From humble beginnings in a basement flat in London’s Islington with an investment of just £16,000, Carmen-backed e-tailer Cult Beauty has become a go-to destination for beauty insiders and is expected to report a turnover of £68 million later this year. Ranking seventh in The Sunday Times’ Fast Track 100, an annual ranking of Britain's 100 private companies with the fastest-growing sales over their latest three years, the company was this week profiled by the Business of Fashion, and in an interview with the founders Kati Chitrakorn quizzed the pair about what was behind their rapid ascent.
“We were just two very frustrated customers,” explained Alexia Inge, recalling her and her co-founder Jessica Deluca’s experience of the traditional bricks-and-mortar approach to beauty retailing. Inspired by the selection of products curated by industry experts that regularly featured on InStyle magazine’s ‘Best Beauty Buys’ pages, the former journalist and investment banker set about building a bespoke online platform to not only champion what they believed to be the best independent and niche beauty brands, but with an emphasis on customer service and access to expert advice.
“It’s easy to forget that when Cult launched, there was a real scarcity of curated and considered online beauty edits,” explained brand consultant and former Stylist beauty director Joanna McGarry to BoF, and it’s the company’s pioneering approach to merchandising that has much to do with its success. Stocking under-the-radar brands such as Lime Crime, Ouai and Sunday Riley, Cult Beauty was also one of the first to sell Anastasia Beverly Hills, bringing the brand to Europe, and launched clean beauty brand Tata Harper on its site back in 2013 when other retailers were not yet fully behind the notion of ‘natural beauty’. The company’s ethos has also attracted brands such as Alpha-H, which pioneered the use of glycolic acid in skincare, and today the brand remains one of the most popular on Cult Beauty.
An emphasis on performance over price serves the company well, “It has to be one of those brands where you want to cut open the packaging and scoop out that last little bit of product and use it down to the end, because it’s that good,” explained Inge. But having a tight inventory has also contributed to Cult Beauty’s success, as have its limited-edition products and packages – the company launched its first beauty box four years ago with 1,000 units selling out instantly and now releases two to three beauty boxes a year. And while many companies have long seen customer service as an additional overhead cost, Cult sees it as a major value-driver, recognizing that without the ‘try before you buy’ option typically available in store, online-only retailers have to offer something more unique.
To date, Cult Beauty has embarked on three rounds of funding raising a total of £1.75 million from investors, including Carmen, and according to Cult Beauty chief executive Murray Salmon, who led the first round of funding when he joined the start-up in 2011 from Net-a-Porter, “By our official 10-year anniversary in June 2018, we will be in excess of £100 million in revenue.”
Going forward, and with 40 per cent of the company’s turnover in 2017 generated overseas, the company is focused on internationalization, which will be led by where its customers are. And when asked by BoF about the prospect of a physical store, Salmon commented, “There’s still a huge amount of growth we can sustain without considering bricks-and-mortar,” and in keeping with their online focus explained that they were exploring the possibility of launching a loyalty programme or an app.
Read the full article on BoF here.
Read more about Cult Beauty here.