Celebrities and Beauty Line
When Selena Gomez introduced her makeup brand Rare Beauty earlier this year, she was unable to promote it in person because of Covid. Instead, Ms. Gomez took on a role often delegated to a makeup artist: For Sephora, the brand’s exclusive retailer, she filmed all the education and training videos herself, iPhone in selfie mode, duct-taped to her bathroom mirror at home in Los Angeles.
“She really wanted to show that anyone could use the makeup,” said Joyce Kim, the chief product officer at Rare Beauty. (A representative said Ms. Gomez was not available for an interview.)
Ms. Gomez is one of the latest in a wave of celebrities no longer content to be a spokeswoman (as Ms. Gomez was for Pantene). They want to be beauty moguls. So they are, if you believe the hype, brainstorming new types of products. (Ms. Gomez’s Blot & Glow is a two-in-one compact with blotting papers and a powder-filled puff.) They are, in the case of Lady Gaga with Haus Laboratories, up until all hours doing mood boards and insisting that lipstick prices be brought down from $15 to $11 (according to Nicole Quinn, a partner at Lightspeed Venture Partners and one of her investors).
Of course it’s hard to know exactly what and how much the celebrities do, only that seemingly everyone is doing it. Consider the Cosmopolitan headline: “10 Best Celebrity Beauty Brands of 2020 That Are Actually Good.” Besides Ms. Gomez, Issa Rae, the “Insecure” creator and star, announced that she is an owner of Sienna Naturals, a clean hair-care line for textured hair. Cardi B has a makeup line on tap. Lauren Conrad, who previously capitalized on her fame from the reality TV show “The Hills” to unveil clothing and bedding lines and even a New York Times best-selling novel, introduced Lauren Conrad Beauty, an eco-friendly vegan line of products.
And on Nov. 25, Pharrell Williams’s new Humanrace line will offer what the singer/producer/entrepreneur calls a “three-minute facial” — three skin-care products designed for all genders.
That’s just a fraction of the new wave. They join old guard (relatively speaking) of celebrity beauty moguls — and models of success — like Rihanna, whose Fenty Beauty generated an estimated $570 million in revenue in its first 15 months, not to mention releasing 40 (now 50) shades of foundation without even using the word “inclusive.”
Or Kylie Jenner, whose Kylie Cosmetics lip kits sparked a flurry of other brands attempting to sell “kits” and “bundles” so customers could recreate a look. Ms. Jenner sold Coty a 51 percent stake in her company for $600 million. (Never mind that shareholders are now suing Coty for allegedly overpaying.)
Money, of course.
“In some instances maybe a very steady amount of money that can go on for years, after your acting career is over or diminished,” said Bruno Maglione, the president for licensing at IMG, which has recently created beauty lines for Dolly Parton, Brigitte Bardot and Paris Hilton. Starting your own company — à la Ms. Gomez, or Lady Gaga’s Haus Laboratories, which was introduced in 2019 — is generally more lucrative than a licensing deal (which Rihanna’s technically is), both of which can generate more cash than being a spokeswoman.
There are also hybrid licensing deals, which offer some equity (Rihanna reportedly owns 15 percent of Fenty), along with the guaranteed royalty of the license.
Going the start-up route also has the potentially huge prize down the road of an I.P.O. or a deal like Ms. Jenner’s, but not everyone has the stomach for it because “you can lose a boatload of money,” Mr. Maglione said — and yes, he means the star’s own.
As for the licensing deals, he declined to discuss numbers. But documents filed in a copyright infringement lawsuit against Khroma Beauty offer a peek: Boldface Licensing + Branding paid Khloe, Kourtney and Kim Kardashian an advance of $1 million for licensing rights, with guaranteed minimum royalty payments of $4.6 million to $5.2 million, depending on the launch dates of various products. (Don’t remember Khroma? It was introduced in 2012, was promptly hit with multiple lawsuits for trademark infringement and lasted barely a year in stores.)
Katie Slater, a partner at William Morris Endeavor who handles celebrity endorsements (she did Olivia Wilde’s deal with True Botanicals), also cited the money clients can make, along with the creative control they can exert. Instead of just turning up for shoots and P.R. days, stars can have a say in what is being said. Besides, doesn’t every star these days want to be a multi-hyphenate?
