PARIS — Call it the wonder CEO shuffle.

Because the start of this yr especially, a plethora of top-level executive changes have taken place.

L’Occitane Group, Avon Products Inc., Biologique Recherche, L:a Bruket, Susanne Kaufmann, Fresh and Orveon are among the many cavalcade of corporations — of all kinds: small to large, public to non-public, in every product category — to call recent chief executive officers. 

Olaplex, Amika, Avon Products Inc., Beautycounter, Eighth Day, Fresh, Orveon, Harklinikken and Fekkai are amongst others to have recent C-suite recruits, too.

A confluence of phenomena led up to those appointments.

“Beauty is an incredibly dynamic category, and with the scope of change that corporations and types must sustain with, sometimes shifts in leadership might help support brands as they evolve to align with that,” said Sasha Radic, managing director at Jefferies.

The wonder market can be highly competitive. “And it’s only gotten more competitive over the past three or 4 years,” said John Long, North America retail sector leader and senior client partner at Korn Ferry. 

The market saturation makes it harder for beauty-makers to have truly differentiated propositions. 

“Just that level of competition creates a challenge for any CEO to not only maintain their market share, but to grow their business — and the pie is barely growing a lot,” Long said. “So, obviously, it is advisable to be well-positioned in the long run.”

He described 2023 and 2024 as “reset years.” “They’re years when corporations are [asking]: ‘Do we’ve the suitable leader for the business, given the mandates that we would like them to drive going forward?’” Long said. “Actually through COVID-19, there was a bent to not do an excessive amount of that will proactively disrupt management teams.”

Coming out of the coronavirus pandemic, which for a lot of consumer-focused corporations was a extremely strong period, boards and investors are searching for gains.

“Last yr generally in retail was fairly lackluster,” Long said. “There was growth, but whenever you take out inflation, for essentially the most part, growth was muted. In order we head into 2024, the main target of investors is around growth.”

Since there was less M&A activity as COVID-19 unfurled, that’s now ramping up, as well, especially for personal equity in the wonder space. 

“We expect to see more transactions in 2024 and 2025 than we’ve seen over the past yr or two,” Long said.

Anne Raphaël, managing partner at Boyden, noted private equity is anticipated to select up investment momentum in the wonder space within the near term.

“Beauty has at all times been — and is increasingly — a superb business to speculate in if you could have the suitable brand and the suitable team,” she said. 

It stays key to repeatedly transform the business, with innovations similar to product introductions and retail evolutions, including services.

“As a job function, it’s incredibly complex as a CEO,” said Long, adding that if investors aren’t seeing growth in a beauty business this yr or last, they may very well be seeking to make executive changes.

“One other thing to take into consideration is the skill set that you just needed as a CEO to get through the disruption that was COVID-19 isn’t necessarily the identical skill set that you just need now to grow the business,” he said. “It may very well be, you could possibly succeed. It’s just a few CEOs aren’t going to be as equipped to deliver on a growth mandate as others.”

A number of CEOs have felt they’re able to move on post-COVID-19, because it was such an intense period. The health crisis caused changes for people personally in addition to for businesses and the way brands interact with consumers. 

“That’s reflected in shifts in leadership, in shifts in management and the dynamic needs in leading a beauty brand today,” Radic said. “All of that’s coming together and being shown in a changing landscape of name leadership, as well.

“Every situation is restricted to the corporate,” she continued. “The explanation behind one brand’s shift in management just isn’t similar to it’s for one more.”

“All of them have a unique explanation and justification,” agreed Joël Palix, founding father of boutique consultancy Palix Unlimited. 

CEO changes are nothing recent to the wonder industry.

“It’s often been the case as brands evolve that they’ve brought in leaders,” Radic said. “Often, the leaders that you could have from early stages to barely larger scale are usually not the identical leaders that you could have whenever you’ve scaled it from an early stage to a significantly larger company. Also, sometimes people just retire.”

“Sometimes it’s more an evolution within the organization — where you progress from founder to CEO,” Palix continued.

That’s the case, for instance, at Biologique Recherche, Harklinikken, Fekkai and Eighth Day, with Jean-Guillaume Trottier, Stuart Miller, Tennille Kopiasz and Savannah Sachs, respectively, arriving to take the reins.

In some instances, when the founders remain, the CEOship is a recent style of role, explained Palix. 

Other times, a brand’s ownership changes, and that can lead to a recent CEO appointment, like at The Body Shop. Some groups, similar to Amika and Avon, have promoted internal executives — Chelsea Riggs and Kristof Neirynck.

