Welcome back to Full Coverage. Thanks for reading today.
This week my notebook was filled with conversations, comments and group chats on the tough state of beauty heading into 2026. Sure, major companies are moderating their growth and seeing bumps in their share prices, but they’re also largely in the process of turning around their businesses. Meanwhile, indies continue to languish — but not if a huge US-based beauty retailer can help it.
In this edition, you’ll get
- My thoughts on Ulta Beauty’s big brand building exercise
- A radical proposal for conglomerate consolidation
- A candid conversation with Aavrani founder Rooshy Roy
Can Ulta Beauty Be a Brand Builder?
Late last week, I heard from a number of sources that an elite group of bankers and investors met with Ulta Beauty’s C-Suite in New York to talk all things brand building. Chief executive, Kecia Steelman, and the rest of the Ulta team gathered the group primarily to discuss how the retailer can zhuzh up its image and be thought of as more of a partner to young brands. (Ulta Beauty did not respond to requests for comment.)
For years, Ulta has struggled to shake the reputation that it’s not a place where independent beauty brands thrive. While Sephora has incubation success stories with Drunk Elephant, Tatcha, Supergoop and Glow Recipe, Ulta’s hits usually come after they’re already sold at Sephora. While their product curation remains strong, it is not as enviable as Sephora’s, a point that was hammered home when Puck reported that former Ulta associate Mikayla Nogueira had selected Sephora as her brand POV Beauty’s first brick and mortar partner for its upcoming retail debut.
Steelman has held the top job for just over a year, and she’s made a point to move quickly, from putting a focus on international expansion to launching the retailer’s first experiential consumer event Ulta Beauty World. After focusing on top-line brand-building initiatives, it makes sense that Steelman and her team of Lauren Brindley (chief merchandising officer), Kelly Mahoney (chief marketing officer) and Amiee Bayer-Thomas (chief retail officer) are turning their attention to better navigating brand mix and perception internally.
Because Ulta is a public company (versus part of one, like Sephora), I’ve always wondered if it can properly support indies when shareholders’ focus is primarily on profit. It’s the large companies (L’Oréal, Estée Lauder Companies, Shiseido) and their brands (Cerave, Estée Lauder and Nars) that drive volume and sales, which then ultimately underscore Ulta’s growth and value.
But Ulta has made inroads here with its independent K-beauty mix, which that it doggedly went after through multiple avenues: direct brand partnerships, consulting agencies and distributors. (It was the first to sign the growing K-beauty behemoth Medicube, which also launches into Sephora this week.) It has to treat the rest of its new brand assortment with the same commitment.
For newer brands, it’s Ulta’s sheer size — roughly 1,500 stores — that is the issue. One source told me while it is an exclusive partner of the retailer, it questioned how many doors it realistically could be in to reach an inflection point in sales. Other independent brands aren’t nearly as well capitalised as, say, Kosé-owned Tarte or Selena Gomez’s Rare Beauty. While a wave of indies like Live Tinted and Beautystat launched with the retailer just a few years ago to varying results, I’m interested to see what a 2026-born, Ulta-built brand looks like. I suspect we’ll see some examples emerge soon.
How Can Anybody Compete with L’Oréal?
It started with a chart.
Last week while editing Brennan Kilbane’s very well-reported story, Drunk Elephant Isn’t Shiseido’s Only Problem, I reviewed a chart in the piece called “The New Beauty World Order” which intended to show that younger, nimbler Korean conglomerates including APR and Goodai had over taken the Japanese conglomerate in size. But that wasn’t the only thing I saw. I was struck by just how large L’Oréal’s market capitalisation is. So struck that I decided to make another chart.
As you can see here, at $246.7 billion, even L’Oréal has to contend with even bigger competitors like LVMH and Procter & Gamble, but the latter two aren’t pure-play beauty companies. The second biggest beauty conglomerate to show up on this list after L’Oréal was Estée Lauder at $38 billion, which came in well after Unilever.
Even though L’Oréal’s growth has slowed in recent quarters, it still reported a 6 percent sales uptick in recent results to $13.4 billion. Its recent moves also seem to suggest that it’s future-proofing itself against changing consumer dynamics — and I’m not simply talking about the Kering deal. From acquiring a stake in SkinSpirit, a medical aesthetics and skincare clinic chain last year, to upping its ownership in pharmaceutical company Galderma and launching ingestibles via Vichy, L’Oréal is preparing for a time when shoppers significantly reduce their time looking for hope in a jar.
There is no doubt in my mind that L’Oréal will continue to get bigger, but where does that leave smaller companies, like Coty, which is already losing the Gucci licence to L’Oréal, or the family-owned corporations like Lauder or Puig?
One answer is consolidation.
