THG CEO Matthew Moulding has said his company’s acquisition of skincare brand Biossance for up to $20m “should be immediately breakeven” for the company.
Biossance was formed in 2015 by bio-tech business Amyris, which invested between $300m and $400m growing the brand, with almost half of that spent on marketing, including the appointment of Reese Witherspoon as brand ambassador. Last year, annual revenues reached almost $100m, but with losses of around $90m. Amyris launched several other celebrity-led brands but was declared bankrupt in August.
Amyris has now auctioned off four consumer brands in its portfolio, and THG “paid less than nothing” for the “large, US, premium beauty brand” Biossance, Moulding said.
The five-hour bidding process saw THG secure Biossance’s IP, inventory and debtors with a book value of $29m.
The brand will be integrated into THG’s e-commerce and fulfilment arm Ingenuity “as soon as the deal is finalised” THG said, which is expected to be in the first quarter of next year.
Biossance products – which are stocked in more than 1,600 stores globally including Sephora, Harrods, and Selfridges as well as online – include cleansers, creams and serums, which will be manufactured in both the UK and US following the deal. The brand is also available on THG-owned websites Lookfantastic.com and Cult Beauty, where they have generated $2m of revenue over the last 12 months.
“Usually, there’d be a queue of buyers for a brand like Biossance… but buyer interest was minimal,” Moulding wrote in a LinkedIn post. “The only other serious bidder was a US PE firm. Why? In short, because nobody has a THG Ingenuity division. Biossance has a fantastic management team, but they need a new supply chain, tech platform, and cheaper routes to market. We bring these.”
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