Hair Care Sector Insights: BELLAMI

The Harris Williams Consumer Group recently advised BELLAMI Hair, a premium brand driving innovation in the hair extensions and hair care categories, on its sale to Beauty Industry Group, a portfolio company of L Catterton.

Here, our senior bankers share why investor interest is growing in hair care and the key traits that made BELLAMI a standout in the space.

Why is the hair care subsector attractive to investors?

McPhilliamy: Investors are drawn to the subsector’s strong and growing consumer demand. Results from a Harris Williams consumer survey show that 61% of consumers who self-identify as beauty enthusiasts plan to spend more money on hair treatments in the coming year, while 52% plan to spend more on daily hair care (read the full report).

McBride: Demand for these products is accelerating as consumers continue to integrate health and wellness into their beauty regimens. This drives growth for hair enhancement solutions, including products for thinning hair or hair loss, as well as those that enhance volume, length, texture, or color. Similarly, scalp care is on the rise as a healthy scalp is viewed as a foundation for achieving healthy hair.

McPhilliamy: A unique aspect of hair care is that products are sold to consumers at retail and online, as well as through professional stylists in salons. Today, both the at-home and professional markets are seeing strong growth, with brands increasingly selling across channels as retailers expand their assortments. A stylist’s recommendation strongly influences consumer purchases, effectively serving as a direct sales channel for brands. It takes care and investment for a brand that doesn’t use distributors to build stylist and salon relationships through education, service, and social media.

Overall, the hair care subsector has seen significant investment activity, and we do not expect that to change given its strong tailwinds.

What made BELLAMI a unique and appealing asset?

McPhilliamy: BELLAMI is the leading brand in one of the fastest-growing categories in beauty. Its co-founders, Nikki Eslami and Julius Salerno, had a vision to make premium hair extensions more accessible to consumers online and through professional stylists and salons. They were pioneers in influencer marketing and built a social following of over 3 million, on par with the largest hair brands in the industry. With an incredible brand and growth profile, BELLAMI offered the ability to benefit from strong sector tailwinds, consumer demand for hair enhancement solutions, and growth in the consumer and professional channels.

McBride: BELLAMI’s direct relationships with stylists and salons, in addition to consumers, sets them apart from most professional U.S. brands focused on selling their hair care products through distributors. These relationships start with BELLAMI’s leading education program, which trains stylists on hair extension installation methods and valuable business tools. This gives stylists the ability to offer a service that can provide three times more revenue than hair color, while creating brand recognition and affinity for BELLAMI.

McPhilliamy: BELLAMI’s authentic brand story further inspires loyalty from both consumers and stylists. Its founders have a laser-focus on quality, which is apparent in everything they do, from products to service to education. It’s the most premium and well-known brand in the space, which has driven strong business growth, and makes it a perfect addition to the Beauty Industry Group platform.

What should M&A investors look for in the hair care subsector?

McBride: As with all parts of the health and beauty market, investors should prioritize an authentically differentiated brand creating real connections with consumers and a meaningful set of advantages over the competition. In BELLAMI’s case, the brand means something to consumers and stylists, and their business model is truly modern. This has driven growth for BELLAMI and the entire hair extensions category given the thousands of stylists they’ve trained.

McPhilliamy: It’s essential that brands in this space use all the tools at their disposal to become the go-to in their category. By cultivating strong consumer and stylist relationships, never skimping on quality, delivering a superior experience, and making effective use of social media, BELLAMI has worked hard to pull ahead of its competition.

Conclusion

Driven by increasing demand for hair enhancement solutions, BELLAMI has created value through its commitment to serving both consumers and stylists with high-quality products and service.

In addition to covering the hair care space, the Harris Williams Consumer Group has deep expertise in a wide range of subsectors. To learn more, please contact our senior bankers.

Select Harris Williams Hair Care Sector Activity 
 

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