The ugly truth about young beauty brands’ business model

to feel pretty. Over the past ten years Americans have spent more than $500bn on beauty products. By 2024 the Chinese are expected to splurge more than $100bn a year. In the past most of that would have gone to cosmetics conglomerates, such as L’Oréal and Estée Lauder, or to consumer-products giants like Unilever, selling every imaginable tincture to make everything from toenails to tresses more fetching. But in recent years fresh-faced newcomers, often more specialised and more digital, have entered the fray. Now the upstarts are showing some wrinkles, as their business models are tested, investors lose patience with red ink and the incumbents up their game. The sales of Glossier, a hot American make-up firm most recently valued at $1.8bn, fell by a quarter in 2021. The firm has laid off a third of its staff; its long-rumoured initial public offering () may be the subject of rumours for a while yet. Olaplex, a haircare firm that went public last September in a blockbuster that valued it at over $15bn, has since shed half its market capitalisation. Do the beauty challengers need to undergo their own metamorphosis?