Estée Lauder Cos. Inc.’s $1.5 billion buy of Too Faced Cosmetics LLC kick-started the next chapter of the Irvine-based company, which now aims to expand its global reach and nearly double its workforce.
Just don’t expect the youthful brand to cling to its new parent.
“We are not being integrated at all with Estée Lauder,” said Jeremy Johnson, who started Too Faced with Jerrod Blandino in 1998 from their apartment in Irvine. “We are running completely separate, and that’s something we felt strongly about, and they really supported us.”
Johnson shares the chief executive’s title with Eric Hohl, while Blandino serves as chief creative officer.
That trio apparently will remain in charge of day-to-day operations under its new owners.
“[Estée Lauder Executive Group President John Demsey and Chief Executive Fabrizio Freda] agreed from the very beginning, when we were in talks, that we would remain independent and true, and when we needed support and we could use the amazing muscle that they have, that we would call upon them—but they would allow us to continue to do what we do and in the same way we do it,” Blandino said.
That means sticking around in Orange County, where the “relaxed luxury, skater-surf culture” helped Too Faced soar but also stay grounded as it notched about $270 million in revenue last year.
“There is something cool and edgy but also friendly and fun and free about OC and Southern California,” Blandino said. “I feel that we kind of stayed true to that. We love glamour, and we love makeup, but there’s also something approachable and casual about OC and the product and the brands that come out of it.”
The company employs 122 here and 275 globally. Last year it took over a former Department of Motor Vehicles field office near the Costa Mesa (55) Freeway. The founders made it their own, complete with pink workstations, a video recording studio, mock retail space, and an outdoor seating area with a fire pit and a dog run. A 15,000-square-foot second story is under construction “to accommodate 200 more people we need to hire,” Blandino said.
The couple, who met about 22 years ago and married in 2009, worked for New York-based Estée Lauder prior to launching Too Faced—Blandino manned the makeup counter at South Coast Plaza’s Saks Fifth Avenue, while Johnson was at Bloomingdale’s at Fashion Island.
They funded Too Faced with a loan from Blandino’s parents and from their own credit cards.
“We set off, and it was do-or-die, make-or-break every day—every single day,” he said. “I remember it was three years in when we actually paid off all of our credit cards, and I just felt like we could never be more successful.”
Too Faced got an early boost from an article in Vogue magazine—exposure that quickly led to shelf space at Sephora, Nordstrom and the trend-setting Fred Segal boutique in Santa Monica. The inaugural collection— featuring “silver and blue, pink and beige” hues—included 10 eyeshadows and lipsticks and eight nail polishes. They also added glitter to the mix, a first for the makeup industry according to Blandino.
“There was a wave of experimentation and innovation coming in the late 1990s that we rode,” he said, adding that the crop of independent brands around the time included Hard Candy Inc. in Beverly Hills, with a nail polish selection that included “Hick,” “Trailer Trash” and “Shag.” Also new was Newport Beach-based Urban Decay, which launched in 1996 with a palette that included shades named “Plague,” “Roach,” “Smog,” “Asphyxia” and “Oil Slick.”
Too Faced began “reaching that customer that Jeremy and I worked with at Saks and Bloomingdale’s, which were the girls who just want to have fun, and they love being girls, and they love makeup.”
Own Your Pretty
The company’s slogan called on customers to, “Own your pretty.”
The hardest part of growing the brand was “learning how to become an expert in business without going to business school,” Blandino said. “We knew our clients, we knew products—we knew everything we needed to know on that side. But learning how to create, manage and grow a business, especially to this caliber, is an incredible learning experience. We learned more from our failures than we did our successes at times—so being smart, staying awake, never giving up … prayer helps, too.”
Then-Chief Financial Officer Hohl joined the company in 2008. He held the same post at Irvine-based Billabong International and Hard Candy, and was chief operating officer at one-time hot label Mossimo Inc. in Irvine. Lynda Berkowitz came aboard in 2009 and was president through 2014. Her previous stints included vice president roles at Perricone MD and Bobbi Brown Cosmetics.
The market first took tangible note of Too Faced’s growth when Blandino and Johnson sold a majority stake to San Francisco-based Weston Presidio in early 2012 for $71.3 million, according to documents filed with the Securities and Exchange Commission.
“We realized we had reached an elevated level of success but that there are an incredible number of growth opportunities still ahead,” Blandino said at the time. “With availability in over 1,200 stores in the United States and 500 internationally, Too Faced has great opportunities to expand internationally, online and with our current retail partners.”
Too Faced “quadrupled” in size during the three years under Weston Presidio, according to the firm, which cashed out in 2015 for a reported $500 million. Too Faced founders and the senior management team retained “significant ownership” in the company while General Atlantic in New York took a majority stake. Other bidders included L Capital in Paris and Estée Lauder.
Estée Lauder got a 100% ownership in Too Faced in a deal that closed in December according to the SEC.
It was the 70-year-old company’s largest acquisition to date.
Andrew Crawford, managing director and global head of retail and consumer at General Atlantic, told Fortune magazine that “General Atlantic, in partnership with the co-founders, pursued Estée Lauder’s interest in acquiring Too Faced without formally opening themselves up to other offers.”
“Not always what you want to buy you can buy the moment you want,” Estée Lauder’s Freda reflected on missing the initial opportunity during a conference call with analysts in November. “We did look into this business before, and we were not successful” in the 2015 sale.
Too Faced, whose consumer base is mostly under 40, is “expected to strengthen” Estée Lauder’s “leadership position in the fast-growing prestige makeup category globally … and win with millennials and [Generation] Z.”
The parent company will help Too Faced grow new and existing markets, “both in the U.S. and internationally,” Freda said.
“The entrepreneurial spirit at the heart of the Estée Lauder Companies is evident in the remarkable success of Too Faced,” Executive Chairman William Lauder said in a statement. “We are absolutely delighted that Jeremy and Jerrod are ‘returning’ to the company where they began their careers in beauty, and we welcome the entire Too Faced team to our family.”