To kick off the new year, Centric Brands announced the acquisition of Taste Beauty.
Taste Beauty, founded in 2015, is best known for its viral products, like its holiday-focused LOL Surprise toy in 2018, and its licensing deals with Disney and Nickelodeon. Taste Beauty maintains three different business divisions: its own Taste Beauty brand, Taste & Friends licensing, and Taste Labs incubation and private labeling. Taste Beauty products are sold at more than 50,000 outlets, including Walmart and Sephora. Centric Brands designs, develops and markets clothing for children, women and men and has more than 100 licenses, with fashion brands such as Calvin Klein and Kate Spade.
The three co-founders of Taste Beauty, Tom Crowley, Sabrina Vertucci and Alex Fogelson, will remain, and Fogelson, who is CEO of Taste Beauty, will also join Centric Brands as president of its beauty division. Fogelson declined to state Taste Beauty’s size or revenue, but in 2018 it had 10 employees. Industry analysts expected it to generate $50 million in revenue by 2021, according to previous Brilliant Reports. Terms of the Jan. 4 deal were not disclosed. Centric Brands emerged in October 2020 from bankruptcy which it filed in May 2020.
“The opportunity for us is that we can create significant value for our retail and brand partners by being a [creator and provider] for licensed and private label products,” Fogelson said. “We seek to be at the forefront of innovation and collaboration in the beauty and personal care category.”
Taste Beauty’s own brand focuses on Gen Z thanks to its frequent use of food-shaped lip glosses and other nail and lip products. Taste Beauty does not run its own e-commerce site and instead sells on Amazon (through Amazon) and relies on physical distribution through retail partners like Claire’s and Justice. Recently, Taste & Friends teamed up with Netflix for a “Stranger Things” makeup collection in 2019 as well as with Disney on Baby Yoda in 2020, both of which created viral pop culture moments. But the company’s licensing collaborations more frequently involve evergreen brands, such as with its Oreo cookie lip balm and Mountain Dew lip gloss. Taste Labs has already worked with notable retailers and brands like Sephora and Buzzfeed in 2017.
“[This acquisition] strengthens our bath and beauty product offering while expanding our entertainment licensing platform into complementary categories and properties,” said Jason Rabin, CEO of Centric Brands.
Centric Beauty had been hit hard by the Covid-19 pandemic when it filed for bankruptcy, noting that it laid off around 1,346 employees and laid off around 660 employees, according to its bankruptcy filing. At the time, it had $1.7 million in debt and was eventually taken over by its private equity lenders Blackstone, Ares Management and HPS Investment Partners.
Despite Centric Brands’ own struggles, licensing collaborations enjoyed a renaissance in 2020, driven by incubator companies and a change of tradition influencer and collaborations with celebrities. Recent successes include HipDot’s Incubator collaboration with rock band My Chemical Romance. HipDot, nearly 2 years old, has a smaller portfolio of collaborations and brands than Taste Beauty, with Spongebob and Kesha Rose (featuring singer Kesha) as stars.
The acquisition of Taste Beauty follows Centric Brands’ long-term ambition to expand its licensing business. In October 2018, under its former name Differential Brands Group, Centric Brands acquired a significant portion of the North American licensing business of Global Brands Group Holding Limited. She paid around $1.2 billion in cash and changed her name to Centric Brands. According to the bankruptcy filing, 51% of 2019 sales came from its children’s division, which included licensed beauty products and private labels. Taste Beauty’s focus on young people could help expand Centric Brands’ children’s business. Centric Brands already works with Walmart through children’s private labels George and Wonder Nation and has licenses with entertainment properties such as Disney, Marvel and Nickelodeon, all three in common with Taste Beauty.
Fogelson said that going forward, he’s optimistic about 3D printing — notably used for the LOL Surprise product — which has been central to the company’s rapid development of new product molds and product shapes. fun primary packaging. He added that trendy ingredient formulations will also be a focus in the future. Taste Beauty’s supply chain depends on third-party manufacturing and will grow under Centric Brands, he said.
“By leveraging technology more, we’re able to do more things around the clock, across all aspects of the business. By researching new technological solutions, we can boost the business and in addition [grow] our Amazon e-commerce,” Fogelson said.