Beauty: Beauty’s Hottest New Trend: The Founder Buyback

Why it is the topic trending:

• Significant Founder Buyback: Huda Kattan, a major figure in the beauty industry, regaining majority ownership of her namesake brand is a noteworthy event, especially considering the involvement of private equity firms.

• Broader Trend of Founder Buybacks: The article positions this move within a larger trend of founders repurchasing their companies, indicating a potential shift in the dynamics of the beauty M&A market.

• Evolution of Influencer-Founded Brands: Huda Beauty's journey from an influencer-launched brand to one undergoing a founder buyback reflects the evolving landscape of the beauty industry, where influencer power and brand ownership are being re-evaluated.

• Success and Challenges of Early Beauty Moguls: The article touches upon the varying trajectories of early influencer-founded brands like Kylie Cosmetics and Anastasia Beverly Hills, adding context to Huda Beauty's current position.

• Reflection on Brand Vision and Control: The move underscores the importance of a founder's vision and the potential benefits of having the original driver back in control, especially when needing to course-correct.

Overview:

The article discusses the trend of founder buybacks in the beauty industry, highlighting Huda Kattan's recent regaining of majority ownership of Huda Beauty by buying back shares from private equity firm TSG Consumer Partners. This follows her sister Mona Kattan's purchase of her co-founded fragrance brand Kayali. The article contextualizes this move within the evolution of influencer-founded beauty brands and notes the mixed success of such ventures over the past decade. It suggests that Huda's return to majority ownership signifies a focus on the core cosmetics business and sends a message about the importance of the founder's vision for brand direction, particularly when needing to adapt in a competitive market.

Detailed Findings:

• Huda Kattan Regains Majority Ownership: Huda Kattan repurchased the minority stake in Huda Beauty held by TSG Consumer Partners since 2017.

• Sister's Transaction Facilitated Buyback: Huda's sister Mona Kattan purchased Kayali, co-founded with PE firm General Atlantic, which provided funding for Huda Beauty's buyback.

• Beauty M&A Market Activity: This follows other significant beauty M&A activities in 2025, including E.l.f. Beauty's acquisition of Rhode and Church & Dwight's purchase of Touchland.

• Huda Beauty's Launch in 2013: The brand emerged during the peak of the celebrity makeup moment, alongside brands from Kylie Jenner and Rihanna.

• Mixed Success of Early Influencer Brands: Some early brands like Charlotte Tilbury flourished through acquisitions, while others lost momentum.

• Rise of New Celebrity Founders: A new generation of celebrity-founded brands like Rhode (Hailey Bieber) and Rare Beauty (Selena Gomez) has seen success with direct customer relationships and strong operational teams.

• Huda Kattan's Continued Relevance: Despite 12 years in business, Huda Kattan maintains significant online influence with a large social media following and high engagement rates.

• Focus on Core Cosmetics Business: Huda Kattan aims to "hyperfocus" on Huda Beauty's cosmetics, phasing out less successful skincare forays (Wishful and Glowish).

• Risks and Challenges of Founder Buybacks: The article notes examples of founder buybacks that didn't immediately lead to success, such as Kim Kardashian's Skkn and Beautycounter.

• TSG Consumer Partners' Investment Strategy: TSG is described as a short-term investor, often taking minority stakes and cashing out through acquisitions or IPOs.

• Importance of Founder's Vision: The article suggests that a brand's founder often has a unique vision that is crucial for navigating market challenges and maintaining relevance.

Key success factors of product (trend):

In this context, the "product" is the founder buyback trend in the beauty industry. Its potential success factors include:

• Founder's Vision and Passion: The original founder often has a deep understanding and passion for the brand that can be crucial for its revival or future direction.

• Brand Knowledge and Expertise: Founders possess intimate knowledge of the brand's history, values, and target audience.

• Ability to Course-Correct Effectively: When a brand needs to adapt to market changes, the founder might be best positioned to make strategic decisions aligned with the brand's core identity.

• Reconnection with Core Customer Base: A founder's return can resonate strongly with loyal customers who identified with the original vision.

