Store (South Korea), Manor (Switzerland), and House of Fraser (United Kingdom).

The following product categories are available from Urban Decay. Product launch information has been included when available.
-Lipstick (original product from 1996, but the new line launched in 2016)
-Nail polish (original product from 1996)
-Eyeshadow (launched in 1997, original shades still sold)
-Eyeshadow primer (launched in late 1990s/early 2000s)
-Eyeshadow palette (launched 2010)
-False lashes
-Brushes & tools
-Eyeliner (launched in 2006)
-Prep spray
-Blush & bronzer
-Setting Spray
-Lipgloss (launched in late 1990s/early 2000s)
-Liquid lipstick
-Lip pencil
-Makeup remover

Naked Eyeshadow Palette: Launched in 2010, the Naked palette consists of 12 neutral eyeshadow shades. It has inspired six additional versions: Naked2, Naked3, Naked Smokey, Naked Basics, Naked2 Basics, and Naked Heat. A Naked palette is sold every seven seconds throughout the world. It has also inspired a line of other Naked products from Urban Decay, as well as at least 11 fake versions from other retailers.

Eyeshadow Primer Potion: An eyeshadow primer in a squeezable tube. The cream is beige-colored, though it dries transparent. The feel is described as being similar to cashmere. This helps eyeshadow stick to lids and enhances the shadow color's pigmentation. It is the number one primer in the beauty market.

All Nighter Long-Lasting Makeup Setting Spray: A spray applied after makeup to keep it fresh for up to 16 hours. The secret behind it is a formula that lowers the temperature of makeup to keep it in place. It is highly reviewed and loved by customers.

Other favorites include: 24/7 Glide-On Eye Pencil, Naked Skin Weightless Complete Coverage Concealer, and Duochrome Eyeshadows.

Urban Decay was named the best prestige beauty brand by Women's Wear Daily (WWD) in 2016. The brand exudes coolness among women and leverages social media effectively. Being a prestige brand means the consumer expects to pay a higher price for the better quality of their product, which means their target customers have the extra funds available to make these kinds of purchases. Specific information for Urban Decay's target market is not recently available, but information from 2015 indicates they target women 15-40 who want vibrantly colored makeup products. Their slogan is "beauty with an edge," which appeals to a stronger, nonconformist group of customers. The company describes their mantra as "feminine, dangerous, and fun." The company also works hard to ensure their products are cruelty-free, including options that are certified vegan, which appeals to conscientious consumers. Their branding and marketing appears to be consistent across all countries.

Urban Decay is available worldwide through retail stores, specialty stores like Sephora and Ultra, and various department stores. They offer a wide variety of makeup but certain products, like the Naked Palette, are what make the company famous. Their products and marketing appeal to a wide range of women who seek high quality, highly pigmented, cruelty-free cosmetic products.
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Cosmetics Case Study - Bliss: The Business

Marcia Kilgore started Bliss in 1996 in a one-room spa in New York City. Her business, marketing models and strategies have always been fairly simple. Her biggest PR campaign was the New York Times article written about the spa, and her outreach to customers at home through the catalog became a large part of the business, even today. The company started off small and has grown to an estimated $21 million dollars in annual revenue. The company has changed many hands over the years and experienced a few expansion periods. The current goal is to get the consumer in line with the Brand of Bliss and to make products that everyone can afford.


Bliss has gone through many hands over the years. It started in 1996 as a tiny one-room day spa in New York City. In the beginning, business strategies were humble at best. The company primarily used word of mouth and did little marketing. Their first break was an article that was written in the New York Times. It talked about how the spa will ease stress and reduce the chance of heart disease and other illnesses. This was the first big word of mouth campaign the spa was able to grasp on to. Articles like these in the 1990s began the spending on self-care trend that we continue to observe. Bliss also gained great exposure through its celebrity customer base. This includes people like Oprah, Courtney Love, and Cindy Crawford. Even Julia Roberts claimed to have a hard time getting an appointment. Ultimately Bliss was in the right place at the right time during the start of a trend.

