43 - Janet Gurwitch, Laura Mercier, Advent International

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This is a podcast episode titled, 43 - Janet Gurwitch, Laura Mercier, Advent International. The summary for this episode is: <p>In Episode 43 of Earned, Conor sits down with industry legend Janet Gurwitch—founder and former CEO of Laura Mercier Cosmetics, and operating partner at Advent International. Additionally, Janet has invested in many popular brands, and currently serves on the board of directors for Olaplex, Drybar, and the Houston Astros.&nbsp;We start the episode by discussing Advent’s acquisition of Laura Mercier (along with BareMinerals and Buxom), as Janet shares the unique experience of reacquiring her own brand. We then take a step back to explore Janet’s extensive career in retail, learning how she worked her way up to Executive Vice President of Neiman Marcus, as well as how the then-unprecedented success of indie beauty brand Bobbi Brown inspired her to create Laura Mercier Cosmetics. Next, Janet reveals the qualities she looks for when investing in a brand, and the approach she takes when serving on a brand’s board of directors. We then unpack the factors that contributed to Olaplex’s success, and learn how Janet got involved with the Houston Astros. To close the show, Janet gives advice to aspiring entrepreneurs.</p><p><br></p><p><br></p>
Janet Gurwitch on Reacquiring Her Own Brand (Laura Mercier)
07:51 MIN
How Janet's Career in Retail Inspired the Creation of Laura Mercier
06:19 MIN
The Qualities Janet Looks for When Investing in Brands
05:48 MIN
Janet's Approach to Serving on Brands' Boards
03:47 MIN
Olaplex's Runaway Success
05:46 MIN
Why Janet Got Involved With the Houston Astros
04:57 MIN
Janet's Advice to Aspiring Entrepreneurs
03:51 MIN

Conor Begley: Today we learn from a legend. Janet is one of the best operators and board members in the world. She's worked with entrepreneurs that we all know and love as well as founding her own brand, Laura Mercier and taking that from zero to a hundred million dollars in revenue. During our talk, we talked about her guidance for other female entrepreneurs, what she looks for in a company to invest, and I make her pick between a national championship for her beloved University of Alabama and a world series for the Houston Astros, where she serves on the board. I really recommend today's episode. And if you really like it, remember to be a friend, tell a friend and subscribe, enjoy the show, guys.

Introducer: Influencers, inspiration, and Instagram, Instagram, Instagram. This is Earned by Tribe Dynamics. Here's Conor Begley.

Conor Begley: Welcome to Earned, everybody. Today we are going to learn from one of the best operators in the world when it comes to beauty and retail, Janet Gurwitch, sorry. Welcome to the show, Janet.

Janet Gurwitch: Hi, Conor. Very excited to be here.

Conor Begley: I am really excited to have you on this show, because I think I get to ask you all the questions that I might not want to ask if we were just having a regular meeting and you've got to answer them live on the air. Well, I guess recorded on the air at least.

Janet Gurwitch: Will be fun.

Conor Begley: Well, for those that don't know you, which I don't know who doesn't know you, but if they don't want to give them a quick background. So you spent 18 years in retail originally at Foley's and then as the executive vice president at Neiman Marcus, you then founded and sold your own brand, Laura Mercier with the autonomous artist or makeup artist. Got that to a hundred million dollars in sales and then have now bought that brand back, which is one of the more interesting stories I've heard as well as serving on boards, like Tatcha First Aid Beauty, Urban Decay as an investor and then most recently on the board of Olaplex, which Advent invested in at a billion dollar valuation is now valued north of 15 billion dollars, where you serve on the board as an operating partner and then also on the board of the Houston Astros. So that is, that's a lot of experiences we've got to pack into 45 minutes, but I am going to do my best.

Janet Gurwitch: Ready.

Conor Begley: So let's talk about reacquiring your own brand. I'd really like to hear about that story before we get into all your background because I do want to get into your background as well, but was that a bit of a, kind of a surreal experience to have this brand that you spent so much time taking from zero to a hundred million dollars in sales, and I think it's changed hands a couple times and now you're bringing it back into the fold? What has that experience been like first? And then second, where do you see the opportunities for that brand? Right? What is different about taking a brand that exists and has existed for a long time versus taking something from scratch? I'd love to start there.

Janet Gurwitch: Well, it's a dream. I would've never thought a brand that I built from my head and sold in its 13th year. And I actually sold it to Amway who then sold it to Shiseido.

Conor Begley: Yep.

Janet Gurwitch: But have watched it all along. And it's just for any entrepreneur, it is a challenge to watch someone else on your brand. And so it never entered my mind it would be available. Shiseido decided to sell three brands. We were notified last March, March 2021, they were selling BareMinerals, Laura Mercier and Buxom. And I think when they called me and told me that I couldn't believe it, but it happened, it all worked out. Obviously we did a tremendous amount of work and Shiseido was great and we bought it and seriously, we just got it December 6th, even though we announced it, I think at the end of August. So it's a complicated deal, a carve out. I've never done a carve out. Totally different experience, but I'm beyond excited.

Conor Begley: What's the idea behind purchasing these brands? Is this meant to be the start of a platform? Is this really just about owning these three brands and helping them to grow? And what do you think, why do you think you guys are positioned to help them be successful?

