LA Times | Insights on the Business of Beauty, Fashion and Consumer Goods

Sep 2024

Originally posted by the LA Times on September 23, 2024.

Ashleigh Barker, Director in Lincoln’s Consumer Group, is optimistic about the outlook for the beauty industry.

“While broader consumer discretionary has no doubt felt pressure amid the current macroeconomic backdrop (high interest rates, geopolitical tensions, uncertainty around upcoming presidential elections), the beauty of the beauty industry is the consumer’s inherent desire to invest in their well-being and find those small joy-factors, whether that is in the form of a new lipstick, a new skincare serum, hair growth supplement or fragrance that reminds us of a memorable vacation,” she said.

There are several trends driving growth in beauty: convergence of skincare and cosmetics, “skinification” of hair and scalp and a body care awakening.

Investors are looking to put their dollars to work in brands they believe will still resonate in 20 years.

“Beauty brands positioned around a core offering or benefit that still find ways to innovate on new delivery formats or demonstrate tangible results and claims backed by clinical evidence that proves products deliver on their promises will be most successful in capturing investor interest,” Ashleigh said. “Distribution and financial stability are two focus areas.”

The current market is challenging for early-stage brands in sectors like beauty and fashion seeking growth capital, Ashleigh said. Though there are plenty of investor funds available, risk appetite is low and deal criteria is higher than ever.

Founders should focus on how to attract value-added investors, she noted.

“Beyond capital itself, value comes in many forms, i.e., access to distribution networks, new capabilities, prior experience with CPG companies that have pursued a path to exit and the right set of terms,” Ashleigh said. “Founders should be clear about their vision for the future of their company and the role they intend to play, ensuring they align themselves with a partner who shares their vision, believes in the mission or purpose of the brand and has full confidence in the team executing the growth strategy.”

Other industry experts commented on the fashion and consumer goods industries.

View additional insights in the original article.