Once word caught on about spas and spa products, Kilgore got the idea to start a catalog. An example of what this cost Kilgore is, she used her sister to do much of the art, including the cover with an illustration of “Bliss Girl.” The catalog offered both Kilgores two lines and two product lines that she liked. The catalog is now released every other month to 1 million subscribers.
The main theme of the catalog and the spa was a chic, girly, decadence that every female could identify with. Kilgore used this to sell her spa treatments as well as armloads of expensive products to take home. This worked well along with her celebrity base of customers to bring people in.
In 1999 luxury conglomerate (LVMH) purchased most of the company for $30 million, knowing that Bliss had made $11 million in sales in 1998 and was projecting that would be doubled for 1999. LVMH had originally planned to expand the retail spaces. However, they shortly realized their efforts may be better focusing on the catalog. At this point, the catalog had 11 million subscribers and brought in about 30% of Bliss’s total revenue.
By 2003, Bliss annual revenue hit $40 million, and they were operating three spas. The spas were in Soho, New York, East 57th St, New York and Sloane Avenue, London. The following year, 2004, Starwoods bought Bliss from LVMH for $25 million. The business plan was a global rollout of Bliss spas in W Hotels.
From here, Starwoods operated Bliss as a subsidiary. Bliss was to have its own headquarters, management and advisory board. Starwoods allowed the current senior management to stay and took on Marcia Kilgore, the founder of Bliss, to be the Chief Creative Consultant. However, Kilgore has not been a part of Bliss since 2005.
Bliss spas were first placed at the W New York, W New York - Times Square, W Los Angeles - Westwood, W San Francisco, the W Chicago - Lakeshore and the W Chicago - City Center. In addition to the spa rollout, Starwoods put Bliss products in major high-end retail stores such a Saks Fifth Avenue, Neiman-Marcus, Sephora, Macy’s, Bloomingdale’s, Harrods and Harvey Nichols.
In 2009, Starwoods sold Bliss to Steiner Leisure Limited for $100 million. At this point, Bliss was a national spa and beauty product line. It was then that Bliss finally began to become creative with their marketing.
In a 2012 interview Mr. Indursky, president of Bliss, he talks of his three-pronged business approach for the company. The first being the spas, the second, the brand including e-commerce, catalogs and social media the third, the retail community. Mr. Indursky went on to explain how important retail location choices are, and that each location and distribution method tells its own story.
By 2013, Bliss products were in 30 countries and sold at over 3,000 retail locations. Then in 2015, L Catterton, a private equity firm that owns restraint chains, fitness chains, and beauty brands, acquired Bliss for an undisclosed amount.
L Catterton brought in Meri Baregamain as Bliss’s new CEO in July 2016. She dedicated time to consumer research and found that customers were unhappy about having a hard time attaining products and that they were too expensive. As the company continues to expand, Meri continues on her quest to bring prices down and make products more widely available.
By 2018, Bliss was able to cut prices by around 50% across the board. They recently (just a few days ago) had a product relaunch of all products. Of the whole line, 60% are totally new and 40% of the classic line products have been reformulateto keep prices down.


Prior to 2009, marketing was done through word-of-mouth, some public relations and exposure though the hotel industry and in retail stores.
However in 2009, Bliss teamed up with the word-of-mouth marketing network called SheSpeaks. SheSpeaks reaches over 125,000 women nationwide. Bliss used this platform for the release of new products including their “Best of Skintentions” daily moisturizer in 2009.
Bliss was also using a campaign called “You be the fudge” when a new spa would open. At the spa opening, patrons could vote on which bakery in town had the best brownies, and the spa would use the brownies from that bakery in their store. These types of campaigns are the best word-of-mouth and public campaigns out there. Bliss does not advertise a brand, but they get people talking about it in other ways.
Another campaign in 2009 titled, “Gorilla Marketing,” a pun on guerrilla marketing, was created to advertise hair removal services and products. Gorillas in bikinis handed out product samples and coupons to people in the street during the summer. The campaign received a lot of press from unsuspecting pedestrians on social media.
In 2013, Bliss looked to Innerspin and MC Squared to compete for a print ad assignment. Earlier, the company had done advertising for the Lean Machine, a contour machine. Despite these two forays outside of the norm, Bliss still runs all of their marketing in-house with social media campaigns and spa service tie-ins.
By 2015, Bliss is a well-known global spa that people loved for the brownies they serve and the funky and fun products they carry. They were becoming a global lifestyle brand and were ready to launch 300 new products on to the market in the fall of 2015. This product release was meant to encompass a worldwide lifestyle collection.
They continue their “Gorilla Marketing” tactics, and their new marketing initiative after Meri Bergamain came on board to make the product more affordable. The company has finally achieved that in 2018 and relaunched their whole line just this month.


The current creative director Alli Truch claims that the company’s greatest challenge is and has been bringing the brand back to its roots since the last acquisition. She says that it had changed hands so many times, that it was falling apart. Bliss had lost its identity from being alongside failied product launches and partnerships with fitness brands like Crunch and Flywheel. Her job now is to get people to see Bliss for the cheeky rich girl brand it had once been, rather than just another beauty product giant.


Bliss has been through many hands, many business strategies and marketing campaigns. One of these that did stick with the brand was to use primarily in-house, word of mouth, and PR marketing schemes. With all the company has been through, it is profitable and popular, as reported. The next moves are to continue to make products affordable for customers and give them a brand that they can fully understand.
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Cosmetics Case Study - Bliss: Financials

Bliss, an iconic beauty brand, has a turnover of US$118.904 million with 184 employees. Bliss has proved to be one of Steiner Leisure Spa's best investments, as the company's operations and product sales increased by 20.9% and 59.8% respectively in 2010 because of its acquisition of the brand the previous year.