Janet Gurwitch: Well, I'm very impressed with how Advent was thinking of this and that is we hired Pascal Houdayer who will be the CEO of these three brands. So these three brands now will be its own company and he'll have a very strong team of a CMO, CFO, et cetera. And right now our goal is just to get them all at a great place. They're brands with terrific history and authentic stories. We want to make sure that's showing. And in the case of Laura Mercier, we're totally true to the history of the brand, what it was built on, which is top quality product. That's been our number one thing. Focus on the face. Flawless face is sort of what we used because Laura Mercier was known for, although you need great skin care, if you really want to change how you look on your face, the skin on your face, she was terrific. And if you need to go out tonight, we have the right products to help you and the right training. So those are the key things. We will be true to the brand and I'm very excited about it.

Conor Begley: Have they been experiencing, so you talk about kind of if you want to go out tonight and obviously the pandemic's played a really big role in whether or not people are going out at all. And I know that from the data that we saw in 2020, 2021, people were just talking about makeup a lot less. Right? And so how have they kind of worked through that and are they seeing the same kind of resurgence? We've heard there's a resurgence in makeup. Are they seeing the same kind of thing kind of in the second half of this year or is it still to come?

Janet Gurwitch: Well kind of both. Makeup was hurting even pre- pandemic. Skincare and hair care were the categories where they were experiencing great growth, but we are seeing, and at the end of 2021, some great results. So I would say, and Laura Mercier had just launched at Ulta. It had been at Sephora exclusively for like 15 years. So there's still lots of room for growth. It's very much a global company and always did well in Asia and flawless face really resonates in Asia. Probably the reason Shiseido was interested and they have done a particularly good job, Laura Mercier in Asia just launched in China in September.

Conor Begley: How is the Chinese launch going?

Janet Gurwitch: It's going well. I mean, it's really going well. And actually in our carving outs, very complicated, but they're going to run that for two years, Asia and Laura Mercier while we build up with Pascal.

Conor Begley: And actually it's funny, you bring it back to Pascal. I'd love to hear about, were you involved in that selection process for him? What was the criteria you guys were looking for in terms of bringing on an outside CEO to help run it? What is it about him that made him kind of the right fit?

Janet Gurwitch: He had done a carve out. This is a very complicated, I'm used to building a company, a solo company and selling it 100% to a strategic.

Conor Begley: Yep.

Janet Gurwitch: He has done a carve out. He did a carve out for a Henkel really from Shiseido with hair products. So he has the kind of expertise. He has a great background from Proctor& Gamble. And we really need someone who understands the nuances of a carve out, which is very different, so I think that was one of the key things to help Pascal get this job and he is very excited about it.

Conor Begley: Yeah. I mean, it's kind of, it makes a lot of sense, right? Because within these larger conglomerates, if you're not the biggest, or you're not the hottest, or you're not the one that's centered in the physical location of the headquarters, you can often not get the same attention that you would if it was an independent entity. Right?

Janet Gurwitch: So true.

Conor Begley: Yeah.

Janet Gurwitch: That's why we think these brands have so much potential. They all are of size. Well, Buxom is a small company, but both Bare and Laura Mercier are sizeable brands. We just have to go in and look at each one in detail and see, what is it? Is it product? Is it social? what do we do to elevate it, to hopefully double their businesses?

Conor Begley: Well, and honestly I expect the Laura Mercier launch and Ulta to go quite well, mostly because when we look at the data for Laura Mercier, the brand they've done really well on social, particularly on with influencers and what we've seen, what I've noticed over time is that the brands that do really well there tend to do better in specialty retail because if you think of about kind of who's following a makeup artist online, it's not like your average consumer, right? They don't go and shop at CVS. They don't go and shop probably even at Macy's, they're going to go to the place that has the best selection, the best expertise, the best options, which I think really is Sephora and Ulta, at least within the US at this point. And so I have to imagine that'll go well, but which is good. Probably a difficult conversation with Sephora, but I can imagine it's good for the brand, at least.

Janet Gurwitch: Well, they did it prior to us getting there. So, I-

Conor Begley: They took care of that conversation for you?

Janet Gurwitch: Yeah. Yeah. That's true. But anyway, well, Sephora has been great, a great, great partner for Laura Mercier as well. So, but we only look at businesses that have great global potential and I think that have a reason to be and these brands do.

Conor Begley: Yeah. Well, let's take a step back in your career, right? So you actually started in retail like Sephora and Ulta right at Foley's then eventually at Neiman Marcus. Tell me about that kind of experience. One, kind of how you got there. I think I'm curious if you have the framed letter somewhere there in your office. I want to see this famed framed letter, but we'd love to hear about that experience kind of how you got there and then separately, what did that experience, because that's a huge chunk of your career. It's almost two full decades. How has that changed your own approach to kind of building brands because that's been, I really feel like the second half of your career is building brands versus retailing them?

