The Rise And Epic Fall Of Beautycounter

Splattered in between stories of friends' babies and cocktails were jarring slides of Beautycounter ads with promo codes. Were their profiles hacked by this burgeoning beauty and skincare company? Not quite, but they were hijacking my feed with unending promotional material for this clean beauty brand for the past several years. It took a while, but they finally won me over. Never in my life had I forked over $50 for a skincare product, but I have to admit: I got hooked. I finally bought into it all – just in time for Beautycounter to declare bankruptcy and disappear overnight. We’ve seen businesses rise and fall before, like Glossier and Tumblr , but how did Beautycounter join the graveyard of Back Then Businesses? What happened to this billion dollar beauty company that showed nothing but prosperous growth? Two words: greed and control. The Origin Story Beautycounter was founded in 2011 by Gregg Renfrew. (Don’t let the name fool you – Gregg is a woman.) Beautycounter’s mission was to provide safer and more transparent personal care products – one of the first companies, in fact, whose mission was to provide clean beauty cosmetics. The company’s history is rooted in a commitment to addressing the lack of regulation in the beauty industry, particularly concerning the ingredients used in everyday products, which range from skincare to makeup. The brand followed a “Never List” of over 1,800 ingredients that it promised not to use in its products ( some resources say this number is 2,800). This focus on safety and transparency was a central aspect of the company's mission. In addition to offering products, Beautycounter was active in advocating for policy changes related to personal care product safety, worked to educate consumers about the importance of safer ingredients , and lobbied for stricter regulations in the beauty industry. Commendable, right? “Our job is to show that regulation won’t stifle innovation and there is a future where all beauty is clean beauty,” Renfrew told Entrepreneur in 2020. By 2018, Beautycounter was operating through a multi-level marketing model (also called MLM), which is basically your classic pyramid scheme. For better or for worse, this type of marketing plan relies heavily on non-salaried people who earn a commission on their sales. Within five years, they had 65,000 individual consultants. Celebrities like Jessica Alba and Chrissy Teigen championed the brand, enhancing its credibility and attracting a broader audience. Beautycounter quickly became synonymous with the clean beauty movement, often touted as the go-to brand for eco-conscious consumers. 2020 rolls around, and while companies declared bankruptcy left and right, Beautycounter was actually one of the companies that thrived during the pandemic. Their explosive growth was attributed to consultants joining the bandwagon to supplement lost income, but also awareness around clean beauty was becoming more and more important to consumers. Here’s Where Things Get Interesting One year later, in April 2021, Beautycounter was acquired by The Carlyle Group in a deal that valued the company at $1 billion. One of their first acts? They slashed commissions, upsetting the women who were the backbone of this company. It was the beginning of the end. In 2022, The Carlyle Group wanted Renfrew out. They insisted that the job of unlocking Beautycounter’s future growth should go to an outsider – longtime cosmetics executive Marc Rey, who replaced Renfrew as CEO in February 2022. He lasted 16 months before they faced foreclosure. Concerns had begun to surface regarding Beautycounter’s product quality. Customers reported inconsistencies in formulations, with some claiming that newer products did not meet the high standards set by the brand. These quality control issues undermined trust and led to an increasing number of negative reviews. Beautycounter had begun sacrificing its mission and disgruntling its advocates at the cost of greed. In early 2023, Beautycounter found itself at the center of a public relations crisis. Allegations surfaced regarding misleading marketing practices and unsubstantiated claims about product effectiveness. Customers began to voice their dissatisfaction on social media, leading to a viral backlash that tarnished the brand’s carefully cultivated image. The fallout from the public backlash had severe financial implications. Sales plummeted as loyal customers turned to competitors. Zero Dark Thirty I watched it all in real time – it was unavoidable. I couldn’t log onto Instagram without being hit with promos about the big, upcoming launch of Beautycounter’s new endocrine-disruptor free fragrance line. In addition to their popular tinted moisturizers, vitamin C serums, and other beauty products that were packaged in minimalist, luxurious bottles, Beautycounter was about to start a new chapter in the fragrance department. In spring of 2024, Carlyle wrote off its investment in the company and sold it back to Renfrew who picked her role back up as CEO and is at work to rebuild what she started. She shared, “There was unresolved and unfinished business that I needed to come back to do. I feel responsible to carry this torch forward, knowing what I know and having achieved what I’ve achieved. I know that I’m the best person to do this job.” Spoiler alert: she wasn’t. Tens of thousands of consultants (or “advocates,” as Beautycounter called them) were ready to pull the trigger on the new fragrance launch. Some of their livelihoods depended on it. But then, on April 18, Beautycounter went dark. The majority of the employees at Beautycounter were let go immediately, and consultants were given only hours' notice before the website and business were shut down. If you had an order processing, too bad. Your money was lost, and you were encouraged to take it up with your bank. According to Fast Company, “All 200-plus Beautycounter employees were asked to join an emergency Zoom meeting. Renfrew read from a script, avoiding eye contact with the camera. She announced that Beautycounter was shuttering. All employees would be fired. There would be no severance payments. Employees would not even be entitled to COBRA, the federal program that helps workers retain health insurance. It was a shocking end for a brand that was considered a success.” The Comeback Kid Didn’t Come Back Renfrew said after the crash that the company would need just one week to return to its usual operations. To say that assessment was optimistic and unrealistic is…accurate. Renfrew slipped into the silent void, and it took an additional two weeks for the 65,000 consultants to learn that Beautycounter would not be returning for the foreseeable future. At the time of this writing, its Instagram remains frozen on its closing announcement from May 7. The homepage of Beautycounter boasts an outdated message, vaguely stating, "Something new is on the way. We are currently working to build a new company, but don’t worry, we’ll be back later this year with the safer, high-performing products you know and love, as well as some other surprises." Something in me doubts that we’ll see its reemergence by the end of this year, and if we do, it will be an uphill battle, given that many of its previous advocates are still reeling from being hung out to dry. Beautycounter began with great intentions, but like many burgeoning businesses, it became lost in the greedy sauce and sacrificed a lot in the scramble for control. It says a lot when a company that touts nontoxicity in its products wasn’t able to keep the toxins out of its business plan.