Actors, Ms. Slater said, “are writing, directing, producing. They are building their own brands.”
Whether this rush to create a brand is leading to some debuts that don’t seem authentic, or with products that aren’t actually wanted or needed, customers will decide.
“You have to make something damn good and differentiated,” said Michael Yanover, the head of business development at Creative Artists Agency who helped start Haus Laboratories. “And is this the right product for this fan base?” (To measure a celebrity’s cultural influence and whether it can be converted to sales, CAA uses a proprietary and somewhat secretive analytics tool, CAA Intell.)
Last year, customers quickly called out the teenage actress Millie Bobby Brown for a video she posted of her skin-care routine — she was trying to promote her new line — in which she wasn’t using the products (or even water), and her makeup remained intact. And Alicia Keys, who famously swore off makeup in 2016, will face the market with Keys Soulcare, a line of products that won’t be widely revealed until Dec. 3. Last month, Ms. Keys, a former spokeswoman for Proactiv skin care, promoted her new wares to a virtual V.I.P. lounge full of influencers and answered pre-vetted questions from beauty editors and TikTokers.
“Alicia never swore off makeup,” said Kory Marchisotto, the chief marketing officer of e.l.f. Beauty, with which Ms. Keys has a licensing deal. “She had a moment of clarity where she wanted to break free from covering up. The makeup community turned that into their own narrative and made it a play against makeup.” Ms. Keys herself was not available to discuss until December, an e.l.f. representative said.
Celebrities have long done licensing deals for fragrances (Rihanna and Gaga both had them), and in fact, celebrity perfume is the only sector of beauty to have posted growth this dark year. It’s up 2 percent, when every other category is well into negative double digits, according to the NPD Group research firm.
But makeup and skin care are what’s hot for would-be moguls. They are bigger slices of the beauty industry — skin care alone accounts for anywhere from 45 to 60 percent of the profits, depending on which figures you use — and they are now easier to get into than ever. Thanks to e-commerce, they require less capital because there’s no need to hire a department store sales force to push products. And with social media, there’s a big savings on marketing, since a huge chunk of it is often the cost of the celebrity’s own time on Instagram.
Beauty, and makeup in particular, is also a lot more straightforward than, say, clothing or homewares. There are no sizing issues, and it generally isn’t out of season as quickly, if ever. (Red lipstick, anyone?) The overhead is lower. And customers are open to buying a lipstick or an eyeliner from a celebrity in a way they may not be with skin-care products.
“It’s ‘How can I trust that a celebrity knows the proper ingredients to go into skin care?’” said Larissa Jensen, a vice president at the NPD Group. “Makeup is much easier to create, to manufacture and to look at the celebrity in terms of makeup they typically wear, like is it a nude look or a bright look?” And beauty in general is a lot easier (read: cheaper) to buy as a fan than, say, Gwyneth Paltrow’s $1,999 pink velvet sofa, a collaboration with CB2.
Venture capitalists also like celebrity beauty. Like all beauty, it has high margins, high repeat purchases and high customer word of mouth. And it’s easier to acquire a customer through a celebrity than it is through Facebook, Ms. Quinn of Lightspeed said. She looks not just for huge followings but at what the commenters are saying.
“Are they saying, ‘Oh my God, you look so beautiful?” or are they saying: ‘Wow, it’s a really cool beach you’re on. Wish I were there,’” said Ms. Quinn, whose firm has invested in Jessica Alba’s Honest Company and Ms. Paltrow’s Goop. (“I was just talking to GP the other day,” she said.)
With so many brands, it’s impossible for everyone to be successful, but don’t expect the pipeline to dry up anytime soon. Mr. Maglione of IMG said that some stars do hesitate because of fear of failure and possible damage to their reputation, but the sheer number of brands means that some misses aren’t even noted (though there are a few subreddits devoted to Tyra Beauty, Tyra Banks’s multilevel marketing company).
As Gaga noted in a video she posted to social media: “The last thing the world needs is another beauty brand, but that’s too bad.”