Janet Gurwitch: So true. Well, I think it was a great, it was sort of my MBA I feel in the retail world. My father owned a chain of shoe stores in Mississippi. And so I was always interested. I grew up in Mississippi and I was dying to go to some other places. So I also thought that it would be a great opportunity to travel, fashion. I loved business, mixing business and fashion. So I started out fashion. That's what I thought my interest would be. And what I learned particularly at Neiman's is I got to know intimately so many brands, both fashion and beauty and jewelry, and I mean, many other things. And I kind of took mental notes. Like I really took a page out of maybe David Yurman and I maybe took a page out of Chanel, but I looked at different things. And on some of those pages," I thought I'm not going to do that with my own brand." Or," I am definitely going to do that to build a brand that has longevity." So I learned on both sides things that seemed right to me and things that did not. And I feel it was mainly at Neiman's when I got to know some of these brands that had a hundred years of history. It was so interesting. But I went to Neiman's. They said, we want the next CEO to be a woman. And Terry Lundgren, thank God for Terry Lundgren who hired me as his executive vice president, but surprised me that he shortly left to go to Macy's and Burt Tansky who was at Bergdorf. Neimans and Bergdorf owned together, came down to be the CEO. And it was just a great, great experience from dinner with Princess Diana, to Pamela Harriman at the US embassy in France. It was just, Neiman's at the time, it was a very different time, but my God, it was such an exciting time, but we had Bobbi Brown. Bobbi had been a makeup artist in the Frederic Fekkai Salon, which was at the top level of Bergdorf at that time. And she went to Burt and said," If I did 10 lipsticks, people are wearing browns, not the pinks and reds that the large companies are saying we should all wear. I'd like to do 10 lipsticks." And he goes," What am I going to do with 10 lipsticks?" And she said," Put it by the up escalator from the first floor." And he did it. And he said," How many do you think you can sell?" She said," I think I can sell a hundred in a month." She sold a hundred in a week, and that was how Bobbi Brown got started. So he said," Can you make some other things? And-

Conor Begley: Can you do that again?

Janet Gurwitch: ...amazing. And of course she had a great success. So he had us try her at Neimans. We started with three stores and I was so fascinated because there were no indie brands. I mean, this is so ahead of time. And to many of your listeners, they can't imagine this. I mean, but it was just the large brands. And it's interesting. In fashion, there was so much newness and so many new brands, but in beauty, there were not. The same brands had been true for 20 years. And so it was a very interesting time and a very key point for Bobbi to enter, but I thought it was just Neimans and I thought it was just Bobbi. Then I went to London for the fashion shows and I was at Harvey Nichols at a Tuesday morning and I see all these consumers at one counter and I'm thinking," Wonder what that is?" And I look and it's Mac. And I saw many middle Eastern women standing there. I saw young English girls, I saw American tourists. So I thought," You know what? This is an inflection point. Yeah. It's not just me and Bobbi and Neimans it's happening." And really I was early. I mean, Bobbi was very early. She and I have talked about this and we see the big numbers people are paid today for their brands and we're really so sorry we sold so soon, but she really was first and I truly got the idea from Bobbi, but I did it with Laura Mercier who had a very different approach than Bobbi. A French makeup artist who loved color. It was just very different. But anyway, that's where I got the idea. Just paying attention, paying attention.

Conor Begley: I mean, real world observations are a thing. Right? And I know the, I'm trying to remember the exact phrase, but I think it's a Steve Jobs phrase. Well, I know it's a Steve Job phrase, but the exact language. It's, your whole world changes when you look around and you realize that everything around you, right? Everything that is built, this laptop, this house, that bike, this whatever are all built by people that are no smarter than yourself. Right? And that you can, if you want to build one of those things, right? You can change the world around you. You don't just operate within it. And it's like, I mean, it's just a profound realization when you say like," Oh, I could do that." Right? Like," I can do that." Right? And then you just do it. And it's like," Whoa," like," That's weird. This didn't exist. And now it exists because I decided for it to be." Right?

Janet Gurwitch: That's true.

Conor Begley: It's cool. What's interesting to me about your journey and is, I think in other interviews you've said, one, is probably the only time I had any in entrepreneurial impulse and then two, you said," I like fashion, not beauty." Right?" I was a bigger into fashion than beauty." And now that's become your career, right, is either helping other entrepreneurs and almost all very concentrated, at least in beauty. Looking back on it, have you kind of changed your opinion when it comes to being an entrepreneur and to the beauty sector, or are you still kind of, if you had a choice, you'd go back to fashion if you had your preference?

Janet Gurwitch: No, I really love beauty, but beauty's much more interesting now. I feel the time that I entered it, you just had these big behemoths who would tell everyone, no matter how they looked, I'm brunette, real nice. They would tell the blonde with blue eyes, they would tell an African American woman that we all should be wearing X color eyeshadow this year. And, so I found it sort of dictatorial, not a realistic... I just didn't see it realistic. And so I loved when I met Bobbi, to be honest, I mean, she said," I cannot make someone look like the cover of Vogue, but I can make them look the best they can look," and I loved that. And Laura Mercier was very true to that. Be true to yourself and I'm going to give you the tools and the education instead of gift with purchase we did education with purchase. We had a lot of great makeup artists who could teach you how to apply your makeup and you would feel great about it. So, no, I love beauty and I mean, I love fashion too, but as far as business, I have really enjoyed being in the beauty business and it's changed dramatically, as you know.

