How popular 'clean' beauty brand collapsed after private equity takeover - as the huge cut in its top saleswomen's salaries are revealed

Clean beauty favorite, Beautycounter, plummeted from a multi-million dollar marque to closure aft a backstage equity takeover, resulted successful devastating pay cuts exceeding 50% for their employees.  

Gregg Renfrew, who started Beautycounter pinch a passion for cleanable skincare, began her multi-level trading exemplary successful 2011. Carlyle, an investing patient pinch $425 cardinal successful investor power, took a chance and invested $600 cardinal successful nan marque successful May 2021.

But this finance turned retired to beryllium 1 of Carlyle's biggest failures successful 37 years, pinch each of nan money they put into Beautycounter lost.

Not only did Carlyle's takeover destruct institution morale, but sliced their sellers' income by much than half. 

Notable seller Renee Hill, who had astatine 1 constituent brought successful millions of dollars for nan institution and received a $177,000 yearly paycheck, is now making $19,000, according to nan lawsuit.

'There's a batch of harm that has been done,' Hill said. 'I don't judge I could ever measurement backmost into that space.' 

Upon acquiring a controlling liking successful Beautycounter, Carlyle facilitated a partial waste of Ms. Renfrew's ownership for astir $50 million, according to individuals straight progressive successful nan transaction. 

Renfrew remained arsenic nan company's CEO, and some parties shared nan eager extremity of increasing Beautycounter's yearly income from $400 cardinal to $1 billion, culminating successful a nationalist offering.

Prior to nan acquisition, Renfrew had successfully built and sold a wedding e-commerce tract from nan crushed up, but decided to travel her existent passion of popularizing 'clean' beauty and create products without harsh chemicals and unnecessary additives successful favour of minimal ingredients.

Renfrew cultivated a passionate organization of promoters, chiefly women, who enthusiastically dispersed nan connection astir Beautycounter to their loved ones. 

These promoters not only championed nan brand's sweetener scrubs, cleansers, and creams, but besides embraced nan opportunity to build their ain income teams. By recruiting others, they earned a committee connected each income wrong their network.

This strategy proved highly successful. At its peak, Beautycounter boasted a unit of 60,000 sellers, initially called consultants and later transitioned to 'advocates' nether Carlyle's ownership. 

Hill exemplifies nan powerfulness of this approach. Having joined Beautycounter conscionable weeks earlier welcoming her 5th kid successful 2016, she introduced nan marque to her family and adjacent friends. 

Over time, her individual efforts led to nan recruitment of 40 individuals, who successful move expanded nan web to 400 sellers, generating a six-figure yearly income.

In nan past, she had been recruited by different multilevel trading positions, but turned them down for nan aforesaid reasons nan different sellers became passionate astir Beautycounter - Renfrew's leadership, her unfastened speech pinch employees, and her defense for nontoxic ingredients successful each time products.

'It made it really easy arsenic good to not consciousness slimy astir offering personification a web trading opportunity, because I felt truthful passionately astir what we were doing and really we were doing it,' Hill told nan New York Times. 

Renfrew fostered a beardown consciousness of organization by treating nan independent sellers arsenic weighted members of her team. This loyalty extended to defense efforts, arsenic sellers joined Ms. Renfrew connected trips to Washington to lobby for stricter regulations successful nan individual attraction industry

By 2020, nan company, having achieved profitability nan twelvemonth prior, reached $395 cardinal successful sales, according to sources acquainted pinch nan company's finances.

As soon arsenic Carlyle bought nan brand, nan erstwhile devoted sellers started to time off and income plummeted. The patient blamed nan abrupt exodus of sellers connected nan pandemic, citing declining enthusiasm for working.

In a hopeless effort to support nan aforesaid consciousness of profitable comradery Renfrew had spent a decade building, Carlyle hired a caller main executive Marc Rey successful February 2022 pinch expertise successful mainstream beauty to prevention nan company.

Rey past restructured committee strategy for nan sellers, which would trim their commission, and complete redo of nan company's main trading constituent of 'clean' beauty.

By nan extremity of 2022, Renfrew departed from nan company, leaving her committee position. Carlyle, nan finance firm, provided further backing of $65 cardinal betwixt precocious 2022 and early 2023. With their support, Rey, nan caller CEO, invested complete $10 cardinal successful modernizing Beautycounter's exertion and brought successful consultants. 

He besides secured a income woody pinch Ulta, a awesome beauty retailer, to transportation Beautycounter products.

Despite these efforts and a 14% summation successful wide prestige beauty merchandise income successful 2022, Beautycounter's income continued to decline. This led to Rey's resignation successful May 2023.

Fast guardant to nan extremity of 2023, Carlyle handed nan business complete to its lenders, Bank of America and JPMorgan Chase, which would beryllium successful complaint of trading what was left. For Carlyle, that meant efficaciously giving up connected a $700 cardinal investment, valuing it astatine zero.

Renfrew bought nan authorities to nan Beautycounter sanction and different sets from its lenders for millions of dollars, but shocked sellers erstwhile she announced it would return her months to get nan institution up and moving again.