Celebrity hairstylist and co-founder of The Beauty Department Kristin Ess partnered with brand incubator Maesa to develop a haircare brand that launched exclusively in partnership with Target in 2017. By all accounts, the Kristin Ess Haircare brand has been a runaway success.
Beauty brand incubators have become a dime a dozen, but Maesa has refined the business model over the past 25 years. In March 2019, Bain Capital Private Equity took a majority stake in the brand incubator started by Julien Saada and Gregory Mager in 1997. At the time of the deal, Maesa reportedly generated over $230MM in global annual sales.
In just two years, Kristin Ess Haircare was approaching $100 million in revenue. Maesa has exploited opportunities in what has been a commodity category, breathing new life into the hair category at mass, leveraging innovation, trend, and influence. On the heels of the Kristin Ess success, Maesa followed, launching influencer-backed haircare brands: TPH by Taraji and Anomaly by Priyanka Chopra Jonas launched exclusively with Target, and Hairitage by Mindy McKnight launched exclusively with Walmart.
Things are not always as they appear. Apparently, trouble has been brewing between Kristin Ess and Maesa. On November 22, Ess filed a breach-of-contract suit in the US District Court for the Central District of California. The filing claims that Maesa has deprived Ess of creative control and ownership of her brand while also preventing her from pursuing new opportunities. Ess is looking to reclaim the rights to her eponymous brand and be free from "unreasonable restraints" on her business.
Kristin Ess also took to Instagram to share with her community that she had initiated a lawsuit against Maesa.
“For the last few years, I’ve been quietly standing up for myself behind the scenes. It saddens me that it’s come to this, but after exhausting every other possible option. I am entering into what will likely be a long and emotionally draining lawsuit with my business partners at Maesa.
I’ve always been as transparent as possible in this space, so I want you to hear directly from me. I’ve done my absolute best to build a brand that I can be proud of; something that embodies my expectations around performance, aesthetic + and that feels meaningful in the haircare aisle. But sometimes, when your career-long dream of having a brand actually becomes worth something, greed enters the chat.
I am suing my partners for several reasons, but the primary one being that I was misled during this partnership. They sold themselves to me as a beauty brand incubator, touting their ability to launch, grow + eventually sell my brand to ensure its continued success. Instead of holding true to their commitments, they've continued gripping onto my brand, using it as a piggy bank to fund their many other ideas. Their actions are not fair to me, or to the long-term growth of Kristin Ess Hair.
I genuinely hoped we would get through this privately, but the time has come to take a different approach. The one thing I know for sure is– if I don't fight with everything I've got in this moment, The Kristin Ess Hair Brand will continue to suffer and deviate from the path I've always dreamed of for it. I can't just sit back and watch that.
That's all the information I can share for right now but will keep you in the loop as much as I am able."
It appears the heart of the claim is about money. The filing details that in exchange for exclusive rights to manufacture, sell, distribute, and market Kristin Ess Hair products, Ess is compensated by "limited" sales royalties and a modest annual guarantee. It would not be until the sale of the brand that Ess would realize "equity proportionate to her contribution" from a 25 percent stake of proceeds from a sale. The suit alleges that Ess learned that Maesa was contacted by L'Oréal about a potential purchase of the Kristin Ess Hair business and did not pursue the opportunity.
"Relying on the promises and affirmative statements of Maesa, Ms. Ess agreed to this in lieu of direct equity in the business because it created an obligation for Maesa to pursue a transaction with sales proceeds in excess of $40 million," the lawsuit said. "Despite this, Maesa has already taken advantage of Ms. Ess' position by reaping significant value from the Kristin Ess Hair business by selling a majority interest in Maesa to Bain Capital in 2018, structured in a way to circumvent any obligation to Ms. Ess. The time has now come for Ms. Ess to receive a commensurate benefit for her efforts in creating value for Maesa, Bain and Kristin Ess Hair."
The suit also claims the brand will generate more than $250 million in retail sales in 2022, representing more than half of Maesa's revenues. To date Maesa has not exited any of the brands it’s incubated. Ess' desire for a strategic exit is understandable given the current interest among strategics in the hair category.
In a statement given to WWD, Maesa Chief Executive Officer Piyush Jain said, "Since its inception, Maesa has been dedicated to the growth and expansion of the Kristin Ess brand. Maesa appreciates the early insights and contributions Ms. Kristin Sivesind made to the brand. We've provided various affordable salon quality luxury hair care products to consumers worldwide. Unfortunately, the parties have several disagreements about aspects of our commercial agreement. We adamantly disagree with Kristin's allegations about Maesa and the parties' relationship. However, even during this time of disagreement, Maesa remains committed to focusing on and continuing the success of the Kristin Ess brand and providing consumers with exceptional hair care products worthy of the trust of the Kristin Ess community and consumers. We cannot comment any further on this matter at the current time."
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