Conor Begley: I feel like we need to find a way to get you some exposure to fashion. I feel like personally responsible. Your life won't be complete if you don't end up doing some more work in that side of the field. But actually I'd be curious. This is actually a really good question for you specifically. So one of the things that's really interesting for me is there's a very robust ecosystem of investors and frankly, even operators on the beauty side, but there's really not that same ecosystem in fashion it feels like, right? You just don't see that same startup brand grow a brand, sell a brand and I think that's part of what keeps investors kind of out. What's your experience? Why is there not that same community or maybe I'm just not exposed to it of investor and operators on the fashion side?

Janet Gurwitch: Well, I think there has been in the past. Not now and not in say the last 10 years because of distribution channel. That's what I would say, because we have in the United States, Sephora and Ulta who are huge and can help you launch and built great brands in addition to your own D to C in, addition to other things. So I think with fashion, you really had the stores, the department stores, the fine specialty stores, but you don't have this chain where you can all of a sudden be in 350 doors or a thousand door, depending.

Conor Begley: Interesting.

Janet Gurwitch: So I think it's been distribution channel.

Conor Begley: Yeah. Well then I feel like we need to start one. That's the next one.

Janet Gurwitch: Yeah.

Conor Begley: In terms of investing, right, so for you, you've invested in a bunch of companies, many that are successful, right? So I think after selling Laura Mercier you joined Castanea and you invested in Tatcha, First Aid Beauty, Urban Decay during the first kind of round of Urban Decay, which all got acquired by Strategics, Unilever, P& G, L'Oreal respectively. What do you look for prior to making an investment or prior to saying like," I think this is a brand we should invest in"? What are the kind of pillars that you're looking for?

Janet Gurwitch: Great question. So I started with Castanea, which was owned by the same family that owned Neimans and Bergdorfs. crosstalk.

Conor Begley: Okay.

Janet Gurwitch: People wonder, like how did I, without my Harvard MBA, without any MBA for that matter, how did I get with this group? And that's how. So they sold Neimans and Bergdorf, therefore I had to sell Laura Mercier. They owned 51%. They also own 51% of Kate Spade. We both had to sell, but having said that, then they said to me," Do you want to do beauty in private equity?" So the first company available, I mean, it was for sale. It was Urban and it had sold a couple times actually.

Conor Begley: Oh, okay. I thought it was the first go around.

Janet Gurwitch: No, no, no. It had sold to LVMH very early. And, but anyway, we bought it from the Falic family in Florida and we bought it a hundred percent and it's just interesting. They were doing$ 40 million in revenues. We paid$ 40 million.

Conor Begley: You don't see that very much anymore.

Janet Gurwitch: No. And then we did sell it in 36 months for about$ 360, something like that. So, but what I learned is, it was a great brand. First of all, I didn't want to ever do anything like Laura Mercier, I just, that's my heart. So I didn't want to compete. And Urban was just diametrically different. She went for an edgy girl, a girl that wore lots of color. That was really more fun. We were trying to be chic, classy and I loved that differentiation. So one, I wanted a founder and Wende Zomnir was still there. She was the Urban Decay girl. She still was the head of creative. And she had just created a palette for Christmas called Naked. And when I saw it at the board meeting and I remember it was my birthday, because it was December 4th. She said," Oh my God, we sold out at Sephora already." And I go," December 4th, you sold out?" And I just looked at it. It was 10 neutral eyeshadows, but she had named it Naked and written Naked, so great this crosstalk and I've heard her speak and she does give me this credit, so I appreciate it. But I'm the first one that said," Keep doing it. I mean, this isn't a Christmas thing. This is beautiful." And I kept thinking Naked could be a franchise, so we did Naked lips, Naked skin, et cetera, and became a huge part of the business. But so I think my strength is if you're a great entrepreneur, you're true to your brand. I know with limited time and money, because that's what private equity has, limited time and money, what levers to push and which levers to let go and try to take a brand. We bought brands, didn't buy brands, we bought Urban, but I'm sorry, we invested mainly between$ 15 and$ 40 million in revenue. So we tried to get you to a hundred plus so we could sell you to a strategic. And we didn't buy any brands that were not profitable, but we bought brands that maybe were barely profitable and we could see a road to serious profitability.

Conor Begley: Did you have any that didn't work out?

Janet Gurwitch: Not at Castanea. I personally have had, I've done several on my own. I did do Dollar Shave Club, which is a great win, but I did Sugarfina, which was a great disaster.

Conor Begley: Yep, yep.

Janet Gurwitch: Yeah. So I did Sugarfina. What I learned from Sugarfina and this could apply in beauty, very smart entrepreneurs who had a very clever brand, but I'm going to say this on your podcast. I wasn't on their board. That's another thing. I won't invest in any other company if I'm not on the board. And not that I could have saved Sugarfina. I couldn't have because they had great people on their board, but they truly, I think they chose to just follow their own path. And I think I need an entrepreneur that will listen. And it doesn't mean they do what you say, but they're listening and really they know who to value and who not to value. So, that to me was a great disappointment. That one.

Conor Begley: If there were any changes they could have made that would've helped the company or that, I mean, obviously you never know. Right? But if they had, and this doesn't have to be your advice, but imagine they are saying like," Oh, I would have done this differently," what do you think some of those things would've been?