Gregg Renfrew returned as CEO at Beautycounter, the brand she founded in 2013 and left one yr ago.

Amanda Baldwin succeeded JuE Wong on the beleaguered hair care brand Olaplex, with investors believing a management change to be vital for a brand turnaround.

Meanwhile, Orveon, the Advent International-owned parent company of BareMinerals, Buxom and Laura Mercier, named Neela Montgomery to the CEO role.

As the wonder market shifted over the past two years, corporations’ needs have reflected that. Still, some tenants remain intact. A beauty brand’s success involves its DNA, fundamentals, products, scale and scalability, one source said. 

The primary two elements are key as a brand grows net sales as much as 5 million euros, and from 5 million euros to fifteen million euros. (Many brands today have reached the 5-million-euro-to-10-million-euro sales threshold.) Nevertheless, it’s one other story altogether to scale from 15 million euros to 40 million euros or 50 million euros. 

The CEO who grows a beauty business as much as 15 million euros doesn’t necessarily have all of the expertise to take the brand to the subsequent step and level, especially in the present difficult environment.

“[For a beauty CEO], it is advisable to have numerous expertise in several things,” said an industry source. “Quite a bit has modified prior to now 24 months. There’s massively increased competition post-COVID-19; we’ve seen numerous brands emerge. It’s a really crowded market without delay.”

Further brands that were purely direct-to-consumer focused have less of an edge than they did through the pandemic, since others have filled the gap with their DTC approach. 

Some consider it’s the tip of the DTC-led playbook. For the last five to 10 years, there was a crystallization of what the playbook was to grow, which was around performance marketing-led, digital marketing-led acquisition of consumers, and having paid media drive numerous that conversion.

Unit economics and media cost don’t sustain that playbook anymore, so there’s a shift to brand marketing in the standard sense of the term. That’s where a CEO’s experience comes into play, including in omnichannel communication and retail distribution channels, because the role of wholesale has returned.

Not all brand leaders have been agile enough to shift gears or were too married to at least one vision, some industry sources consider.

A CEO’s mindset is very important. “They should have a transparent openness to all the brand new trends and to alter,” said Edouard Thoumyre, managing partner at Accur Recruiting Services. He also noted how beauty is becoming more closely linked today to the hospitality industry and the experience that gives.

Plus, there’s a difficult microeconomic environment, with difficulties in Asia and travel retail, for examples. 

“All of this makes scale much more vital, and which means it is advisable to have a powerful omnichannel and international expertise, and a really strong institution of promoting and business strategy,” the industry source said.

Due to this fact, as a way to construct a sustainable beauty business that gets to the 40-million-euro-to-50 million-euro sales threshold — when the strategics turn into all for possibly acquiring brands at a high valuation, like 5-times sales — it is vital to have an age-old business model, be strong in multiple retail channels and geographies, and have powerful marketing strategy execution.

Quite a few newly named CEOs in such corporations as Biologique Recherche, L:a Bruket and Susanne Kaufmann are coming from large groups, wherein they’ve successfully grown brands at corporations similar to the Estée Lauder Cos. 

Raphaël noted all of them have a global profile and strategic vision, while with the ability to maintain a healthy mix with creativity, specificity, brand DNA and the suitable level of scaling up.

Ada Lien, who was named CEO of Fresh at LVMH Moët Hennessy Louis Vuitton, is one other Lauder alumna.

Executives being recruited from large groups also are likely to have a powerful entrepreneurial lens for execution and marketing strategy, alongside rigorous training, in keeping with the industry source.

Further, some such executives have been attracted by the potential of joining a much smaller brand and being a part of the story of scaling the business, possibly with a possible ultimate sale, the industry source continued.

“In most of the recent appointments…people had very strong international sales backgrounds,” Thoumyre said.

Laurent Marteau, recently named CEO and managing director of L’Occitane Group, is amongst those. He was formerly at La Prairie Group as vp for global travel retail and special channels, and a member of the board of directors, then became vp for Europe, the Americas, Middle East and Africa.

“A superb CEO just isn’t a straightforward person to search out in beauty,” Palix said. “Beauty requires people to have soft skills, but in addition hard skills because it is advisable to manage the business and deliver.

“It’s almost like managing various kinds of businesses, because you could have products on one side, the retail and services. You should be agile between the three — and be comfortable with digital and technology,” he added. “It takes numerous skills.”