Rundown: Beauty sales slow down, retailers late on vendor bills & food startup drama

04/06/24 • 33 min

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On this week's Modern Retail Rundown: Ulta's latest performance shows that beauty sales may finally be decelerating. Retailers like Express, Peloton and Saks have reportedly been late on paying their vendors -- indicating cash flow issues. Finally, there was drama in the food startup space as Momofuku gets litigious with competitors.

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'It's really about quality over quantity': Pattern Brands' Suze Dowling on the new roll-up brand playbook

It's been a tough few years for roll-up companies, but Pattern Brands seems to have bucked the trend.

The company -- which began as design agency Gin Lane and evolved into a portfolio of DTC brands including Open Spaces, Onsen and Gir -- raised a $25 million Series B in 2022 -- and has been slowly building out its portfolio ever since.

While other roll-up players like Thrasio and Win Brands Group have faced major headwinds, Pattern has continued chugging along. Its co-founder and chief business officer Suze Dowling, who joined the Modern Retail Podcast this week, attributes this to the company's focus on its core consumer.

"If you're working across seven brands in a portfolio, it is helpful to try and find what is the grounding force," Dowling said.

This shopper is internally dubbed "Mia," and all of Pattern's brands -- including towel company Onsen and kitchen accessory maker Gir -- target "those micro-moments of [Mia's] day, and how can we make them just a little bit more special," Dowling said.

By having that focus on one type of shopper, Dowling said that Pattern has been able to remain grounded and focused. "I would challenge [the idea that] for some of the Amazon aggregators -- that also had 50 brands, 100 brands -- that they were able to find those same synergies in how they operated," she said.

For now, Pattern has been focused on finding the right brands to buy -- as well as finding the best modes for growth. "I'm very excited and kind of gung-ho on trying to make sure we build some mass retail partnerships over the next 12 to 18 months," Dowling said.

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CEO Susan Kim on how Kopari was at the forefront of the clean beauty trend

Every beauty startup these days describes itself as a clean beauty brand, but skin-care brand Kopari was ahead of the curve.

"It's definitely table stakes now," said CEO Susan Kim.

But, it wasn't always that way. "The way I think about clean is that back in 2015, it was a differentiator," Kim said. And that's what helped Kopari -- which makes products including cleansers, moisturizers, sunscreen and deodorant -- grow into the profitable brand it is today, with revenue growing 45% in 2023.

Kim joined this week's Modern Retail Podcast and spoke about the company's rise, as well as how the company has evolved since she took on the role of CEO in 2020.

Before she joined the brand, she said, "I remember thinking: I have to keep tabs on this brand."

Cut to today and Kopari has launched into new areas like sunscreen, and has diversified its marketing to keep customer acquisition costs low. The company invests in performance media, earned media as well as other higher-funnel brand campaigns. "It's the harmony of all of those elements [coming] together that makes for a very efficient CAC," she said.

Another important differentiator for Kopari has been speaking directly to its customers. The company has a Slack channel, for example, where it frequently talks with its people who use the products every day. "That's instantaneous feedback that's consumer-centric," she said.

But beyond the feedback, Kim said these types of initiatives help the brand seem more human. "It allows us to have a community," she said. "That's really what it's about."