Janet Gurwitch: I think one key one is they were going heavy into retail their own stores at a time where I think it could have been a brilliant brand online. It just should have had the best website. I just think it was a natural. It could have done phenomenal that way. And they had one, but the focus was on the retail stores and it was not the time. It was not the time for that. And I think that's another thing. When you're doing your own business plan, what's happening now? What is happening now? Yes, study history. What works, what builds great brands, but is happening now and how applicable is it?

Conor Begley: A hundred percent. I don't want to go back too much, but when you talked about kind of the Naked branding, it made me think of a story and I'm going to butcher the story but the gist of it is what matters. So there's this very famous entrepreneur. He's been very successful and one of his first successes was there was this industrial fan company. And the name of the company was Industrial Fan Co or something like that. Right? Some generic name. And so, but they had this very unique product, very high quality, fit a specific need. So he bought the business and renamed it Big Ass Fans. Right? And then whatever. Five X the business. Sold it for 10X what he bought it for and basically just did that over and over again. And it sounds so silly. And I think that's not necessarily what I would've done, but clearly it worked out. And I think being willing to be bold and being willing to say," I'm going to be a little silly here," is something most people aren't willing to do. Right? And I don't know. You just see examples of this over. It's like the better than sex mascara, right? With two crosstalk.

Janet Gurwitch: Right.

Conor Begley: So yeah, I just love that story. So let's talk about boards. So obviously you did get a board roles at Tatcha, First Aid, et cetera, Urban Decay. And then more recently you've been on the board of the Astros, which I'm going to get to in a little bit, on the board of Olaplex, which just went public. What do you think are the good qualities of a board member, right? You already said having the entrepreneurs be willing to kind of hear you is something that's important from their perspective, but for you, how do you try to operate as a board member? What is your approach there? Yeah.

Janet Gurwitch: Well, I think when someone's putting a board together and I'm going to use the Olaplex board as a great example. Trisha Glenn, my partner who put together such a great board and we each have different expertise. So out of 10 people, I mean, we all bring different things and I love that. I find whatever the problem is at Olaplex, if it's audit, we have a former CFO that has done, was it Lululemon's board. I mean, just everybody has a great deal of expertise in their marketing whatever it is. But I would say that's been the most terrific board because we are so balanced and we all bring a different expertise. My expertise on the brands I did with Castanea was product development. And one of the things that... Drybar was also a Castanea.

Conor Begley: Yes.

Janet Gurwitch: And that was one that when we invested, they had nine Drybar salons, but no product. So my thesis on that one was different. I said," We can create a product brand around Drybar." In fact, they used a yellow blow dryer as their icon and they were using black blow dryers in the salon. So I knew, well, crosstalk

Conor Begley: Let's start with the yellow blow dryer.

Janet Gurwitch: Start with the yellow blow dryer. Yeah. They even had a light fixture with yellow blow dryers, but didn't have real yellow blow dryers. So anyway, so that was my thesis there, but where I don't have certain expertise, say my partner, Steve Berg at Castanea. Well, he understood real estate like leases and all that, so that was not my strength. I learned. I tried to learn on every board I'm on. I try to learn from every entrepreneur I meet. I mean, I've been very fortunate. Vicki Tsai from Tatcha, Lilli Gordon from First Aid Beauty. It's just been fantastic. And from Alli and Michael at Drybar. So I've been very fortunate to work with great founders, but did I answer your question? Just-

Conor Begley: I said, what were the qualities of a good board member? So for you, how do you try to contribute while letting them be the entrepreneurs that they are?

Janet Gurwitch: Totally. All right. Olaplex, the entrepreneurs are not there, but the senior leadership, I mean, we have Jue Wong, Tiffany Walden, Eric, that run it. But I try to be very available outside of the board to them if they need anything or they want to talk to me about anything. I'm very available to them because you don't want to be there for the board meeting. You want to really be knowledgeable. And I'm constantly at Sephora, Ulta learning, following all the brands you help online so I know what is happening. I always like to know where do we rank at these big Sephora and Ulta. Who's doing better? Why is that? Very competitive, but try to bring as much information as I can to the leaders of the brand and be very available to them. And they know my expertise is going to be marketing, retail and product.

Conor Begley: Yep. That makes sense. So let's talk about Olaplex first. It's come up a couple times and I think it's a pretty unique experience. I mean, it's just not very often you see what you saw, which is, and for those that, again, for those that don't know, Advent invested, I believe May 2020, which is, however-

Janet Gurwitch: No, January 2020.

Conor Begley: January 2020. I thought it was May 2020. Either way, invested a billion dollar valuation, a hundred billion dollars in revenue. Those are kind of reported numbers. You don't have to correct them. Right? But now the numbers are a little bit more clear because they're on the public markets, right? So it's a, call it 15X in the last two years doing over 500 million in revenue trailing 12 months, 500 plus. It's just crazy. Right? It went from growing, I think around 70% growing over a hundred percent year- over- year while maintaining some pretty absurd profitability. What has that rollercoaster been like these last two years? And I don't want to out you too much, but I remember you telling me when they first bought it. You're like," I don't know. You might have overpaid for this thing." What has that last two years been like as well as what were your lessons? That was the first company you've ever taken public, at least as far as I know. What were those two processes like? The last two years and then the IPO process?

