Lime Crime Gets A Strategic Marketing Makeover

Summer was a season for beauty company acquisitions in 2018. TPG Capital bought a significant stake in Anastasia Beverly Hills in May. Pibiplast was acquired by L Catterton and Ambienta. Although Pibiplast is not a cosmetic company, it manufactures sustainable packaging products for makeup. In June, Unilever acquired 75 percent of Equilibra’s stake. For the first time in 15 years, Markwins Beauty Brands made an acquisition. It acquired Lorac Cosmetics. While these were all big events, the hottest event of the summer was Tengram Capital’s acquisition of Lime Crime. In recent years, Lime Crime became a trend-setting company because of its innovative and unique products.

 

 

Lime Crime: Personalized Beauty Products

 

Lime Crime sells vegan beauty products. It is a preferred company for people who care about animal welfare, and they know that they can trust Lime Crime because of how personally dedicated its key people are to adopting shelter animals and donating money to animal charities. In the past, Lime Crime designed lipstick duos that it sold in bundles. Each bundle had a catchy cat-themed name, and a large percentage of each sale went to a cat rescue in Los Angeles. However, the agency is not a typical rescue organization for domestic felines. It focuses only on feral cats, which are overpopulated in the Los Angeles metro area. The organization takes in and trains feral cats to be lovable domestic pets.

 

Lime Crime is also known for its highly pigmented colors that produce bold looks. Customers like the thick pigmentation since they do not have to cake on their makeup to get a vibrant effect. Many customers say that the makeup feels almost weightless. Lime Crime’s Diamond Crushers lip colors are also popular. They glitter and shine much brighter than most lip glosses. Also, Lime Crime is especially known for its Unicorn hair colors. When the mermaid hair trend emerged, Lime Crime was a leading company that helped many people achieve that trendy look. Although the company sells trendy makeup products, it encourages people to wear what they feel is right to them in the moment.

 

Lime Crime’s message is that beauty exists in every person and comes from freedom of expression. The brand echoes a strong and positive image of individuality. It is sold in several stores in the United States, and it is available online from the company’s main site. Also, the recent acquisition by Tengram was followed by an announcement of expansion. Lime Crime’s products are now permanently available at the famous Selfridges department store in the United Kingdom. In the past, it was only available in a handful of stores in England. Customers who do not live near a big city in the United Kingdom can still purchase Lime Crime’s products online.

 

former CEO and Founder of lime crime doe deere
Former Lime Crime CEO Doe Deere

Meet Tengram Capital

 

Tengram Capital is known for acquiring high-quality beauty brands. In November 2017, it bought a luxury skincare company called ReVive. While the details and sale numbers were not disclosed, ReVive earned about $15 million in sales in 2017. Tengram sold DevaCurl earlier that year for about $300 million. The company uses a traditional restructuring and growth strategy, and it has been in the beauty acquisition business for a long time. Its first investments took place in 2002 when it invested in Alba Botanic and Avalon Organics. Richard Gersten is a Tengram Capital partner, and he recently spoke about the company’s strategies in relation to the competitive beauty market.

 

 

Tengram Capital’s Solid Strategies

 

Gersten said that Tengram likes to work with founder-led companies. One of the reasons for this is because founders who are invested in their own brands often have strong or unique products. However, they lack the money or sophisticated strategies to take a brand to the next level. While many companies do top-down analyses to find trends, Tengram does not rely heavily on that strategy to find the right companies. Also, Tengram does not shy away from complicated deals. When it bought Revive, the company did not have a dedicated team of executives. ReVive depended on distribution in department stores then, and it had a strong list of attributes. Tengram saw the beauty company’s potential and helped it flourish.

