Glow Recipe: Setting the record straight on the sale, and what’s next

This article is part of our Vogue Business membership package. To enjoy unlimited access to our weekly Beauty Edit newsletter, which contains Member-only reporting and analysis, the Beauty Trend Tracker and Leadership Advice, sign up for Vogue Business membership here. Sarah Lee wants to set the record straight: Glow Recipe, the skincare brand she co-founded with Christine Chang in 2014, is not currently up for sale. News that Glow Recipe was mulling a deal was first reported by Bloomberg last August. The company was said to have $80 million in annual revenue in 2022 and was working with investment banking firm Goldman Sachs on a sale that could value it at $400 million to $500 million. Neither Glow Recipe nor Goldman Sachs commented at the time, and the founders have not spoken about their future plans in the time since. Now, Lee — who was in Paris last week for the first European iteration of Sephora’s beauty festival Sephoria, as well as Glow Recipe’s launch in France as part of its expansion in Europe — is ready to share more. She says there has been misinformation around the sale. The brand had preliminary conversations with selected companies, having received an influx of enquiries from potential buyers. However, they were “exploratory” and didn’t proceed any further, she tells Vogue Business. “We wanted to understand where the conversations could lead. Potentially [a sale] could mean accelerated growth and being able to launch in new markets with better infrastructure, expertise and experience. Some of those aspects were interesting to us,” Lee reflects. But, after those first meetings, both executives agreed that “it wasn’t the right time to go through the process, or to even begin it”. That wound up being the “best decision”, says Lee. Business, according to Lee, is “thriving”. The brand, which employs 55 people, brought in $150 million in retail sales in 2022, up from $93 million in 2021 and $45 million in 2020. Its treatments range (its most advanced skincare category, which includes serums and toners) is projected to bring in over $120 million in retail sales for 2023 — close to half of the total business. The decision to put a sale on pause had to do with the macro economy, explained Lee. “We want to make sure that the time is right and when we find the right partner that the valuation is right as well.” Having built strong loyalty through unique products, which can keep consumers spending even in a recession, and a demonstrated ability to grow sustainably, Glow Recipe has been identified by investors as among the hot beauty M&A targets. It has already had undisclosed investment from North Castle Partners, a private equity firm focused on consumer and lifestyle investments, which took a minority stake in January 2021 with a view to propelling Glow Recipe’s international growth. However, the brand still has opportunities to grow in new territories such as Europe and South America, and expand its distribution beyond its key partner, Sephora. Lee did not comment on the previously reported valuation, but said that “throughout the years we have shown that we’re truly differentiated in the market. What’s important for us is staying focused. We just did not want to be distracted.” More than K-beauty Lee and Chang first met while working for L’Oréal in Seoul in 2005. A few years later, both executives found themselves working at the group’s New York office and spent evenings bonding over sheet masks and glasses of wine at each other’s apartments. On spotting a gap in the skincare market for scientific formulas paired with accessible marketing and pricing, they were inspired to launch Glow Recipe. “We saw brands that were clinically efficacious but highly priced and more intimidating, and also brands that were more affordable, kitschy and colourful but not perceived as effective,” said Lee. “We wanted to combine the two worlds into one.” Initially, Glow Recipe sold both its own products as well as a selection of other Korean brands, but swiftly decided to focus on its own line after seeing strong customer interest. The brand focused on targeting many top skincare concerns with approachable fruit-based formulas and unique textures. It was also able to capitalise on the flourishing Korean wave, or hallyu, which introduced K-beauty ingredients, trends and practices to mainstream stores and consumers outside of the country, and popularised the concept of “glass skin” among Western consumers. Glow Recipe signed its first stockist — Sephora — in 2017, selling via the beauty specialist’s stores and e-commerce across North America. In 2018, Glow Recipe expanded into the UK via Cult Beauty and last year via Sephora. This October, it launched at Sephora in France ahead of a wider rollout across Europe. In less than a week, Glow Recipe is already Sephora’s top skincare seller in France, as well as in the US for September 2023, according to industry sources. The K-beauty boom peaked in 2019 and has lost some of its lustre in recent years. Competition has also increased from large players, such as Korea’s Amorepacific, which has been aggressively expanding its flagship brands Sulwhasoo, Laneige and Innisfree in the US and Europe, and American beauty giant The Estée Lauder Companies placing bigger bets on K-beauty. There are also savvy Korean retailers like Peach & Lily, a New York-based skincare company known for its glass skin refining serum, which is nearing $100 