• Potential for Renewed Authenticity: In a market saturated with celebrity and influencer brands, the return of an original founder can signal a renewed focus on authenticity.

Key Takeaway:

Huda Kattan regaining majority ownership of Huda Beauty highlights a growing trend in the beauty industry of founders buying back their companies, suggesting a move towards placing the original visionaries back at the helm, particularly when brands need to adapt to market shifts and reconnect with their core identity and customer base.

Main trend:

The main trend is the Rise of Founder Buybacks in the Beauty Industry, indicating a re-evaluation of brand ownership and control, often with the aim of revitalizing or refocusing the business under the guidance of its original visionary.

Description of the trend (please name it):

Beauty Brand Founder Reclamation: This trend describes the increasing instances of original founders of beauty brands repurchasing significant stakes in their companies, often from private equity firms or larger conglomerates, to regain control and steer the brand's future direction.

What is consumer motivation:

This article doesn't directly address consumer motivation regarding founder buybacks, but we can infer:

• Potential for More Authentic Products: Consumers who connect with the founder's original vision might hope that a buyback will lead to more authentic and high-quality products.

• Trust in the Original Visionary: Consumers who initially supported the brand due to the founder's influence might be encouraged by their return to leadership.

• Desire for Brand Consistency: A founder's consistent vision might lead to a more stable and reliable brand experience.

What is driving trend:

• Founder's Desire for Control: Original founders may feel a strong connection to their brands and want to regain control over their creative direction and strategic decisions.

• Perceived Missteps Under External Ownership: Founders might believe that the brand has strayed from its core identity or made missteps under the influence of investors.

• Market Correction and Re-evaluation of Valuations: The evolving beauty market might present opportunities for founders to repurchase stakes at more favorable valuations.

• Importance of Founder's Persona: In influencer-founded brands, the founder's personal brand is often deeply intertwined with the company's success, making their leadership crucial.

What is motivation beyond the trend:

• Brand Legacy and Vision: Founders are often deeply invested in the long-term legacy and vision of their brands.

• Personal and Professional Fulfillment: Regaining control can be a matter of personal and professional satisfaction for the founder.

Description of consumers article is referring to:

The article refers to consumers of Huda Beauty and the wider beauty industry, particularly those who:

• Initially Connected with Huda Kattan: These consumers were drawn to her personal brand, makeup looks, and product reviews.

• Follow Beauty Trends and Influencers: They are likely aware of the evolution of the beauty market and the rise of new brands.

• Have Seen the Brand Evolve Over Time: They may have noticed changes in the brand since the private equity investment.

• Appreciate Authenticity in Brands: They might value the return of the original founder as a sign of renewed authenticity.

• Age: While not explicitly stated, the consumers who initially connected with Huda Kattan as a beauty vlogger are likely to be in the Millennial (25-40 years old in 2025) and Gen Z (18-24 years old in 2025) age ranges, given the timeframe of her rise to prominence. However, the current consumer base of Huda Beauty could also include older demographics who have come to know the brand over the years.

• Gender: The primary consumer base for Huda Beauty, being a makeup brand, is likely to be female-identifying. However, the beauty industry is becoming increasingly inclusive, and the brand may also appeal to individuals of other genders who use makeup.

• Income: Huda Beauty is positioned as a mid-range to high-end makeup brand within the broader beauty market. Therefore, its target consumers likely have a mid-to-upper level of disposable income to spend on cosmetics.

• Lifestyle: These consumers are likely interested in beauty trends, makeup techniques, and self-expression through cosmetics. They are probably active on social media platforms like Instagram, YouTube, and potentially TikTok, where they follow beauty influencers and engage with beauty brands. They appreciate quality makeup products and are often influenced by online reviews and recommendations. They may also be interested in the story and personality behind a brand, making the founder's involvement significant to their purchasing decisions.