The Company Profile

Bliss was founded in 1996 by entrepreneur Marcia Kilgore and became an iconic beauty brand boasting all of its products as "100% cruelty-free and blissfully-free from parabens, phthalates, SLS, SLES and other bad stuff you don’t want on your skin or body."
Bliss, now an iconic spa beauty brand, as of March 2018 has nearly 3000 locations across the U.S. Bliss Spa's are located in New York, Los Angeles, Atlanta, Chicago, Boston, Fort Lauderdale, Dallas, Washington, Miami Beach, Hoboken, and Scottsdale. The packaging has been "redesigned for the almost 40 formulations now at lower price points spanning from $10-$30."
In 2009, Steiner acquired Bliss World Holdings Inc. from Starwood Hotels & Resorts Worldwide Inc. for $100 million. In 2016, Meri Baregamian was named CEO of Bliss, a is now leading the spa and beauty products company. Also in that same year, Bliss have shifted its creative operations hub to L.A. and revealed a new $10 million Series B funding round in August 2016.

Bliss a Blessing

Bliss proved to be a blessing to Steiner Leisure company as can be seen on the Steiner's financial report. Below is the latest available financial report from 2010, as reports after that year were not publicly available.

Spa Operations Revenues: $77.1 million (This increase was primarily attributable to the acquisition of Bliss Inc. in December 2009)
Products Revenues: $49.8 million (This increase was primarily attributable to the acquisition of Bliss Inc. in December 2009). Sales of the company's products increased at a compound annual growth rate of 6.1% from 2010 through 2014 (Attributable in part to the acquisitions of Bliss Inc. and Ideal Image)
Cost of Products: $34.2 million. Cost of products, as a percentage of products revenue, decreased to 67.3% in 2010 from 72.6% in 2009. This percentage decrease was primarily related to the purchase of Bliss Inc. and the increased sales of higher margin products.
Operating Expenses: Operating expenses, as a percentage of revenue, increased to 14.4% in 2010 from 12.9% in 2009. These increases were primarily attributable to the purchase of Bliss Inc.
Provision for Income Taxes: Provision for income taxes "increased $2.3 million to expense of $7.3 million in 2010 from expense of $5.0 million in 2009." Provision for income taxes "increased to an overall effective rate of 14.1% in 2010 from 11.7% in 2009." The increase was due to the income earned in jurisdictions that tax the company's income, representing a higher percentage of the total income they earned in 2010 compared to 2009. A charge of $0.4 million relating to tax planning for a foreign subsidiary and an increase in deferred income tax expense was attributed to the acquisition of Bliss.
Services accounted for approximately 69%, 69% and 70% of the company's revenues and products accounted for approximately 31%, 31% and 30% of their revenues in 2014, 2013 and 2012, respectively.

The financial report above is more than 24 month-old because the last SEC filing publicly available was from 2014-15, while the last annual report for Bliss available was from 2011. This is because Bliss was acquired by Steiner Leisure in 2009-2010 and later Steiner Leisure was acquired by L Catterton in 2015. L Catterton is privately held due to which the financial information is not publicly available.


Steiner Leisure Limited, "a worldwide provider and innovator in the fields of beauty, wellness and education," was acquired by the leading consumer-focused private equity firm L Catterton in 2015 for approximately $925 million, including the assumption of debt. In January 2016, Catterton, "the leading consumer-focused private equity firm," LVMH, "the world leader in high-quality products," and Groupe Arnault, the family holding company of Bernard Arnault, partnered to create L Catterton. The partnership combined Catterton's existing North American and Latin American private equity operations with LVMH and Groupe Arnault's existing European and Asian private equity and real estate operations, "resulting in the largest, diversified consumer-dedicated private equity firm in the world."


Bliss was founded in 1996 by entrepreneur Marcia Kilgore. In 2009, it was acquired by Steiner Leisure company, increasing the company's revenue to $77.1 million in 2010. In 2015, Steiner Leisure was bought by L Catterton. Bliss, now an iconic beauty brand, has a turnover of US$118.904 million and 184 employees, according to the latest available financial report.

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Cosmetics Case Study - ELF: The Business

e.l.f cosmetics, a publicly traded company, has an annual revenue of $269.89 million and typically relies on social media to market its products. The company focuses on selling its products through its online channels, with more 50% of all sales coming from its website. A main business strategy for e.l.f. is its low price points, which range from between $1 and $14 per item. Please find a deep dive of our findings below.


