Cover FX has been acquired by AS Beauty.
AS Beauty also owns Julep, Laura Geller and Mally Beauty. Terms of the deal were not disclosed.
Cover FX, founded in 1999 and primarily known for its complexion products, has been backed by L Catterton since 2011.
The company explored a sale process shortly after makeup‘s boom started to dwindle. Back then, in 2018, CoverFX was said to be projecting about $65 million in gross sales. Now industry sources said the brand’s retail sales are hovering at around $20 million.
AS Beauty has acquired Cover FX with a plan to kick-start growth, said Ralph Azrak, principal at AS Beauty. He said the brand has “deep-rooted heritage” and “was never really in the spotlight.”
“For Cover FX, there’s this opportunity to tell a story that no one has heard yet,” Azrak said. “I’m super pumped to roll up our sleeves and get dirty and turn it around.”
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He described the state of the Cover FX business as “stagnant” and said operations will be taken over primarily by the AS Beauty team. The company will look to promote bestselling products and potentially cut underperformers, he said.
“Identity wise, it just was lost,” Azrak said. “There was no juice, there was nothing pumped in to really accelerate for the future.”
To boost growth, the AS Beauty team plans to bring Cover FX into its “ecosystem,” which includes a dedicated Amazon team of four people.
“We’re able to bring in a brand, roll up our sleeves, dissect it, understand the history of the brand, understand why it was made, what’s the purpose of the brand, who it speaks to, etc. Then we’re able to move very quickly to double down on the vision,” Azrak said.
CoverFX exited Sephora roughly a year ago, and is still sold with Ulta. Azrak said he sees a big opportunity on the brand’s website, as well as with Amazon and potentially QVC.
AS Beauty has plans to double its Amazon team in the next 12 months, Azrak said. “Day in, day out, we breathe, eat, sleep Amazon — operations, marketing, merchandising, advertising, we’re producing content all day long,” he said.
That formula has worked well for AS Beauty’s other brands, Azrak said, and the company saw sales triple on Amazon between 2020 and 2021.
For Cover FX, Azrak said he expects sales to potentially grow by 20 percent this year and double that in 2023, depending on supply chain issues. “We have to weigh a lot of factors here, but we definitely think we’ll hit the ground running,” Azrak said.
“AS Beauty is kind of an outlier in the beauty space,” Azrak explained. “These corporates — Estée Lauder, L’Oréal, etc. — that look to purchase the next shiny penny, whereas at AS Beauty, we’re a lot more cautious, we’re a lot more opportunist. We like to find brands that are not number one in the spotlight and pay crazy multiples. We like to find brands that just need help and we see value in those brands.”
AS Beauty’s first beauty brands were Julep and Laura Geller, which it purchased out of bankruptcy. It acquired Mally Beauty in 2021.
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