Conclusions:

The trend of founder buybacks, exemplified by Huda Kattan's regaining majority ownership of Huda Beauty, suggests a potential shift in the beauty industry towards valuing founder-led brands and the original vision behind them. This move highlights the complexities of brand growth under external investment and the compelling reasons for founders to reclaim control to steer their companies forward in a dynamic and competitive market.

Implications for brands:

• For Brands Considering External Investment: Founders should carefully consider the long-term implications for their brand vision and potential for future buybacks.

• For Private Equity Firms: The article suggests that their investment horizon and goals might not always align with a founder's long-term vision, potentially leading to buybacks.

• For Brands Underperforming After Founder Exit: Founder buybacks could be a strategy to revitalize a brand that has lost its way.

Implication for society:

• Emphasis on Entrepreneurial Vision: The trend highlights the importance and lasting impact of the original founder's entrepreneurial vision.

Implications for consumers:

• Potential for Brands to Reconnect with Original Values: Consumers might see a renewed focus on the brand's core values and product quality under founder leadership.

• Stability in Brand Direction: Founder-led companies might offer more consistent brand experiences over time.

Implication for Future:

• Likely More Founder Buybacks in the Beauty Sector: Given the trend, we might see more founders seeking to regain control of their brands.

• Re-evaluation of PE Investment in Influencer Brands: The article hints at the potential for different outcomes compared to traditional brand investments.

Consumer Trend (name, detailed description):

The Value of Founder-Led Brands: Consumers increasingly value brands where the original founder remains deeply involved and influential, often perceiving these brands as more authentic, passionate, and true to their core mission.

Consumer Sub Trend (name, detailed description):

Seeking Authenticity in Beauty: With a proliferation of celebrity and influencer-founded brands, consumers are increasingly discerning and seeking out beauty brands that feel genuinely connected to their founder's vision and expertise.

Big Social Trend (name, detailed description):

The Power of Entrepreneurial Vision: Society often celebrates and values the vision and drive of entrepreneurs who create successful businesses. Founder buybacks can be seen as a manifestation of this valuing of entrepreneurial leadership.

Worldwide Social Trend (name, detailed description):

Shifting Dynamics of Brand Ownership and Investment: The relationship between founders, investors, and brand ownership is a dynamic one globally, and the trend of buybacks reflects a potential rebalancing of these forces.

Social Drive (name, detailed description):

The Desire for Authenticity and Connection to Vision: Consumers are often drawn to brands that have a clear and authentic vision, and the presence of the original founder can strengthen this connection.

Learnings for brands to use in 2025:

• Maintain Strong Founder Involvement: Even with external investment, maintaining a significant role for the original founder can be beneficial for brand identity.

• Understand the Long-Term Goals of Founders and Investors: Ensure alignment between the founder's vision and the investor's objectives.

Strategy Recommendations for brands to follow in 2025:

• Founders Considering Selling Stakes: Carefully consider the long-term implications for brand control and future options like buybacks.

• Investors in Founder-Led Brands: Recognize the importance of the founder's ongoing influence and vision for the brand's success.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it:

The emerging trend of beauty brand founder reclamation suggests that in 2025, both founders and investors in beauty brands should carefully consider the long-term implications of ownership and leadership by prioritizing the founder's vision and recognizing the potential for strategic buybacks to ensure the brand's continued relevance and success in a competitive market.

Final Note:

• Core Trend: Beauty Brand Founder Reclamation: Founders are buying back their beauty brands.

• Core Strategy: Prioritize Founder's Vision and Long-Term Goals: Ensure alignment between founders and investors.

• Core Industry Trend: Evolving Dynamics of Brand Ownership and Investment: The beauty M&A landscape is shifting.

• Core Consumer Motivation: Seeking Authenticity and Connection to Vision: Consumers value brands led by their original founders.

Final Conclusion:

Huda Kattan's move to regain majority ownership of Huda Beauty underscores a significant theme in the beauty industry: the enduring value of the founder's vision. As the market continues to evolve and new brands emerge, the return of original founders like Huda suggests a potential strategy for brands to reconnect with their core identity, navigate challenges, and ensure long-term success in a dynamic and competitive landscape. This trend prompts a re-evaluation of traditional investment models and highlights the crucial role that a founder's passion and expertise can play in the enduring appeal of a beauty brand.