Please note: the following equation is used numerous times throughout this write-up to calculate revenue growth, in percentage form, when looking at year over year data:

Example calculation:

2014 revenue: $144.94 million
2015 revenue: $191.41 million

Ending revenue ($191.41 million) minus beginning revenue ($144.94 million) divided by beginning revenue ($144.94 million) for a revenue growth of 24%.


e.l.f. was created in 2004 by father and son Alan and Joey Shamah, who wanted to create a high-quality makeup product that could reach the market quickly and be sold inexpensively. From its inception into present day, e.l.f. has focused on selling their products in large retailers (e.g. Target, Walmart, Ulta), while utilizing very little space within the store (an average of five feet of retail floor space, vs. 15 – 18 feet for traditional beauty brands). However, online sales are a large driver for e.l.f., and account for 50% of their total sales.

e.l.f. has kept their business strategy relatively consistent since its inception in 2004. While they've since opened standalone stores (see below), they still focus on large retailers and creating extremely affordable beauty products.

In 2013, they opened their first standalone store in New York City and today, they have more than 19 standalone stores in New York, New Jersey, and California. When the company began, every product was $1, which appealed to the masses, especially the younger generation. In 2008, e.l.f. introduced their Studio line, which included clean black and white packaging and items priced at $3 rather than $1. The Studio line included a contouring blush and bronzing powder that are now “cult favorites.” Today, products range from $1 — $14, and still appeal to the younger generation with their low prices, with millennials accounting for 70% of e.l.f.’s customer base. Further, they’ve expanded from solely makeup products and have released skincare products in 2015 that are sulfate, paraben, and phthalate free. Beauty tools are now among their list of products as well.


e.l.f. has consistently seen a strong social media presence, and has utilized it heavily throughout the past ten years. Then-CEO Ted Rubin stated in 2010 that he had a philosophy to not spend any money on “traditional media” (e.g. TV, print). Rubin stated that he preferred to use Twitter and Facebook, as well as bloggers, to “lay the groundwork” for social sharing, as there are more direct relationships to be made through social media and blogging, rather than a giant billboard on a highway.

e.l.f. relies heavily on their social media presence to drive brand awareness of their beauty products. In 2016, e.l.f. launched Beauty Scape, which saw a 25% increase in e.l.f. Instagram followers and reached a combined 53 million people across all e.l.f. platforms. Beauty Scape utilized the top 50 consumers of e.l.f. products (e.g. "micro-consumers"), brought them together, and encouraged other e.l.f. beauty followers to post their best make-up looks on Instagram. e.l.f. likes to utilize micro-influencers (those with less than a thousand followers), as they drive an average engagement rate of 8% with their followers. This allows e.l.f. to reach their audience on a more personal level, as opposed to utilizing influencers with over a million followers, who only average a 1.7% engagement rate. Further, e.l.f. launched a Beauty Squad loyalty program for their consumers in 2016 and received 80,000 signups in the first six weeks of its launch.

As of March 2018, e.l.f. has 3.3 million followers on Instagram, 2.1 million followers on Facebook (and 2.4 million peopled "liked" them on Facebook), and 15.2 thousand Twitter followers. e.l.f. reports they have over 700,000 visitors to their website each month, for a total of 8.4 million online visitors each year.

Emma Roberts has been known to use the brand, as makeup artist Kelli Bartlett used e.l.f. products during a photo shoot in 2014 that was posted to Instagram. Azra Red, a makeup artist who does work for Italian Vogue, has also vocalized her approval of e.l.f. products, particularly their highlighter products. In 2016, actress Nina Dobrev wore e.l.f. lipstick to the Vanity Fair Oscar Party.


e.l.f. strives to work quickly to bring products to new networks, and averages bringing a new product to market in as little as 27 weeks. Most beauty companies take two to three years to bring a new product into market. Goals for 2018 and beyond include expanding e.l.f. product distribution at current stores (both standalone and large retailers [e.g. Walmart, Target]), while also moving into new stores. e.l.f. continues to add new products to their offerings, and 40% of sales in 2015 were from new products alone.

As of 2016, e.l.f. is present in Target, Walmart, CVS, Ulta, and Walgreens, and only makes up less than 3% of the market share in “United States color cosmetics space”, meaning there is ample room to continue to grow in upcoming years.

All e.l.f. products are designed in the United States and manufactured overseas, with a new product team that will identify new beauty trends around the world (e.g. eyebrow kits). This team also works to develop concepts that can be easily produced and sold, while still utilizing high quality ingredients. e.l.f. will frequently find new beauty trends from Korea, including the new Hydrating Bubble Mask and Hydrating Water Sheet Mask.

As mentioned in the marketing strategy section, e.l.f. continues to drive their advertising campaigns primarily through social media and micro-influencers. Their affordable products have continued to drive sales success year over year. In 2014, e.l.f. reported $144.9 million in revenue, followed by $191.41 million in 2015, $229.57 million in 2016, and $269.89 million in 2017. Looking at the first full year of revenue (2005, $5 million) versus the most current full year of revenue (2017, $269.89 million), we see an increase of $264 million dollars, or 5298%, if we take $269.89 million minus $5 million divided by the original revenue, $5 million.

One of the most successful things e.l.f. has done in recent years was to take the company public. In September 2016, e.l.f. (NYSE: ELF) debuted on the stock market, and sold initial shares of $17, which raised over $141 million, and proceeded to open stocks at $24/share. e.l.f. used the majority of their $141 million earns to "pay down debt" which will be discussed later on in the company challenges section.