Janet Gurwitch: It's been a fascinating experience I have to say. One, the goal was not to take it public. The goal was to build a great brand. So, it really was a result rather than a strategy in this particular case. But I was very impressed with Advent. That was my first company. Now I'm an operating partner with Advent and they could bring so much to the table. They have 80 billion under investment where, when I was at Castanea it was about a billion six. Very different. So I'm not used to having a whole tool kit available to me. So 2020, we bought it in 2020, but we didn't know it was 2020 until March. And then supply chain. Very challenging. Well Advent is in 12 countries. So if we couldn't get an ingredient for our formula, we could immediately go to someone at Advent and say," Okay, can we get it in Germany? Can we get whatever?" And I had access to things I am not used to from a global investor and really top people. So what Advent can offer and I know there's other very large groups that can do this as well, but I had not seen this because really it was myself and Steve Berg that helped the brands. And now I have experts in cyber security, in supply chain, in social media. And so when we invest in a brand today, we can say," We have this cornucopia of things. What do you need? You don't need it all. We wouldn't have bought you if you needed it all. But pick which ones do you need? And then we have experts for a certain amount of time that will A, get you running, and B help you hire the right people." So that I do believe they just, they helped us maximize this Advent senior team, helped the leaders of Olaplex. We were phenomenal who worked so hard and came up with some great ideas to work with the hairdressers and because their salons were closing down. They were very creative in how to handle 2020, so that was impressive. And then to do well in 2020, once we got back into stores, it really accelerated. So it's-

Conor Begley: Well especial with you guys had a lot of professional distribution, right, which people weren't going to the salons at one point. So to continue to do well is just like, I mean, it was, it's pretty wild, what that ride is like and where you're going to go with it. So let's talk a little bit about kind of their expertise in social as well as what you've observed with some of your other investments, right? Because if you were to look at some of your investments, like Tatcha was the number one brand we tracked in skincare when it came to EMV and influencers Olaplex is the number one and has been for years when it comes to influencers in social. First Aid Beauty and Urban Decay, obviously are pretty good social as well, or at least First Aid Beauty. I don't know when you exited Urban Decay, but what is it about Olaplex and maybe even Tatcha that you think led to them being so successful when it came to the social side of the business, social media side of the business?

Janet Gurwitch: Well, Olaplex, they started so early. I think 2014, they were very active in social, so I think they were early, relatively speaking. But I also think because of the hairdressers who were the natural influencers, it just, they created community, the thing is creating community. I don't think they lectured you. They sort of engaged you and I feel Tatcha does the same thing. So just really build a community around product that works. And the great thing about TikTok and Olaplex is that it works immediately. So go shower and I feel like they should put me on TikTok because it's improved my hair. They say I'm not the right demographic, but that's what crosstalk. But having said that I do think you can show in a 15 sec, I mean you could show on TikTok the change so quickly and then if you have a really authentic person who has their own hair salon, I just think the combination of all of that has worked so well for Olaplex.

Conor Begley: Yeah. It seems like they've really embraced that community of hair stylists in a meaningful way. And to your point about community building, it's something that I actually didn't really understand what that meant until the last call it two years when I really saw Tribes community start to form and it does take that long. It doesn't happen in six months, right? It takes a period of time to really build trust and relationships that result in community. So I think it makes sense why it works. The visual nature of it certainly doesn't hurt either. But I mean, even the case of Tatcha, right, Tatcha, the products, the product packaging is visual, but the products themselves aren't particularly visual yet they still were incredibly successful. So let's talk a little bit about your baseball career. So, you've got this long career in beauty and then you decide to get involved in baseball with the Astros. And what I think is interesting about that outside of the fact that they are theoretically very different industries is when you joined, Houston was not doing very well. Right? So they, I think they had their second year in a row, the year you joined of being dead last in the league. And they had a history of being successful, but weren't doing very well at the time. And so I'm curious, one, what made you decide to get involved outside of having some roots in Houston from the Foley's days? And then two, the kind of second half of that story is they've now gone on to be very, very successful. So you joined in 2012 and then over the last six years, they've gone to the playoffs five out of the last six years, gone to the World Series three out of those six years. I know you said Jim Crane played a big role there, but tell me first, what made you decide to get involved? And then second, what do you think has led to such a rapid turnaround? What has contributed to that?

Janet Gurwitch: Well, I love baseball, so we'll start with that.

Conor Begley: Okay. That helps.

