Beautycounter founder loses job after selling $1 billion business

Renfrew, 55, launched clean beauty brand Beauty in 2011 with a mission to disrupt the cosmetics industry by only selling products made without “questionable or harmful chemicals.” Established a counter.

Beautycounter started by selling makeup and hair care products directly to consumers on its website as well as through a network of distributors and supporters. The brand currently has about 65,000 supporters, many of whom post about the company’s products on social media and receive a commission from the resulting sales, a company spokesperson said.

Beautycounter has two physical locations, one in New York and one in Denver. A partnership with Ulta Beauty last year placed the product in the retailer’s 500 stores across the United States.

Along the way, Renfrew and Beautycounter raised more than $93 million from investors, according to Crunchbase. Then, in 2021, private equity giant Carlyle Group bought a majority stake in the business. Carlyle did not disclose the amount paid, but the company said the deal valued Beautycounter at $1 billion.

Less than a year later, private equity owners told Renfrew that the job of delivering Beautycounter’s future growth was to be carried out by an outsider, who would replace Renfrew as CEO in February 2022. Mark Ray, a long-time executive at the cosmetics company where he served as CEO, should be left in charge.

Renfrew remained at Beautycounter as chairman of the board and chief brand officer, but took the news hard. Renfrew, a serial entrepreneur who started his house cleaning business as a 19-year-old college student and then sold his bridal registry online to Martha His Stewart, is used to being in charge and now But I felt like I was the best person for the job.

She didn’t have to wait long for a chance to prove herself right.

Ray’s tenure as CEO lasted just 16 months. Carlyle appointed an interim CEO in June 2023 without providing a detailed public explanation. Earlier this month, the private equity firm announced that Renfrew would be returning as CEO. (Carlyle declined to comment when contacted by CNBC Make It.)

When Carlyle approached Renfrew, she told CNBC Make It that she was just “crazy enough” to accept. She aims to continue guiding her Beautycounter toward a new phase of growth while honing her own legacy as a founder.

“At the end of the day, I believe in the company. I believe in the company’s mission. I set out to change the world.” [and] I really believe that,” she says.

In a statement announcing Renfrew’s return as CEO, Roberto Marquez, Chairman of the Board of Directors and Senior Advisor at Carlyle’s Beautycounter, said Renfrew was “supportive of working together to drive results and create meaningful change.” “We have a proven track record within the company of engaging both managers and employees.” . ”

Here, Renfrew talks about what it was like to lose control of the company he built from the ground up, why he still doesn’t regret selling a majority stake, and the risks of returning to his old job. Masu.

CNBC Make It: Carlyle asked you to step down as CEO of the company you founded. Was that a tough pill to swallow at the time?

Renfrew: It was really, really difficult. [Carlyle and I] From the beginning, we had talked about bringing in an operating partner so that I could focus more on our community of independent advocates, be the face of the brand, and focus on advocacy in Washington. But it’s always difficult for founders to lose control and not be able to make all the decisions.

It’s just difficult when you get to control the baby. …It’s your vision, it’s your brand, it’s your identity. Of course it’s difficult to separate. I don’t think any founder can say it’s easy. It’s not easy for everyone.

That doesn’t necessarily mean it’s the wrong decision. But it’s not easy for everyone.

Do you regret it now?

I don’t regret selling my business. The work we do matters. And I wanted to make sure that the job and the company would last for a long time.

I sold my business just before COVID-19 took over the world and caused many things to change and swirl. Could you have made a better decision in the moment? Of course. Did we really make a good decision? Yes.

So it’s a combination of both, and you can’t live with regrets for either of these decisions. Because they have already been sent down.

Because you can’t focus on what happened in the past, you can only look to improve in the future.

What went through your mind when you first realized you had the option to come back as CEO?

There was unresolved and unfinished business to go back and do. I feel responsible for knowing what I know, accomplishing what I have achieved, and carrying this torch forward. I know I’m the best person for this job.

The future is bright for Beautycounter and the brand has great potential [and] We’ve built this ecosystem with independent sellers and an omnichannel approach anchored by Ulta Beauty and our e-commerce platform. There are opportunities in our business model and opportunities to continue fulfilling our mission. [and] There are opportunities for economic empowerment, primarily for women.

I will do my best. I don’t have all the answers, but I do have the vision and commitment. And we believe we can continue to lead and disrupt.

If this mission is not successful, have you weighed the risks of returning to the CEO role, both for your legacy as a founder and for the company as a whole? Have you thought about saying no?

Yes, yes. I absolutely considered not coming back as CEO. That’s a big undertaking. And yes, of course I worry about my legacy. I’m always worried. Everything about this business keeps me up at night.

But I’ve been saying this since day one: failure is not an option.

What I can do is always surround myself with the best and brightest people, to stay in the community of people who have built this movement, to be curious, to ask the tough questions, to think about how things are going. only. Be willing to be flexible and change.

We have a big opportunity. And I’m not going to be talking to you in two years about how my legacy was tarnished because of Beautycounter.I’d rather you [say]”They’re talking about you like they’re talking about Steve Jobs. He was out, and then he came back, and that’s how Apple is today. Please take a look.”

It is my intention at Beauty Counter to blow this away in the most positive way.

What do you think founders can bring to a business as leaders that no one else can?

After all, founders have a vision. And I think if the management team respects the original vision, the DNA of the brand, the core tenets of why the brand exists, it can be carried over from the founders.

One thing I think is important for us at this point is to focus on why we started this business in the first place. Who are we and what do we represent? That’s something only the founder can really convey to the team.

I think this is a win for all founders because sometimes founders, especially female founders, are overlooked or undervalued. People say founders are crazy or whatever, but they’re passionate people who see what seems impossible and know it’s possible. They are problem solvers.

This interview has been edited and condensed for clarity.

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