When JD Beauty, owner of WetBrush, merged with Goody Products in March, it marked the brand’s third strategic move in less than two years. In August 2018, it acquired prestige curl brand Ouidad, which was reportedly bringing in $15 million to $20 million in sales, and in September 2017, it acquired Bio Ionic, a line of hair tools and brushes. The task at hand: To build out its larger portfolio.
Ouidad offered JD Beauty more of a foothold into hair care products versus solely tools. Likewise, Goody is expected to buoy JD Beauty’s consumer business. According to JD Beauty chief commercial officer Francesca Raminella, the company has experienced 40% year-over-year growth for the last five years. Sales is weighted 60% via the consumer channel, while the professional salon business accounts for 40%.
“The hair tools, products and accessories category has become less sleepy, and we’re seeing innovation and pockets of interest that didn’t exist before,” said Raminella, of the market which has also seen innovation from the likes of Dyson. “With the success of WetBrush, which is our largest brand and has grown over 40% in the last year, we saw a de-commoditization. Price was no longer the only thing that mattered.” Indeed, the hair category is the fastest growing within the prestige hair segment, according to the market research firm NPD Group. It saw a 25 percent year-over-year increase in sales in 2018.
Below, Raminella lays out the recent changes and future opportunities for JD Beauty.
Why was Goody a fit for JD Beauty?
Goody is an iconic brand and was the leader in the hair accessory category, but it had been left a little bit unloved by its previous owners [Newell Brands Inc. We think it’s still a strong brand, and the end customer still relies on it, especially its Ouchless Elastics. It has very strong retail partnerships and a large distribution, especially in Target and Walmart, where it is in all stores. WetBrush was able to bring fun and innovation to the brush category, and we think we can do the same with Goody. The two together can be a formidable duo. JD Beauty is a platform company, so we like the segmentation, like how Ouidad is a leader in curls and is found at Ulta, and Bio Ionic is a leader in tools and is at Sephora, Ulta and salons.
Many other portfolio companies leverage expertise in one category to another. How do you plan on doing that with your brands?
We’re definitely thinking about the cross-pollination and want to create specific products for specific hair types or products that you would use after using one of our tools. When we think about Goody, there are areas of product that it should be playing in. It’s a consumer brand — it is very, very strong in Walmart — but there are products that could be used by professionals, so we can build out that segmentation. We are having a professional trade show in June that shows elastics and pins that we think the professionals are going to react to and want to use and sell in their salons. What’s not going to work is to take a product we have in one brand and try to re-create it and sell it through another.
Is there anything on the back end you are doing to centralize your manufacturing, production or retail distribution?
It will take a while to get all of these businesses working together on a supply and systems standpoint, but what we are doing right away is combining marketing, new production development, education and sales. This is especially important for retail. We think the same sales partners need to be focused on the same retailer, so whoever is handling Walmart or Ulta is going to be handling all of the brands at Walmart and Ulta. You become more valuable to the customer if you can understand a retailer’s strategy.
Are you establishing direct-to-consumer strategies for these brands at all, versus relying so heavily on salons or wholesale partnerships?
When we look at our DTC businesses, our strongest is with Ouidad. It’s a big sales driver, but there is a lot of education you can find the website, like what your various curl types need and products that could solve an issue. In an omnichannel world, we do need to develop that for Goody, WetBrush and Bio Ionic. You can’t just focus on the sales piece of it with e-commerce sites, because no matter where customers are buying products, they are now, more than ever, learning about them online.