Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and Chief Content Officer of Mansueto Ventures. Each week, this newsletter explores inclusive approaches to leadership, drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to receive it yourself every Monday.
Gregg Renfrew is back. Four years after the entrepreneur sold her clean skin care and cosmetics brand Beautycounter to The Carlyle Group in a deal valued at $1 billion — and more than a year after she and the private equity firm shuttered the company amid declining sales — Renfrew today officially launches Counter, a new company built on the Beautycounter assets she acquired from Carlyle’s Lenders has acquired.
A season of learning
Counter, which has been quietly selling products online since June 25, shares the clean ethos of its predecessor and uses some of its formulations. Renfrew has also secured the data of all Beautycounter customers. But Counter is an upstart compared to Beautycounter, which reportedly had $400 million in annual sales at the time of the Carlyle acquisition. Despite her considerable experience as an entrepreneur — she previously co-founded a bridal registry site that was purchased by Martha Stewart Living Omnimedia — Renfrew is in many ways going back to basics, focusing on profitability and listening to customers and vendors.
“I went into this today with a certain humility,” she told Modern’s CEO. “I don’t claim to have all the answers. I’m in a learning season.”
Beautycounter’s demise was indeed humiliating. (My colleague Elizabeth Segran of Fast Company provides a thorough account of the company’s rise and fall.) Sales floundered and the company struggled to pay off its debts. Efforts to revive Beautycounter, such as a deal to sell its products in retailer Ulta Beauty, and leadership changes, including Renfrew’s return as CEO in 2022, ultimately failed to save the company.
Renfrew says buying back Beautycounter’s assets rather than starting a new company from scratch wasn’t just a way to reinvigorate a company. It was also an emotional decision. “For the old company to completely die when it pioneered, created and led clean beauty – knowing that it had once been a very successful entity – I didn’t want to let go of any of that,” says Renfrew. She adds: “My daughter Georgie was literally bawling in front of me saying, ‘You can’t just let this thing die. Mom, you’ve worked so hard for so long.'”
Second chances and lessons learned
Renfrew isn’t the first founder with seller’s remorse. In 2023, Ben and Nate Checketts took it back control of the Rhonethe clothing brand they started, from investor L Catterton. Sprout Pharmaceuticals founder Cindy Eckert sold her company to Valeant Pharmaceuticals (now known as Bausch Health Companies Inc.) in 2015 for $1 billion, then bought it back two years later because the giant did not make “reasonable efforts” to commercialize Sprout’s female sexual health drug.
At Counter, Renfrew applies the lessons he learned the hard way from Beautycounter’s collapse. She is not the majority shareholder, but she says she has a high degree of decision-making power. Her backers are usually individuals, most of whom have invested with her before. The only institutional investor came in “knowing that we were going to do things a little differently,” such as prioritizing profitability over growth. “Profitability gives you freedom of choice,” she says. “One of the things I’m very aware of is that you never want to be in a situation where you’re not profitable. And if that means the company is a little smaller and takes longer to grow, then that’s no problem because your customers will know that you’ll still be around in five years.”
She holds conference calls with customers and vendors and asks what’s working and what’s not. “I’m trying to understand and learn,” she says, adding that she “recognizes that we are here at the service of others who will give us the opportunity to build a great brand and a great community.”
Counter’s success is by no means assured. The clean beauty category that Renfrew helped create is now full of competitors, and Beautycounter’s demise has left employees, salespeople (the company sold through its website but also through so-called ambassadors who earned a commission on sales) and customers in the lurch. Counter may need to, well, counter lingering negative feelings. “We owe a debt of gratitude to those who continue to buy from us in this new business,” Renfrew said. “We must treat them with the respect they deserve.” For Renfrew, one way to show them that respect this time is to build a company that’s built to last.
What is your approach to the longevity of your business?
If you are a founder or work at a founder-led company, in what ways does your company ensure longevity? Share your insights with me stephaniemehta@mansueto.comand we’ll include some of the best reader feedback in a future newsletter. As a reminder, I’m asking for nominations for Modern CEO of the Year via this form. Entries are due on November 21st and we will share our choice (or choices) in a newsletter at the end of December.
Read and watch: entrepreneurial second companies
Cindy Eckert about buying back sexual health care company Sprout Pharmaceuticals
Founder of Chipotle Steve Ells wants to shake up restaurants with its new concept Kernel
Mark Lore on what it takes to be a serial entrepreneur
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