Melbourne online beauty retailer Adore Beauty has bought back the 25 percent stake it sold to Woolworths less than two years ago, with founder Kate Morris saying “our respective goals and priorities were no longer as aligned going forward as they were at the start”.
The supermarket chain bought into the ecommerce business in May 2015 for an undisclosed sum; since then, Morris said the business has grown by 125 percent, with Woolworths’ buy in allowing Adore Beauty to invest in more stock, people, technology, and marketing.
Morris was unable to disclose the details of the buy back or the process, but said she had no regrets about the decision to partner with Woolworths rather than going down the venture capital route two years ago.
“We have been able to achieve the goals we set out to achieve in terms of business growth and improving the customer experience and for us, having much more impact on the beauty industry in general,” she said.
“I found it a really valuable learning experience to work with these experienced retail professionals and I feel like we actually learned a huge amount from it…to work with a big corporate like that and the amount of rigour and governance required, doing everything properly rather than the fast and loose way you’re used to as a startup, we were kind of at the stage where we needed that.”
Moving forward independently, Morris said, will allow the business to explore new opportunities for growth.
“There are some things that having a large, strategic investor can preclude or rule you out of a little bit and we felt it was best to be open to new opportunities going forward,” she said.
A key opportunity is international growth. After announcing its big foray into China last year with the launch of a storefront on Alibaba’s Tmall platform last year, Adore Beauty quietly shut it down after six months and moved to Pitney Bowes solution Borderfree Retail, an end-to-end platform allowing global customers to access a localised version of a store.
“In the interests of failing fast and failing cheap, we decided to put [Tmall] on hold, as we became aware quite quickly that it was going to require more time and resources than perhaps we were prepared to allocate to it,” Morris said.
The company found that “some experiences are difficult to translate”, Morris said, with differences in the sophistication of shoppers as beauty consumers and which brands resonated, with Adore Beauty finding China a price-focused market.
The Borderfree Retail platform will allow the company to test new markets and find what resonates, with English-speaking markets including New Zealand, Singapore, the US, and the UK responding well so far.
The decision came as Adore Beauty’s Australian activity began to grow faster than it had projected. The company reports it has added 50,000 customers over the past six months and expanded its range to 12,000 products to include both professional and affordable brands.
Morris said, “It’s beauty’s time in the sun. Consumers are embracing beauty as self expression in a way that maybe they weren’t 10 years ago, and I think the whole category has good momentum.”
Image: Kate Morris. Source: Supplied.