How Olaplex became Luxury Hair Care’s great success story – WWD

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The Olaplex hair care business started small.

The founder, Dean Christal, approached scientist Craig Hawker with an idea: to create a solution to solve the problem of hair breakage. Hawker created a molecule, called Bis-Aminopropyl Diglycol Dimaleate, which rebuilds broken hair bonds caused by chemical damage from hair coloring and mechanical damage from styling. Olaplex – and the link building category – was born and was patented.

Christal introduced the product to the professional hair community, testing it with major colorists including Tracey Cunningham, whose clientele includes Jennifer Lopez, Charlize Theron and Emma Stone. It quickly became mainstream in the colourist community, allowing them to achieve new feats, including platinum blonde colors for those with naturally dark locks.

Olaplex went public in September.
Photo by Vanja Savic

“The biggest fear they have is when they take their client to the sink… and they start removing the sheets and they start to see breakage. Of course the client can’t see it, they can see it and your heart is really beating, ”said JuE Wong, CEO of Olaplex, who joined the company in 2019. With Olaplex, which colorists could simply use by mixing it with the chemical and color treatments they were already making, professionals began to see less damage, Wong said.

“With Olaplex 1 and 2, # 1, they didn’t see such a breakage – the hair came out stronger, it looked better and the customers were super happy. Tracey Cunningham was right over the moon, and that was the genesis of word of mouth in the workplace, ”said Wong. “It was much better than any ad campaign, any marketing campaign.”

Between 2014, when Olaplex launched, and 2018, the company only had two products for the rear bar – # 1 and # 2 – and one for customers to take home and use between salon visits. , n ° 3. They were all focused on repair. broken capillary bonds, instead of coat the hair strands to improve the feel.

Then Sephora came knocking, Wong said.

“Customers would ask Sephora, and Sephora would hear it all, ‘No. 3, ”searches their website, calls customer service, and starts asking,“ What is this # 3? Is it a perfume, like Chanel n ° 5? ‘ When they found out it was Olaplex, they called Olaplex, ”Wong said.

It took a while for the brand to make the decision to start working with Sephora due to its allegiances to the professional community, Wong said. The company told its business partners that it would never sell # 1 or # 2 in retail and set out to create a line that took at-home hair treatments to the next level. .

“There really wasn’t any treatment reference that talked about mending your broken disulfide bonds. A lot of the treatment products were hair masks, which really masked the problem. Your hair will feel really good when you use and rinse it, but once you rinse it, your hair will be back to how it used to be, ”Wong said. “But # 3 actually fixed your hair, so even after you shampooed and touched your hair, it was really good. By word of mouth, it widened.

Today, Olaplex has tthree rear bar products, and retail and direct to the consumer sells No. 0, a bond-building treatment; No. 3, a “hair perfector”; No. 4, a bonding maintenance shampoo; No. 5, a bond maintenance conditioner; # 6, a smoother binder; No. 7, a binding oil and No. 8, an intense hydrating mask for binding. The company tries to avoid secondary packaging, Wong said, in order to limit its carbon footprint.

As the brand’s products gained traction, Olaplex had started to gain a lot of attention, including from competitors, who began to launch their own products that claimed link building properties. Legal battles between Olaplex and L’Oréal have spanned multiple continents and have since been settled out of court, according to an Olaplex spokesperson. The terms of the settlement are private, she said.

These cases did not affect the financial success of the company. Olaplex posted a 90 percent increase in sales for 2020, during the pandemic, with $ 282.3 million in net sales, compared to $ 148.2 million in net sales for 2019. In forms filed with the United States Securities and Exchange Commission, Olaplex reported sales in the first half of the year. of 2021 was up 171% from the previous year period, to $ 270.2 million, with net income of $ 94.9 million.

Olaplex filed these SEC forms as it prepared to debut on the Nasdaq – a move that Wong says was made due to Nasdaq’s demands for board diversity.

“The Nasdaq requires listed companies to have at least two different candidates on their board of directors, and we felt that was a very good tenure,” Wong said. “Sometimes you almost have to legislate on behavior or else you don’t get the result.”

Olaplex employees are 77% women and 40% minorities, Wong said, and 18% of the company’s board of directors are minorities.

Olaplex went public on September 30. Valuation expectations were originally around $ 8 billion, but when Olaplex shares started trading at around $ 25 a share, the company’s valuation nearly doubled, approaching 16. billions of dollars. (When Estée Lauder Cos. Went public in 1995, the stock was priced at $ 26 per share.) Since then, Olaplex’s share price has remained fairly constant, hovering through the mid-1920s. company is expected to hold its first earnings call in November.

Its outstanding financial performance, along with the success of its IPO, is why Olaplex is this year’s recipient of WWD Honor for Best-Performing Beauty Company – Small Cap.

For the IPO, Olaplex sent most of its team to New York. “The special sauce of Olaplex is that every employee feels like they are part of the success. It’s not just the success of the leadership team or the success of the original team, but we all came together, ”said Wong.

Wong joined Olaplex in early 2020, shortly before the start of the coronavirus pandemic. Previously, she had managed Moroccanoil, Elizabeth Arden and Strivectin. When Advent International bought Olaplex in 2019 at a valuation that industry sources said was around $ 1 billion, I hired Wong to oversee the continued expansion of the brand.

She was employee number 36 on a completely remote team. “The original team gave me a solid foundation to build on,” said Wong. “They are the ones who made it this far.”

Gradually, the team has grown and now numbers around one hundred people, all of whom work remotely. “As we grow you have to be more careful about how to bring people together. Even with or without COVID-19, we have always had our ongoing calls with our team members. We have our town halls on a monthly basis, a monthly meeting of senior team members, and if COVID-19 was not there we would have two annual off-sites for the whole company to come together, ”said Wong.

Wong regularly asks Olaplex employees about their feelings about the corporate culture. When she started, the NPS score for Olaplex employees was around 50 and, after a February poll, rose to 69, she said.

“Over 90 percent of employees surveyed said they felt very much in touch with the culture of the company,” Wong said. “We did this survey on purpose before the bonus announcements because we didn’t want to skew the results. It was great to see that people, before they even knew they were going to get bonuses, were still very invested in the business.

Wong said the company’s success was built on patented technology and a strong community, which has overlapped with the rise of premium hair care.

From a marketing standpoint, the Olaplex community has been critical to its success.

Olaplex has a long history of social media accounts, including a separate professional-only Facebook page where colorists can talk about the products and their use. Consumers are also talking about Olaplex on social media, Wong said, and the company has 12.4 million uses of its hashtag for content that is “largely unsolicited,” she said.

Wong said that given the amount of content, which she said would take $ 300 per article to produce, gives Olaplex “nearly $ 4 billion in user-generated content.”

In 2020, Tribe Dynamics said that Olaplex gained around $ 95 million in media value due to social media posts, which represented around 33% of Olaplex’s total sales for the year, noted Wong. This allows Olaplex to invest in its community, instead of spending directly on marketing, she said.

The rise of Olaplex has coincided with a major increase in the prestige hair category in general. In the second quarter of the year, premium hair care grew 70% year-on-year to $ 346 million in quarterly sales in the United States, with particular strength in hair color and care products.

Wong said hair care is ritualized today, just like skin care.

“The difference with premium hair care today is visibility – you can actually see a difference. And a lot of times when you see a difference you remember, “Oh, I want my hair to look like this,” Wong said.

FOR MORE ABOUT WWD.COM, SEE:

Healthy hair aspirations drive premium hair product sales

Olaplex soars in IPO

JuE Wong talks about the success of Olaplex


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