Cult Beauty was founded 10 years ago out of a frustration with traditional brick-and-mortar stores. Fast-forward 10 years, and the online retailer has global reach and is projected to hit £100 million in revenue this year.
“We were just two very frustrated customers,” Alexia Inge told BOF. “I hated the department store experience because it was based on commission and retail associates often pushed one brand only. The only people selling beauty products online back then were salons getting rid of old stock, or cheap sites that were bubble-gum pink horrors. I looked and just thought, this is not how people consume beauty.”
THE FOUNDERS: Alexia Inge, who formerly worked in journalism and PR, and Jessica Deluca, who had worked for investment banks in New York and London, launched Cult Beauty 10 years ago. They started the business in a basement flat in Islington, North London, with £16,000.
THE CONCEPT: A bespoke online platform championing what the founders believed were the best indie and niche beauty brands from around the globe. The assortment is curated with value created through content and customer service rather then promotions and discounts.
THE CUSTOMER: The merchandising philosophy mimics the Cult consumer—performance trumps price. The Cult Beauty customer is described as a grown-up beauty enthusiast who isn’t looking for gimmicks—they are willing to pay for high-quality, effective products.
THE FUNDING: The retailer was founded with £16,000. To date, Cult has raised three rounds of funding—in July 2011, June 2012, and November 2014—raising a total of £1.75 million (about $2.42 million) from investors including early Net-a-Porter investor Carmen Busquets.
THE REVENUE: “The business is now cash-flow positive,” Cult Beauty chief executive Murray Salmon, who led the first round of funding when he joined the start-up in 2011 from Net-a-Porter, told BOF. According to Salmon, Cult Beauty generated revenue of £37.6 million (about $52 million) and an EBIT of £3.6 million for the fiscal year ended May 31, 2017.
THE FUTURE: Cult is focused on international expansion. In 2017, 40%of the company’s turnover was generated overseas despite the fact that it only offers one language, one currency, and one checkout. The focus will follow where Cult consumers are located. Both Salmon and Inge said they would be open to selling the business one day with the right partner.
Read the full piece in Business of Fashion.
Photo: via Cult Beauty