We can see this success demonstrated when we look at 2015 revenue $191.41 million, the year prior to going public, vs. 2016 at $269.89 million, which is a 41% YoY increase in revenue. Please note, this percentage was calculated by taking the ending amount of $269.89 million, minus the starting amount of $191.41 million, and dividing that result by the starting amount of $191.41 million, to give us a 41% increase in revenue.

Ownership and leadership structure

As stated previously, e.l.f. was funded by a father and son duo in 2004. Alan and Joey Shamah ran the business, with Joey Shamah acting as the CEO. In 2014, e.l.f. was acquired by TPG Growth II Management LLC, and subsequently, the current CEO Tarang P. Amin was named, replacing founder Joey Shamah, who stayed on with the company as an investor and director. The amount of the acquisition was not made public. As noted below in the overview of leaders, the majority of e.l.f.'s executive team was brought in after the acquisition took place.

As of 2018, e.l.f. is now a publicly traded company (NYSE: ELF) and has a leadership team of nine. Further, e.l.f. has a board of directors of seven members, one of which is also the CEO and Director, Tarang P. Amin. Below is a brief overview of the executive and senior leadership of e.l.f., as well as an overview on Lauren Cooks Levitan, the director on the board of directors, and Mara A. McCune, the Senior Vice President of Brand, and the highest female leadership of the company. I have included the names of the other leaders within e.l.f. for reference.

Tarang P. Amin — Chief Executive Officer and Director
Tarang became CEO and Director in January 2014, and has over 25 years of consumer products experience, as he previously worked as the CEO and Director of Schiff Nutrition. Shiff Nutrition includes brands such as Move Free and Airborne. Prior to Shiff Nutrition, Tarang was Vice President of The Clorox Company, which is responsible for Kinsford, Fresh Step, and Hidden Valley products.
John P. Bailey — President and Chief Financial Officer
John has been the President and CFO since August 2015, and previously was a partner with TPG, which is a "global investment firm".
Robert F. Baruch Jr. — Senior Vice President and Chief Commercial Officer
Robert has been with e.l.f. since February 2014, and prior to e.l.f., he worked at Schiff Nutrition along with the current CEO, Tarang. Before Schiff Nutrition, Robert was a Vice President with Coca-Cola.

Mara A. McCune — Vice President, Brand
Mara joined e.l.f. in April 2014 as the Director of Marketing, and became Vice President of Brand in April 2015. Prior to e.l.f., Mara worked with The Clorox Company for over 10 years.

Ellie B. Off — Vice President, Innovation
Ellie began with e.l.f. in May 2014 as the Director of Innovation, and became Vice President of Innovation in December 2015. Before e.l.f., Ellie worked as the Marketing Director of Emerald Nuts Brand with Diamond Foods.

Lauren Cooks Levitan — Director, Board of Directors
Laura has been on the board of directors since 2016, and is the Chief Financial Officer at Fanatics, Inc. Prior to working at Fanatics, Inc., Lauren worked at Moxie Capital LLC (and was also the founder), which is a "private equity firm."

Jonathan T. Fieldman — Senior Vice President, Operations
Scott K. Milsten — Senior Vice President, General Counsel, Corporate Secretary and Chief People Officer
Fanny Xu — Vice President, General Manager, China Operations

Kirk L. Perry — Director
Beth M. Pritchard — Director
Sabrina L. Simmons — Director
Maureen C. Watson — Director
Richard G. Wolford — Director


Not many challenges or negative press present themselves surrounding e.l.f. As noted previously, the company paid off a large portion of their debt at the end of 2016, and the debt they paid off remains unnamed to the public. As of 2017, their NYSE financial statements report a relatively small amount of debt ($8.65 million) in comparison to their 2017 revenue of $269.89 million.

e.l.f. has continued to see revenue rise since 2014 (as stated previously and below), and is expected to continue to grow through 2018 and upcoming years.

YoY change: +24% revenue growth

YoY change: +19% revenue growth

YoY change: +17% revenue growth


e.l.f. was founded by a father and son in 2004, with the goal to create affordable, high-quality makeup products. Since then, e.l.f. has seen exponential growth ($5 million in revenue in 2005 compared to $269.89 in 2017), and successfully became a public company in 2016, after their acquisition by TPG Growth II Management LLC.
The company continues to utilize social media as their main form of advertising, due to their strong connection with the millennial audience and their use of tech-savvy social media advertising and affordable products. While e.l.f. started with every product costing $1 each, their line now includes makeup, skincare products, and beauty tools, ranging from $1 to $14. e.l.f. plans to continue to grow their presence in large retailers, while opening more standalone locations throughout the United States.

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Cosmetics Case Study - Elf: Financials

According to Refinery29, e.l.f. Cosmetics is one of the most desirable and affordable beauty brands out there, potentially due to its popularity with millennial shoppers.