Core Trend Detailed:

Beauty Brand Founder Reclamation describes a notable trend within the beauty industry where the original individuals who conceptualized and established a brand are making moves to regain significant ownership and leadership control over their companies. This often involves repurchasing stakes previously sold to private equity firms or larger corporations. This trend indicates a potential shift in power dynamics within the beauty market, suggesting that the unique vision, passion, and deep understanding of the brand by its founder are being recognized as crucial elements for long-term success and relevance, especially in navigating an increasingly competitive and rapidly evolving landscape.

Key Characteristics of the Core trend:

• Founders Regaining Ownership: The primary characteristic is the act of the original founder(s) buying back shares or a majority stake in their company.

• Private Equity Involvement Often Precedes Buyback: This trend frequently follows an initial investment or acquisition by private equity firms.

• Desire for Renewed Control: Founders are often motivated by a desire to steer the brand's direction and maintain its original vision.

• Strategic Move for Brand Revitalization: Buybacks can be a strategic maneuver to revitalize a brand that might have strayed from its core identity.

• Signal of Founder's Enduring Relevance: The ability and willingness of founders to buy back their brands highlight their continued influence and dedication.

Market and Cultural Signals Supporting the Trend:

• Huda Kattan's Buyback of Huda Beauty: This specific event is the central example driving the current discussion and highlighting the trend.

• Mona Kattan's Purchase of Kayali: This related transaction provided the financial means for Huda's buyback, indicating a coordinated effort.

• Examples of Other Founder Buybacks (Skkn by Kim Kardashian, Beautycounter): The article references other instances of founders reclaiming their brands, suggesting a broader pattern.

• Short-Term Investment Strategies of PE Firms: The article notes that PE firms like TSG often have a shorter investment horizon, which can eventually lead to a founder repurchase.

• Importance of Founder's Vision in Competitive Market: The article emphasizes that the unique vision of the founder can be crucial for a beauty brand to stand out in a crowded market.

How the Trend Is Changing Consumer Behavior:

• Potential for Increased Consumer Trust: Consumers who initially connected with the founder's vision might feel a stronger sense of trust and authenticity with the founder back in control.

• Expectation of More Focused Brand Direction: Consumers might anticipate a clearer and more consistent brand identity and product strategy with the founder at the helm.

• Renewed Interest in Established Brands: Founder buybacks could reignite interest in brands that have been around for a while.

Implications Across the Ecosystem:

• For Brands and CPGs:

  • Founders: Should consider buyback options as a way to regain control and steer their brand's future.

  • Private Equity Firms: Might need to consider the possibility of founders wanting to repurchase their stakes down the line.

• For Retailers:

  • May see renewed interest in brands that have undergone a founder buyback.

• For Consumers:

  • Potentially benefit from a more focused and authentic brand experience.

Strategic Forecast:

• The trend of Beauty Brand Founder Reclamation is likely to continue as founders seek to maintain control and guide their brands in an increasingly competitive market.

• We might see more founders strategically selling minority stakes with the intention of buying them back later.

Areas of innovation (based on discovered trend):

• Financial Instruments for Founder Buybacks: Development of financial tools or strategies specifically designed to facilitate founder repurchases.

• Legal Frameworks for Founder Protection: Potential for new legal or investment structures that give founders more long-term control and options for regaining ownership.

Final Thought (summary):

The trend of Beauty Brand Founder Reclamation, exemplified by Huda Kattan's return to majority ownership of Huda Beauty, underscores a significant recognition within the industry of the enduring value and impact of the original founder's vision. This move suggests a potential rebalancing of power in the beauty market, highlighting the crucial role that founder-led direction can play in navigating market complexities and ensuring the continued relevance and success of a brand.

Source: https://www.businessoffashion.com/articles/beauty/huda-kattan-brand-buyback-tsg-consumer-partners-june-2025/