L'Occitane Nixes Take-Private Deal 🚫

GM and Happy Thursday, folks. It’s been an insanely exciting few days in CPG so we have lots to cover. Here’s a preview:

• Geiger nixes L’Occitane deal 🚫

• LVMH bets on premium eyewear 😎

• Dave Grutman backs SkinnyDipped 🍫

• Rowdy Mermaid launches new line 🆕

• The Lip Bar heads to CVS 💄

The Big Story 📰

L’Occitane International, the global beauty firm that’s majority owned by Austrian billionaire Reinold Geiger, no longer plans to delist from the Hong Kong Stock Exchange and go private. Though there was ample excitement about Geiger taking L’Occitane International private at a valuation of $6.5B — shares popped 30% on the news — that will no longer be happening, and Reinold Geiger isn’t sharing why.

Geiger has quietly built L’Occitane International into a diversified, formidable beauty business since acquiring 33% of L’Occitane en Provence in 1994. In addition to their namesake brand, which posted net sales of €1.4B last fiscal year and boasts a network of 3,000 stores across 90 countries, they’ve made some wise acquisitions over the years.

In early 2019, L’Occitane International spent $900m to acquire British luxury skincare brand Elemis. Though growth has slowed ever so slightly, Elemis sales still grew 13.1% year-over-year to $255.9m.

More impressively, however, L’Occitane scooped up an 83% stake in fast-growing beauty brand Sol de Janeiro at a valuation of $450m. Though this might sound like a lot, L’Occitane has supercharged Sol de Janeiro’s growth. In Q4 of 2022, Sol de Janeiro generated net sales of $26.1m, while in Q4 of 2023, net sales surged 267% to just over €100m. In short, Sol de Janeiro is an absolute rocketship with a lot of runway left for growth.

Lastly, in March of 2022, L’Occitane paid just over €5m to acquire 49% of Australian skincare brand Grown Alchemist. While not much to write home about from a revenue perspective today — L’Occitane simply files their revenue under Other — Grown Alchemist could very well be their ace in the hole tomorrow.

Grown Alchemist reminds me of another Australian skincare brand, Aesop, which L’Oreal just bought for $2.5B. Their branding is gorgeous, their packaging is meticulously designed, their formulas are clean label, and their price point is high. In 4 or 5 years, L’Occitane purchasing half of Grown Alchemist for a paltry €5m might be the steal of the century, and could be a major coup for its shareholders.

Despite all of this — owning a legacy beauty brand with annual revenue of €1.4B and a number of fast-growing brands like Elemis, Sol de Janeiro, and Grown Alchemist — the public markets haven’t fallen in love with L’Occitane International, and they lag behind competitors from a P/E ratio perspective.

So, now that Geiger won’t be taking L’Occitane International private, his only real hope is a dual listing in Paris or New York. Perhaps then investors will appreciate what he’s building.

Deals 💰

Mergers & Acquisitions 

• Draper James, the fashion brand founded by Reese Witherspoon, sold a 70% stake to private equity firm Consortium Brand Partners. Witherspoon will remain a partner and board member. Axios

• Brand management firm WHP Global acquired a majority stake in G-Star RAW, the well-known denim brand that was founded in Amsterdam in 1989. Earlier this year WHP Global purchased Bonobos from Walmart for $50m. WWD

• Global snack manufacturer John B. Sanfilippo & Son spent $63m in cash to acquire manufacturing assets and customer relationships from TreeHouse Foods. The acquisition expands Sanfilippo’s snack bar manufacturing capacity. Business Wire

Fundraising

• Better-for-you snack brand SkinnyDipped secured $12m in Series A funding led by Dave Grutman. A number of other celebrity investors like Kevin Durant, Amy Schumer, Mark Wahlberg, and Post Malone also participated. SkinnyDipped was launched in 2016 by mother-daughter duo Breezy & Val Griffith and they have over 25,000 retail partners across the U.S. PR Newswire

• Butternut Box, the largest fresh pet food brand in Europe, raised £280m in funding from General Atlantic and L Catterton. The company is based in London but also operates in Belgium, Ireland, Poland, and the Netherlands. TechCrunch

• UK-based bladder care brand Jude landed $4.2m in seed funding co-led by Eka VC and Joyance Partners. Jude sells a variety of products including bladder health supplements as well as leak-proof underwear. The company will use a portion of their seed round to launch in the U.S. later this year. Tech Funding News

• Super-premium bottled water brand Icelandic Glacial secured fresh equity funding from Iceland Star Property Ltd. and BlackRock. Iceland Star Property is a Liechtenstein-based holding company, while BlackRock is simply converting debt to equity. PR Newswire

• Elephant Partners, a Boston-based venture firm founded by Warby Parker’s Andrew Hunt, closed on nearly $800m for its fifth fund. Elephant has backed a number of consumer brands like Cometeer, Tecovas, and others. Boston Business Journal

• Eat Just, the Alameda-based creator of plant-based egg brand JUST Egg, secured an undisclosed amount of funding from VegInvest/Ahimsa Foundation. Eat Just was founded in 2011 yet they’re still incinerating cash like a nascent quantum computing startup… Bloomberg

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What’s New 🤩

Apparel, Cosmetics, and Wellness

• D’Amelio Footwear opened its first-ever pop-up store in Los Angeles. The store is located at The Grove and will be open for one month only. Instagram

• London-based luxury department store Liberty unveiled a new luxury beauty brand called LBTY. The high-end fragrance line will be available in October. It looks nothing like a private label brand we might encounter in the U.S. which is a win for Liberty. Business of Fashion

• Somewhat surprisingly, Under Armour has named John Varvatos as its new Chief Design Officer. Can the 68-year old Varvatos turn Under Armour into a desirable brand for younger people? Perhaps but I have some reservations. WWD

• Swiss luxury goods firm Richemont has created a new beauty division that will be led by DSM Firmenich alum Boet Brinkgreve. Richemont owns Chloe, Cartier, Van Cleef & Arpels, and a number of other luxury brands so we could be seeing quite a few new fragrances in the coming years. Fashion Network

Food, Beverage, and Alcohol

• Boulder-based kombucha brand Rowdy Mermaid introduced a new line of functional sodas called good mood soda. Each can contains 200mg of ashwagandha extract. Curious what y’all think of the packaging? Twitter

• Global brewer & distiller BrewDog will launch a new RTD cocktail brand called Wonderland Cocktails Co. later this month. Starting in October the canned cocktails will be available at Morrisons. The Grocer

• The new energy drink collaboration from GHOST and Sour Strips Candy officially launches on September 9th. They’re also collaborating on a line of supplements. The cans are very fun. Stack3d

• Snow Days, basically a much better-for-you version of Totino’s Pizza Rolls, partnered with the Teenage Mutant Ninja Turtles on a new line of organic pizza bites. Love the packaging. Food Business News

• DEFY Wine just launched a gorgeous canned Sicilian white wine. Only around for a limited time. Instagram

Distribution News 🚚

• Vegan beauty brand The Lip Bar (TLB) launched at over 3,000 CVS stores.

• Revolution Beauty launched their new skincare collection nationwide at Walgreens.

• Gut-friendly snack bar brand BelliWelli is now available storewide at The Fresh Market.

• BODYARMOR, the hydration brand that Coca-Cola acquired outright in 2021, launched in Canada.

• Black-owned haircare brand Uncle Funky’s Daughter launched at Sally Beauty.

• Plant-based cheese brand Nature’s Fynd went nationwide at Whole Foods Market.

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