One beauty insider reminded me that L’Oréal already has a lock on M&A activity, buying brands across its mandates. It also has a first look at virtually every line, and the cash to execute deals; Lauder and Shiseido don’t have that luxury right now. Though those two have little overlap, Coty’s fragrance business could be advantageous to any number of players including Lauder or Puig — and these kinds of mergers can happen quickly, evidenced by Kimberly Clark picking up Kenvue just two months after US Health and Human Services head Robert F. Kennedy erroneously linked Tylenol to autism.
Consolidation is happening across the beauty value chain (see more on that below), so why couldn’t it happen at its highest ranks? It might just have to if the market remains cool and any competitor wants to go head to head with L’Oréal.
A Chat With Aavrani’s Rooshy Roy
In the midst of reporting on LVMH last week, I got word that Ayurvedic skincare and hair-care label Aavrani had quietly been sold to a private equity shop. At a time when independent brands are struggling to fundraise or shuttering, I called up founder Rooshy Roy to discuss her decision to sell.
Priya Rao: Aavrani recently launched in Sephora, debuted hair care and partnered with Lilly Singh — the brand seemed so much bigger than it was. Why did you decide to sell?
Rooshy Roy: Since I first started working on [Aavrani] in 2017, the opportunity is just so different from what it was. It ended up coming down to me stepping back and reevaluating everything. If I could opt back into this game [now in 2025], would I actually do it had it not been for all these years of time, money, effort? The answer was no. I made a very strong decision to try to land this plane in the best way possible, and for me the ideal situation was for the brand to live on for the customer base that we had cultivated.
Priya: Who did you sell to?
Rooshy: It’s a new company that has been basically consolidating omnichannel consumer brands. They realized the current dynamic isn’t working anymore and that just like [Aavrani], there are a lot of brands that are out here trying to do everything. Their thesis is around consolidating the back-end ops while allowing the front-end brands to remain independent. They have had success doing this for a few years and so we fit really nicely into that. [The name of the private equity firm and further details will be shared at the end of the month.]
Priya: You were a skincare brand that pivoted to hair care around the time you launched in Sephora — can you tell me about that?
Rooshy: There was a certain idea that [Sephora is] this brand builder and the idea was to try to capture that kind of ethos with them. But by the time we launched with them [in 2024] they weren’t really doing that anymore. I almost see what they’re doing like a VC firm where they take on a lot of small brands and wait to back the ones that are doing well, but the onus is on you to knock it out of the gate. It’s a vicious cycle where early success begets success, but in the first week that you haven’t grown from the prior week it’s like, “What’s going on?”
Priya: How sustainable was that?
Rooshy: It was such an expensive partnership that unless you are growing at an extreme rate — even higher on your DTC or other more profitable channels — you can’t afford the Sephora partnership for very long. I needed to prove that I’m a brand worth backing with Sephora, but I have such limited resources: I’m having to allocate all of that to Sephora, which doesn’t leave much room to invest in my DTC or Amazon. Meanwhile, those are the channels that would enable me to afford the Sephora partnership.
Priya: How much money did you raise and how many times?
Rooshy: I raised just over $15 million, and how many times is a funny question because you’re always fundraising. Whether or not you’re actually taking a check and depositing it, you are always taking meetings, navigating investor relations, fostering those relationships. Our Series A was $7 million in 2022 and that was to grow in retail, expand into hair care and bring on more brand ambassadors, including Lilly Singh. Even after that, I raised an extension of $3 million in 2023. 40 percent minimum of my time, effort, and energy went towards either fundraising or investor relations, which makes for a very challenging dynamic when you’re trying to do everything else.
Priya: You said having your son last year was your a-ha moment, in what way?
Rooshy: I [needed] to get this business profitable, not just to sustain itself but in order to sell it. I had to let go of a bunch of my team as well. I needed more support, but I couldn’t afford it.
Priya: People think launching a beauty business is very sexy. What do you think the reality is?
Rooshy: The reasons why DTC beauty was so disruptive in the 2010s, those reasons don’t exist anymore today. You need a lot of marketing, funding and resources to break through that noise, and now that people are being pushed back into retail, it’s all coming back full circle. I don’t see the same opportunity unless you have a ton of funding and resources to make it possible just like you would have needed pre-2010.
It’s never been easier to create a brand, but then it’s never been harder to stick around because the ease is a signal that we flooded the market. Even when someone buys and loves your product one time, that’s still not enough to get them to buy your product a second time — because in that period, six other brands have launched with a new version of what you created.
This conversation has been edited for length and clarity.
What I’m Reading
Side parts are apparently cool again. [The New York Times]
20-year-old Clavicular — otherwise known as Braden Peters — has become the face of the looksmaxxing movement. [The New York Times]
Fake AI influencers are making real money. [The Business of Beauty]
Start-ups offering body scans and MRIs are entering the wellness space. But should healthcare be a luxury product? [The Business of Beauty]
Pharma is having its own “Napster” moment, as telehealth firms shilling affordable GLP-1s reshape the way Americans shop for drugs. [The Wall Street Journal]
Thanks, y’all,
Priya
