Julep went from acquisition to bankruptcy in two years, providing a hard lesson for beauty entrepreneurs—acquisition doesn’t guarantee success. The brand was launched in 2007, with a compelling founder and heavy-hitting investors, as a physical retail concept that quickly grew into a multichannel online cosmetics brand that challenged the traditional CPG industry, launching 300 new crowdsourced products each year.
Julep founder Jane Park told the NYT in 2013, “We think the next major beauty brand is not going to be built over the counter, it’s going to be built online.”
While Park’s prediction of the future of the beauty industry was dead on, the future of the brand she built is now uncertain. Julep is now in the hands of AS Beauty.
2007: Julep was founded by former Starbucks and Boston Consulting executive Jane Park as a single physical nail salon to act as a testing lab for product development. The first Julep outpost opened near University Village in Seattle and was soon followed by locations in downtown Seattle, Bellevue, and Gig Harbor.
2011: The brand moved into e-commerce, launching their site in December, and expanded the “Idea Lab” to the digital sphere with a 5,000-member community of loyal customers to provide early feedback on product ideas. Idea Lab enabled Julep to crowdsource feedback for its product ideas before the manufacturing stage, gauge enthusiasm, and generate preorders.
2012: Julep was recognized as an Indie Brand of the Year finalist in the Cosmetic Executive Women Beauty Awards. The company also launched on QVC and in Sephora nationwide, with skincare and color cosmetics in the pipeline planned for 2013 and 2014.
2013: As e-commerce revenue tripled, the brand launched 300 new products and the funding poured in. Andreessen Horowitz led a $10.3 million Series B financing round bringing its total funding to $20.3 million. By 2013, Julep reported it was generating more than $20 million in annual revenues.
In December Julep opened a New York City pop-up store in Union Square on lower Fifth Avenue.
2014: The company launched a $75,000 crowdfunding campaign for a nail-polishing tool called the Plié Wand, designed by IDEO as a way to test consumer interest. This 30-day campaign sought to raise $75,000. Mavens, or members of Julep’s subscription community, could reserve the product for $20. Other tiers ranged from $40 for a wand and two of Julep’s nail colors, all the way up to a $10,000 option where you could create your own custom nail color.
Julep changed the paradigm of subscriptions with the launch of a customizable monthly beauty box.
Julep raised a $30 million Series C in venture funding in an oversubscribed round. Azure Capital, Madrona Venture Group, and Altimeter Capital participated in the round, joining existing investors Maveron and Andreessen Horowitz. Actor Will Smith and rapper Jay-Z also made private investments. At this point, the Seattle-based company employed around 200 people, and this round brought the total funding raised to $56 million.
2015: The brand laid off 8%of its staff. According to CEO Jane Park, 17 employees were laid off as part of a decision that “align[s] with Julep’s greatest long-term opportunities and to best position the company for success and category leadership.”
Julep’s subscription service came under fire when the company received an “F” rating from the Better Business Bureau. The BBB notified Julep on Aug. 19, 2014, of the complaint pattern, but its website noted that the company has not responded to its request to “address the pattern.” Julep responded with a statement blaming the influx of complaints on a surge in business and shipping errors. As of January 2015, Julep still maintained an “F” rating from the Better Business Bureau.
2016: The brand, along with two other beauty brands, Clark’s Botanicals, and Laura Geller, was acquired by Glansaol and private equity firm Warburg Pincus. Glansaol paid more than $120 million to acquire the three businesses. It merged all three of its newly acquired brands into a single umbrella brand known as Glansaol.
For Warburg Pincus, the point of the acquisition was to consolidate most of the administrative and other back-office functions of the three businesses. Glansaol made a significant investment in the development of a shared back-end enterprise resource planning (ERP) system to integrate the supply chain, personnel, administration, and clerical management of the brands. However, differences between the three brands proved to be a challenge and unlocking the synergies was a priority over the needs of the individual businesses.
2018: Glansaol and, by extension, Julep filed for Chapter 11. Julep closed its Seattle locations and headquarters in December, laying off more than 100 staff in the process.
2019: AS Beauty, a New York-based company formed by Alan and Joey Shamah, the founders of E.L.F. Beauty and Fit For Life, and the Azrak family, who previously ran a pajama business that was sold to Li & Fung in 2007, completed its $16.2 million asset purchase from Glansaol on Feb. 7.
The company decided to shut down Julep’s popular beauty box subscription program called Maven and also got rid of the company’s reward points. Customers took to social media to voice their disapproval.
“On Day 2, we decided to exit Ulta Beauty for both brands. It wasn’t profitable,” Joey Shamah told CEW, citing full-time talent, expensive fixture changes, and markdowns.
Julep is being transitioned to a mass-market brand with a Target 350 door launch on September 1st. The brand brought prices down 40% across 60 SKU’s to make the brand more accessible. A messaging campaign on the brands website is in place to explain the price drop and the brand’s new availability at Target while and 500 Influencer initiative will support the education.
The beauty industry has evolved at warp speed since Julep launched in 2007. Perhaps the pivot to masstige by new owners that have a track record of success in the channel will breath new life into the brand.
Photo: via Julep Facebook