Janet Gurwitch: I only work with things I love. So I love fashion, I love beauty, I love baseball, but who would think I'd have an opportunity to be a minority investor in the Houston Astros baseball team? But I did invest one, I read Moneyball when I had Laura Mercier and it resonated to me that Laura Mercier, my young baby brand was like the Oakland A's. We did not have the same monies available to us, expertise available to us that the New York Yankees had, but we had to compete with them. So I had my senior team at Laura Mercier read Moneyball. I said," We're the Oakland A's and crosstalk is the New York Yankees." So to any entrepreneurs out there in beauty, it's a great business book, more than baseball book because what they did, Billy Beane, who was running the Oakland A's, is he took metrics available to everyone and used them more efficiently and could analyze the potential of a player without using these top Scouts as much, et cetera, as the other teams were. So it was an innovative approach with common statistics available to all, but how he used those statistics. And it really has changed the game of baseball. So it's been fascinating. So that fascinated me and I love the book. It became a movie, et cetera, but the book is really, really good. So my friend Jim Crane decides to buy the Houston Astros and he asked me, would I invest? And I thought, We're a terrible team. He's a very savvy guy. He built Eagle Air Freight. He has Crane Logistics. He owns the Floridian Golf Course. He owns a lot of stuff." So I thought," Let's see." And I learned, I mean, I'm the only female investor. Most of the men are uber successful. Morgan from kinder Morgan. I mean, we got a bunch of really wealthy guys that are doing it, but Jim didn't do it for ego. He did it to rebuild a team. He loved baseball too. And so I've seen him rebuild a brand and a city that loves sports, but didn't have any great teams and it's just been great. We still can't compete with the New York Yankees or the LA Dodgers who could spend... They must not have a budget, but we do, we stick with our budget, but we have to be smarter and we have to take those statistics. So I'd say three things. One, Jim Crane, great leader. Two, a team that had the potential to be great, just had not. Three, he hired great people under him that really knew what to do. And when they said," Let's spend less on scouts and have 150 probably guys in our metric statistics world," and we do, top, top people and we have chosen the right young players who develop into players that the Yankees and Dodgers want to then have.

Conor Begley: That is a wild amount of people to have in metrics and statistics. You have five times as many people analyzing the players, as you have players on the team. That's pretty crazy.

Janet Gurwitch: That's true. It's been so exciting. And so I have been to the World Series now three times and I have a World Series ring with Gurwitch on it and who would ever think, so it's been a great experience.

Conor Begley: Probably not what you pictured back in Mississippi when you were first getting started. And then you mentioned there a few times, right, kind of a lot of men, right? A lot of men at the executive level, a lot of men generally. And I think that one of your unique perspective is you rose up in a time during retail. I think you said you were one of two executive leaders that were women on the Foley's team. And just generally I think there weren't a lot of women in leadership back then. Got involved in a business, the Astros and baseball, that's got to be very male dominated I'd have to imagine. And then separately, but then you've also, so you've spent a lot of time as an operator in businesses that are dominated by men, private equity is as well, but separately, you've also spent a lot of time mentoring entrepreneurs that are women, right? Whether it was launching Laura Mercier, which I think you said your first three recommendations were male makeup artists, but you wanted to work with female makeup artists. And then you've got Vicki, you've got, what was the First Aid Beauty? I can't remember her name.

Janet Gurwitch: Lilli Gordon.

Conor Begley: Lilli Gordon. Then you've got Urban Decay. Right? You've got Ola or, well, not Olaplex. But anyways, you've helped to mentor a lot of women that are also leaders or aspiring leaders. What is your advice to those women, right, as they're trying to kind of rise up within the ranks? And then what are some of the things... Yeah, I think advice is kind of where I want to start. So what is your advice to, if there was another woman that wanted to aspire to achieve what you achieved or what Vicki or the others, what would be your advice to them as they kind of embark on their career?

Janet Gurwitch: You know, Conor, I really would give the same advice to a man or a woman. I really believe excel in your job. If you're in a corporate structure, as I was in the first 18 years of my career, I mean, I had to stand out. I had to have the numbers, my, whatever. If I was a buyer, my department had to have the numbers. If I was divisional, my division had to have the numbers. Set your goals high, but have a substantive plan, a business plan. And years ago I didn't get promoted at Foley's when they had told me I had the best numbers that year and I went into the boss and I said," I can't believe I didn't get this job." And he said," I've never met you. I met the one that got the job. You are so politically naive." That's what he said,"political naive". So if you're in a corporate, I can't change my personality, but don't be dumb. Know who's going to change. And so I thought," Well, they just see my numbers." So there's a little bit more to it than that if you're in the corporate structure, but I always try to excel, I tried to always know what my competition was doing. I tried to be the very best. And I would say that to a man or woman. But it's interesting when Sheryl Sandberg's book Lean In, came out, I read it and I was thinking," Well, I mean, I leaned in." But when I read it, I think of times at Foley's again, only woman on the board of merchants at that time that I maybe didn't. I maybe didn't lean in. And then in private equity, everyone that I've been working with went to Harvard and graduated special, they were all at the top of the class, et cetera and I think you have to think," I'm here because I bring a certain expertise," and I really say to women lean in. Lean in. Have confidence in what you know and what you think because really that's what a board is. Everyone should bring what they're thinking. And that's why diverse board are so important. But I would just say excel, I said that to man or a woman, best you can because that's how you win.

Conor Begley: Yeah. Relationship building's a real thing as well. Right? I think that people underestimate how important having, FaceTime's the wrong word, but having FaceTime. Right?

Janet Gurwitch: So true.

Conor Begley: An interesting-

Janet Gurwitch: I undervalued it thinking," Well my numbers will speak for themselves." And he said,"You're the most politically unsavvy person." So I got it.

Conor Begley: Yeah.