Below, we have compiled financial data requested on e.l.f. Cosmetics.


We began our research using information from e.l.f. Cosmetics and its investors. As a public company, e.l.f. Cosmetics releases much of the required financial data. We also looked at data from their SEC filing, which included an exhaustive annual report for the year ending in 2016. Finally, we explored information regarding e.l.f. Cosmetics's finances that became public during e.l.f. Cosmetic's IPO. Statements from the CEO of e.l.f. Cosmetics helped us fill in the gaps where public data was not available.

Total Annual Sales of e.l.f. Cosmetics

e.l.f. Cosmetic's net sales in 2016 were 210 million U.S. dollars with 19.33 million U.S. dollars in net sales internationally. This grew to 269.9 million U.S. dollars in 2017, an 18% growth rate. 88% of e.l.f. Cosmetic's sales came from either U.S. or international markets, while 12% of sales came from e-commerce sites and other direct-to-consumer channels.

Sales Over Time

e.l.f. Cosmetics has grown 18% from 2016 to 2017. In the 13 years since e.l.f. Cosmetic's inception, it's grown from a tiny e-commerce store to a major player 19 of its own brick-and-mortar stores plus selling its products from 19,000 U.S. stores.

e.l.f. Cosmetics is unusual for a beauty company since it barely advertises and does not have any celebrity endorsements.

e.l.f. Cosmetics originally launched with only 20 products available. Today, e.l.f. Cosmetics has over 900 products and launches nearly one new product per week.

e.l.f. Cosmetic's huge growth in the past 13 years is likely due to its excellent price, a strong millennial following, and products packed with pigment.

Additional Relevant Financial Information

e.l.f. Cosmetics started selling shares at just $17 per share in September 2016, but that rocketed to $30.92 in December 2016. Stock price has had a downward trend since then, and is at $19.21 as of March 15, 2017.

To quote e.l.f. Cosmetic's 2017 financial report,

"* Net sales increased 18% to $270 million;
* Gross margin expanded over 300 basis points to 61%;
* GAAP net income was $33 million, or $0.68 per diluted share, based on a weighted-average share count of 49.4 million shares;
* Adjusted EBITDA increased 15% to $62 million;
* Adjusted net income increased 74% to $32 million;
* Adjusted EPS increased 77% to $0.64, based on a weighted-average share count of 49.4 million shares." (e.l.f. Cosmetic's Fourth Quarter and 2017 full year annual report)

Breakdown of Sales

e.l.f. Cosmetics are sold at a variety of drugstores, including Walmart, Target, and most large chain grocery stores and drugstores. e.l.f. Cosmetics is one of the fastest-growing cosmetics brands at both Target and Walmart.

The majority of e.l.f. Cosmetics products (88%) are currently sold in physical stores, while 12% are sold online. There were no data available on sales per store or store type.

e.l.f. Cosmetic's net sales in 2016 were 210 million U.S. dollars with 19.33 million U.S. dollars in net sales internationally.

International Launch

Since e.l.f. Cosmetics started out as an e-commerce store, it's likely that e.l.f. Cosmetics technically has always been internationally available, as long as shipping worked out.

However, e.l.f. Cosmetics first launched in physical stores internationally in Canada. This was not specifically mentioned in any of our research, but the CEO of e.l.f. Cosmetics stated in 2016, "Two years ago, we weren’t even in Canada, so we’re still relatively new in a number of markets... It’s a strategy of focused expansion. We have such great balance across all of our channels and really making sure we’re prioritizing that growth."

We can safely assume that Canada is e.l.f. Cosmetic's first foray into international sales, based off of the CEO's statement. This suggests that e.l.f. Cosmetics first sold cosmetics in Canada in 2015 or 2016.

e.l.f. Cosmetics had its IPO in September 2016.


e.l.f. Cosmetics has shown strong net growth in the past two years, probably due to its popularity with millennial shoppers and its low price for high quality. The company first started selling its product online before growing to physical stores, and reached the Canadian market in 2015 or 2016. e.l.f. Cosmetics has seen a large decline in share prices since first trading publicly in late 2016 despite 18% growth in net sales from 2016 to 2017.
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Cosmetics Case Study - Bliss: Products, Distribution, Customers

Bliss's products can currently be found in Bliss spas, Ulta and Target shops. They are also available on Bliss's website, in Sephora, Nordstrom, Marks and Spencer and on Amazon. Bliss has a total of 14 brick and mortar stores. They offer products in two segments — face and body care. In the skincare segment, they offer cleansers & removers, masks & treatments, eye products, and moisturizers. In the body care segment they offer cleansers & scrubs, moisturizers, hair removal & firming products, and treatment products.


Bliss was founded in 1996, and had its headquarters in New York where the first spa was opened. Since the 90s and all the way until recently, the brand served a niche market and was sold mostly in salons and at high prices. It was one of the first modern wellness and spa skincare brands.

