Feelunique & Online Beauty Retail
Founder of Feelunique
inpractise.com/articles/feelunique-and-uk-online-beauty-retail
Feelunique
Why is this company interesting?
Feelunique is one of Europe's largest pure-play beauty retailers and was purchased for £132m by Sephora, owned by LVMH, in 2021. Feelunique forecasted ~£100m revenue in 2021 with a gross margin of 27-28% and negative £3m EBITDA in 2020. The company sells thousands of products from over 300 premium beauty suppliers, operates the 2nd largest beauty box subscription service in Europe, and has zero private label offering today.
We're studying Feelunique to gain insight into the opportunity for the two listed pure-play beauty retailers: Adore Beauty and THG Beauty. Adore Beauty is an Australian ecommerce retailer with attractive economics and a long growth runway ahead and THG is spinning out the £1bn Beauty division in 2022. Adore's LTV / CAC return is over 6x in Year 4 and revenue is growing ~30% and THG Beauty is growing at 50%+.
We believe beauty is an attractive category to sell online due to favourable product dimensions, high-value-to-weight ratio, and high repeat rates due to the intimate nature of the category.
Feelunique & Online Beauty Retail(September 7, 2021)
Aaron Chatterley
Founder of Feelunique
Aaron is the founder of Feelunique, one of Europe's largest pure-play online beauty retailers. Aaron founded feelunique.com in 2005 and has scaled the business to generate around £100m in revenue selling thousands of brands. In 2021, Sephora agreed to purchase feelunique in a bid to finally enter the UK beauty market.
In Practise Notes
- Beauty seems to be a great category for selling online. Low weight to value is good for shipping unit costs. Intimate products make it hard to return and easier to build brand loyalty. Plus, there is a unique chance to create an online community which drives loyalty and conversion.
- Historically, selective distribution agreements between beauty brands and retailers meant that the retailer had to own stores before being supplied by top brands. How might this change as ecommerce penetration increases?
- This section highlights how powerful the large beauty brands like EL, LVMH, and L'Oreal are.
- We believe beauty is a unique category to leverage editorial content and community-type features to drive loyalty and retention.
Interview Transcript
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