Janet Gurwitch: I learned quickly.

Conor Begley: But I think you do have to do both for sure. I think that if you do one without the other, right, that's where you kind of fall flat. So you mentioned Moneyball now, you mentioned Lean In. I publicly put on my LinkedIn, I have all the books that I recommend. And I know that for me, when we first started Tribe, I was so young or we were so young that I was like," I don't know anything about what I'm doing," but you've got all this literature out there and anybody who writes a book, most people that aren't professional authors when they write a book, it's about the thing that they know the best in the world. Right? This is the thing, my labor of love, ideally that you're then sharing with the world. What are some of the other books that you've thought were really foundational for you in your own professional development?

Janet Gurwitch: Two books I read when I started Laura Mercier. Good to Great and Built to Last. Those two were very helpful to me. And one thing was, they said you have a bus and then as an entrepreneur, this was so helpful. I'm driving the bus, but I got to make sure everybody's in the right seats and I got the right team on the bus.

Conor Begley: Yep. Yep.

Janet Gurwitch: Sometimes I think for entrepreneurs, the right team for me when I was zero to say 20 million was some people and some of those people just loved the startup. That was so fun and we had to do everything ourselves. And then when you were 25 to 60, you maybe need some different skill sets and some different, so I needed to change the bus a little bit.

Conor Begley: Yep. Yep.

Janet Gurwitch: Then when I was trying to get to a hundred and over the same thing. So I learned from those books, even though they were talking about building much bigger companies than I ended up building at that time. Maybe now I get to help build one to a very big number, but so I found both of those, but I also think that are not just business books. I mean, I read Steve Jobs' life. I mean, I've read Winston Churchill's life. I think biographies of great leaders, you really can learn as much from those books, not just business books, but biographies of great leaders that you admire.

Conor Begley: Yeah. I've read... I a hundred percent agree and it's funny, I ended up reading three or four different biographies in a row, right, that came strongly recommended. So one of them actually was Steve Martin who has a really good, I think might be an autobiography. And so it was Steve Martin and then it was, God, why can't I... Edison. Right? So it was an Edison one and then there was one other one. And it was interesting, right, because they're all very different. Different time periods, different industries, different whatever. And what you found very consistently was just like, I mean, they just worked their, pardon my language, worked their ass off. Right? Like they just, every day. You should read this Steve Martin one. It's really good. To be a standup comedian, it's not just because you're funny. Right? It's you are grinding in the clubs, rehearsing jokes. If you ever listen to, Tim Ferris does an interview with Seinfeld, Jerry Seinfeld and it is fascinating. He's like the grind is actually what makes it successful? And so I agree. I think biographies are a great source and I also, Jim Collins is the one that wrote the Built to Last.

Janet Gurwitch: Yeah.

Conor Begley: There's also Great by Choice I think is another one he wrote. They're all really good. Okay. So last fun end- of- show question. And I'm actually curious to see, and you might get yourself in some trouble here with this one. So if you had to pick, and this is very relevant considering what's happened this week, if you had to pick between a National Championship for Alabama or a World Series for the Astros, who would you pick if you had to pick one?

Janet Gurwitch: That is tough. My dream is to name my school at the University of Alabama, Gurwitch Green in name of my, honor of my professor who helped me so much. So I have so much heart at the University of Alabama, but they always win. They and Georgia did beat them and deservedly so. Georgia did great. So I would say I would love a World Series. I would love a World Series.

Conor Begley: Yeah. I heard that it was like 80% Georgia fans at the National Championship.

Janet Gurwitch: Really?

Conor Begley: And I think it's because the Alabama fans are just like," I don't know. We've been there." You've been there six out of the last seven years. It's like, what are you going to do?

Janet Gurwitch: Yep. And not once since 1980 I feel it was their time.

Conor Begley: Yeah. Yeah. Well I really appreciate you taking the time, Janet and thanks again. I know I learned a lot today and I know other people are going to appreciate it and good luck with Olaplex as well as with your taking back over your baby, right, taking back your heart. So good luck with all that.

Janet Gurwitch: Thank you, Conor. You're very good at this.

Conor Begley: Thanks. I try. I try. All right. Bye, Janet.

Janet Gurwitch: Bye- bye.

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DESCRIPTION

In Episode 43 of Earned, Conor sits down with industry legend Janet Gurwitch—founder and former CEO of Laura Mercier Cosmetics, and operating partner at Advent International. Additionally, Janet has invested in many popular brands, and currently serves on the board of directors for Olaplex, Drybar, and the Houston Astros. We start the episode by discussing Advent’s acquisition of Laura Mercier (along with BareMinerals and Buxom), as Janet shares the unique experience of reacquiring her own brand. We then take a step back to explore Janet’s extensive career in retail, learning how she worked her way up to Executive Vice President of Neiman Marcus, as well as how the then-unprecedented success of indie beauty brand Bobbi Brown inspired her to create Laura Mercier Cosmetics. Next, Janet reveals the qualities she looks for when investing in a brand, and the approach she takes when serving on a brand’s board of directors. We then unpack the factors that contributed to Olaplex’s success, and learn how Janet got involved with the Houston Astros. To close the show, Janet gives advice to aspiring entrepreneurs.