In February, Bliss announced its relaunch, which came with Instagram-worthy packaging, new formulations, and lower prices. Bliss's whole range is now priced at under $25.

All Bliss's products are 100% cruelty-free, and contain no parabens, phthalates, SLS or SLES.


Bliss products can be found in Bliss spas, Ulta and Target shops. Starting with March 18, Bliss will be available at nearly 3,000 locations across the U.S. It is also available on Bliss's website.

Bliss's brick and mortar stores are called salons or spas, and are currently available in 14 locations across the US:
1. 541 Lexington Ave., New York 10022
2. 12 W57th Street, New York 10022
3. 568 Broadway, New York 10012
4. 45 Ivan Allen Jr Blvd, Atlanta 30308
5. 188 14th Street NE, Atlanta 30361
6. 100 Stuart Street, Boston 02116
7. 644 North Lake Shore Drive, Chicago 60611
8. 2440 Victory Park Lane, Dallas 75219
9. 515 15th Street NW, Washington 20004
10. 401 N. Fort Lauderdale Beach Blvd, Fort Lauderdale 33304
11. 225 River St, Hoboken 07030
12. 6250 Hollywood Boulevard, Los Angeles 90028
13. 7277 E. Camelback Rd., Scottsdale 85251
14. 2201 Collins Avenue, Miami Beach 33139

While there was no pre-compiled data on Bliss's exact regions of distribution, we did find that Bliss products can also be found in Sephora, Nordstrom in the US.

In the UK, Bliss products are available in Marks and Spencer stores and on Amazon. Bliss also has a spa in the UK.


Bliss specializes in 2 product segments — face care and body care.
In the face care segment, they offer the following categories:
Cleansers & Removers
Masks & Treatments

In the body care segment, they offer the following categories:
Cleansers & Scrubs
Hair Removal & Firming

We were unable to find exact product launch dates as most of the products launched since 1996 until February 2018 were distributed directly to salons or via catalogues. As for the new, more affordable offering Bliss currently offers, the target launch date was the end of February 2018.


Hero products from the brand include Lemon and Sage Body Butter, Triple Oxygen Mask and Fab Foaming Cleanser. These products have been included in Bliss's merchandise since the beginning, and have also been included in the new collection.

Lemon and Sage Body Butter is a "luxuriously rich creamy body moisturizer" that "delivers long-lasting, skin rejuvenating moisturization". It is paraben-free and suitable for all skin types.

Tripe Oxygen Mask is a "self-activating energizing facial mask formulated with multi-action CPR technology, Vitamins C & E plus grape seed extract that gelps revitalize tired skin damaged from environmental aggressors, aging and stress."

Fab Foaming Cleanser is an "oil-free gel cleanser that provides gentle daily exfoliation, while removing makeup and grime for smoother, more radiant skin."


As Bliss started a salon-focused skincare brand, we first provide their target demographics that was used in the strategy so far. As mentioned above, the company had a complete relaunch in February, and we will therefore provide the target demographic which they developed since the relaunch as well.

Bliss launched its catalog at the end of 1990s, and it's target demographic was customers who couldn’t visit its New York spa. Since then up until the relaunch, the typical Bliss buyer was a woman between the ages of 30 and 55, "who is affluent and in search of boutique-quality beauty products".

With the relaunch, Bliss decided to turn to the mass market. Its target market is primarilymMillennial, or more specifically young women who buy products which are trend-driven and designed for Instagram. New prices are now 50% less than the original line, in order to please the mass market and customers at Ulta and Target: "Bliss's heritage is as a young brand targeted at young consumers."

We found no specific highlights regarding any regional or country differences. This is mostly because of their recent relaunch. Bliss has turned to new distributors and will likely look at how to expand into markets outside the US in different ways after March 18th, when it officially launches in Target and Ulta.


Bliss's hero products are Lemon and Sage Body Butter, Triple Oxygen Mask and Fab Foaming Cleanser, and they have been included in their offering since the start. Bliss's current target demographic is Millenial women who buy products which are trend-driven and can be photographed for Instagram. They offer products at affordable prices in order to satisfy the mass market.
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Cosmetics Case Study - Elf: Products, Distribution, Customers

e.l.f. cosmetics currently has 21 branded retail stores, and is sold through a wide range of stores including grocery stores, pharmacies, and beauty specialist stores which total around 19,000 US outlets. They offer over 300 accessibly priced products including eye products, lip products, face products, skin care products, brushes, and tools. It seems their loyal customers have many favorites from the e.l.f. line, but the Mist & Set spray and Mad for Matte eyeshadow palettes are both praised in online reviews and are bestselling products. With their accessibly-priced, innovative products, e.l.f.’s target market is millennial and multi-cultural, like much of their staff.