million in combined net sales with sister brand Peach Slices; and Joah Beauty, which was launched in 2018 by Kiss Products and imports K-beauty products to the US at accessible price points. Glow Recipe has transcended K-beauty status thanks to its identifiable hero products, which are essential at a time when consumers are pulling back on the notion of overabundance. Sephora’s global chief merchandising officer Priya Venkatesh compliments the brand’s unique positioning, strong ingredient story and educational approach. “Glow Recipe has successfully brought to market some amazing products that have really stood the test of time.” Serums are among the brand’s best selling category at Sephora. “Many of Glow Recipe’s products offer that covetable instant glow, while also delivering long-term benefits to improve skin health over time, which resonates with many of our clients,” says Venkatesh. An inclusive, social-first approach Beyond product efficacy, young consumers also want to feel seen and look for brands that are inclusive in their retail and marketing strategies, experts say. Glow Recipe does this by tapping into the desire of Gen Z customers to be their authentic selves. It was among the first beauty brands to avoid terms like flawless, poreless, ageless, anti-wrinkle, anti-aging and perfect across all touchpoints, in addition to not retouching images and encouraging the influencers it works with not to either. In 2022, it launched the Glow Gang ambassador programme; those selected can test products before launch, get site credits to stock up and interact with Lee and Chang, in exchange for posting monthly content and reviews on Instagram and TikTok. There are currently over 190 global Glow Gang members, and the plan is to recruit more in France and across Europe. “It was important for us to capture super fans of the brand and to give them insider access,” says Lee. Not only do these activations help to build engagement among its community, it also allows for transparent feedback, which can be used to improve product formulas, branding and more, she adds. “We wanted to encourage more organic content, which can be very difficult to achieve.” By empowering people to speak on their own terms, the message that is shared is “very authentic” rather than “something that is pushed out by the brand”. Glow Recipe’s inclusive, social-first approach helped it become the top skincare brand in terms of earned media value (EMV) in the US last year, at $82 million, up from third place in 2021 and fifth place in 2020, Tribe Dynamics data shows. (The social analytics firm annually tracks over 700 beauty brands online.) La Roche-Posay was in second place with $66.9 million EMV in 2022, while Tatcha came in third with $61.9 million. So far, for January to August 2023, Glow Recipe has maintained its top ranking, with over $77 million in EMV, coming ahead of Drunk Elephant's $74 million and Elemis’s $71 million year-to-date. The Glow Gang programme contributed over $10 million in EMV, according to Chang. “The brands that are the best-in-class create products that are worth talking about, as the vast majority of content is tied to hero products,” observes Conor Begley, co-founder of Tribe Dynamics and chief strategy officer at CreatorIQ. Glow Recipe stands out by investing in long-term sustainable relationships through evergreen programmes, he believes. “Influencer retention is the most predictive metric for EMV growth we have currently. [The brand] scored excellently here for multiple years running, which is a powerful reflection of their community building efforts.” It’s not just about constantly introducing new products either. In April, Glow Recipe held its first anonymous casting call and recruited 10 members of its own community, without ever seeing their name or face. They starred in out-of-home campaigns across North America, promoting its popular watermelon glow niacinamide dew drops rather than a new launch. “We’re constantly thinking of fresh ways to speak about our hero items,” says Lee. The focus now is on strengthening its global community and retail presence. “We’re launching in Mexico early next year, and are in talks with Brazil.” She adds: “We’re in a very select number of markets. For example, we’re not in China or India and those are huge markets down the road.” Would Glow Recipe have been as successful were it not for growing global interest in K-beauty? “I think everything led to where we are today,” says Lee. She asserts that her mission, along with Chang’s, remains the same, which is to combine clinically efficacious results with a sensorial and approachable experience. That duality did not coexist before and resonates globally regardless of the brand’s origins, she believes, as wellness and beauty become more closely intertwined. Glow Recipe would be open to considering a sale if a bid was made by the right partner “who understands the brand’s DNA, vision and philosophy”, says Lee. Maintaining its authenticity is crucial to success, she believes. “The core of our business is community and our growth has really been driven by that, as well as our innovation.” She continues: “It is the most important decision factor. Even if you feel like you need funding, if it’s not the right partner, it won’t last long. We’re being very thoughtful about it.” Kati Chitrakorn travelled to Paris as a guest of Glow Recipe. Comments, questions or feedback? Email us at feedback@voguebusiness.com.

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