 

With many new brands emerging, the beauty sector is increasing in competitiveness today. There are several barriers that new companies or aspiring startups face. However, there are not as many as there were about 10 years ago. At that time, entrepreneurs had to build their beauty brands traditionally. People still had to lease a storefront in most cases. As marketing tools evolved and innovative companies emerged online for merchandisers, it became easier to start beauty companies. Also, the rise in popularity of social media marketing made it easier for new beauty brands to reach potential customers who sought cosmetics. One of the things that attracted Tengram Capital to Lime Crime was its ratio of direct-to-consumer marketing and its massive Instagram following. Additionally, its unique brand personality attracted Tengram.

 

Gersten talked about when Tengram invested in This Works in London. It was just a small brand at the time. However, Gersten said that it focused on natural and clean ingredients. Its message of promoting wellness was also attractive. Today, the wellness trend has grown in popularity. Tengram made a smart investment that included accurate predictions for future trend growth. Today, the beauty sector is large and fragmented. Gersten said that this aspect of the beauty sector creates plenty of opportunities. Corporate buyers tend to secure larger deals than Tengram normally does. However, Tengram keeps good relationships with big buyers. Since big companies often avoid complex deals with companies that have good potential, Tengram may step in to help in such instances.

 

In an interview, the interviewer pointed out that Tengram invested in two important beauty businesses in 2002 and asked how the company spots upcoming trends. Gersten said that brands with good category tailwind behind them are often better than companies with a strong headwind. Tengram looks at NPD data and analyzes a brand’s selling trends. Also, it looks at Tribe Dynamics to see the company’s media growth value. Additionally, Tengram executives spend time in stores and speak to employees to help themselves get a better idea of a brand’s potential.

 

Gersten also talked about marketing and packaging for beauty products. He said that ReVive would not have been revived without the help of its own high-quality products. Its products were an essential component of the company’s survival in addition to Tengram’s efforts. However, it failed in other aspects before Tengram acquired it. Those aspects are the same ones that kill most other businesses that do not have remarkable products. Since people loved ReVive’s products, Tengram saw it as a smart investment. Tengram brought the company back to life internally after buying it. Today, packaging is important because many owners talk to the same manufacturers. Having unique or appealing packaging helps a brand sell its beauty products.

 

Tengram helped build teams and restructured several companies after it bought them. Gersten said that Tengram recruits and hires good executives who are strong leaders. He said that a glimpse of Tengram’s portfolios shows many organizational changes across brands. With each of its companies, Tengram’s executives report directly. This shows a more aggressive retail strategy, which is important since the company has global growth plans for Lime Crime and its other beauty brands.  Something Racked has covered in their article: The Redemption of Lime Crime, the Internet’s Most Notorious Beauty Company

 

In an interview, Gersten was asked about Tengram’s decision methods for divesting. The interviewer referenced the sale of Nest and the sale of DevaCurl. Gersten said that deciding when to buy is easier than deciding when to sell. He said that Tengram makes a five-year business plan for each company and tries to keep it for a minimum of that period. However, he said that the decision to sell those specific companies was based on the market. If valuation is high while corporate interest is high, the company may sell a brand before the five-year period is over. Gersten said that Tengram often maintains strong communications with corporate buyers. However, any brand that is owned by a private equity firm can be bought or sold at any time in most cases. With private equity firms, the key is to determine a fair price.

 

When asked about future investments, Gersten described Tengram’s portfolio as crowded. Its recent purchases include companies that were already popular and will likely grow in popularity over the next several years. Gersten said that the key for Tengram will be to watch trends. He mentioned cannabis as an example. Since it is set to be legalized everywhere in Canada later this year and has already been legalized in some parts of the United States, there may be emerging trends because of it. For example, if cannabis can be included in products, the possibilities for the cosmetic industry could be vast. Gersten said that the company is watching the cannabis trend along with other trends to see how Tengram can innovate and keep up with shifts. Also, it is considering purchasing some other brands that may be beneficial to its portfolio if trends shift as predicted.

See how this move will change Lime Crime in the future by following the famous beauty brand on Pinterest, and Facebook.