As of 31 December 2017, e.l.f. cosmetics had 21 e.l.f.-branded brick-and-mortar stores in operation: 17 “in the New York metro area” and 4 in Southern California. Their e-commerce store delivers to the US & Canada, as well as the UK, Mexico, Australia, France, Serbia, Scandinavia and Romania. e.l.f. is also stocked by “mass, drug store, food and specialty retail” stores across the US, however e.l.f. does not disclose the names of all its wholesale accounts and there is no precompiled list displaying these available online, except for Australia and Mexico. Their US store locator does not list stores by name, and only provides stockists within a 40-mile radius of a provided zip code, therefore it was not feasible to determine from the e.l.f. site. It was reported in 2016, just after the IPO, that e.l.f. is sold in 19,000 of these retail outlets in the US.

e.l.f.'s 2017 annual report only refers to their two largest wholesale accounts, Walmart and Target, which between them accounted for 54% of e.l.f.’s net sales. In addition to these two retailers which account for the majority of e.l.f.’s sales, e.l.f. is also stocked by the following major US chains: Ulta, Walgreens, CVS Pharmacy, Kmart, Old Navy, Bed Bath & Beyond, and Macy’s.

In Mexico, e.l.f. is available at Chendraui, HEB, Sanborns, Benavides, Walmart and Dax. In 2017, e.l.f. entered the UK market and is stocked at the chain pharmacy Superdrug which is their “first European distribution”, where previously they only had e-commerce business. In Australia, e.l.f. is available at Advantage Pharmacy, Crush, AdoreBeauty, Kmart, Chemist Discount Centre and


e.l.f. covers a wide range of cosmetic products, divided into eye products, lip products, face products, brushes, skin care, and tools & bags. Eye products include eyeshadow, eyeliner, eyebrow products, mascara, false eyelashes, eye concealer, eye primer and eyeshadow palettes. Lip products include lipstick, lip gloss, lip liner and lip balms & treatments. Face products include foundation, face primer, highlighters, contouring products, concealer, powder, color correcting products, blush, bronzer, setting spray & powder, palettes and the e.l.f. Active collection. Brushes include brush sets, face brushes, eye brushes, lip brushes, brush care products and the Beautifully Precise brush collection. Skin care products include moisturizer, cleanser, face masks, treatments, face mists, makeup remover, tools and the Beauty Shield collection. Tools and bags include sponges & applicators, tools, and makeup bags & cases.

When it launched in 2004, e.l.f.’s range consisted of 13 makeup products. This range has since grown to over “300 product SKUs” and in 2017 alone, e.l.f. added 130 new products to the range. There is no precompiled list with the launch information, so while it was not feasible to determine dates of each launch I was able to locate information for some recent, key launches. In February 2015, e.l.f. announced the launch of their skin care range. In April 2017, the Beauty Shield skin care line was launched and in November 2017, the sweat-resistant Active range was released.


There doesn't seem to be one stand-out product in the e.l.f. range, as so many of their products get rave reviews. In Buzzfeed’s list of “31 cheap products that makeup addicts swear by”, e.l.f. appears a total of 4 times for their liquid eyeliner, primer, Mist & Set spray and makeup remover pen. The setting mist also appears in Cosmoplitan’s list of “holy grail” products for oily skin. The liquid eyeliner appears on a list of best 5 e.l.f. products for 2018 from Cosmopolitan, which also features the Mad for Matte eyeshadow palette which features on a similar “best of” list from Allure. A top 15 from Popsugar magazine features the setting mist and the lip exfoliator: the latter was also included on Allure’s list. Based on discussions on the Reddit forum “Makeup Addiction”, their brushes and eyeshadow primer are also highly-valued products. The current bestsellers listed on e.l.f.’s own site are their baked highlighter, Flawless Finish foundation, face primer, Mad for Matte eyeshadow palette and the makeup Mist & Set spray. Based on popular opinion and sales, it appears that e.l.f.’s hero products are their setting mist and eyeshadow palettes.


An investor presentation from 2017 noted how the e.l.f. workforce was largely female, of millennial-age and diverse and how this also reflected their target market. By offering “affordable price points and on-trend, innovative” products, e.l.f. markets to a wide range of consumers but has demonstrated appear with milllennials most strongly, along with Hispanics, Asians and African Americans and “some of the heaviest [makeup] users” i.e. makeup enthusiasts. The CEO noted in an interview with Fortune that although they are focused on multi-cultural consumers and millennials, they “believe in serving all women”. Although I was unable to locate information about the income level of the e.l.f. target market, the low priced products they offer which they market as "affordable" mean that the range is accessible to all women, including those with less disposable income.


e.l.f. is a growing, international, multi-channel cosmetics company that appeals to millenial-aged women of diverse backgrounds. Their range of over 300 products include color cosmetics, skin care and tools as well as specialist ranges such as the Active range. They have many products that are raved about by consumers, however their hero products seem to be the Mist & Set spray and Mad for Matte eyeshadow palettes.

From Part 01
From Part 09