What gave you the idea to start Cult Beauty?
My co-founder Jessica Deluca had the idea. We both loved InStyle’s magazine’s Hall of Fame and wanted to set up a business which reflected that, because so many people are oversold or mis-sold beauty products.
Jessica had a background in databases for financial companies. My background was fashion journalism and PR – initially GAP and then more indie brands. The experience of working with small brands gave me a thirst to work with more. When we met, we bonded over our love to beauty products; Jess had the vision and I made it palatable. Together, we wanted to create a trusted treasure trove for beauty magpies.
What got the business off the ground?
In 2001, I had a car accident and I broke my back and sternum. Because it wasn’t my fault I got £45k compensation. I didn’t touch that money for seven years because I wanted to wait and use it for something that was right. I met Jess and she gave me the pitch – it really resonated with me. In June 2008, I committed half the money to the business and kept half to live on; Jess contributed a nest egg she’d built up.
How did you raise money?
We did a seed round of investment from friends and family and raised £70k. In June 2011 we raised a further £1.75m. It was a difficult time as banks weren’t lending – one offered an interest rate of 12.5% which I wasn’t comfortable with. It was hard to go and raise money, especially as two women. But one of our investors was Murray Salmon, then COO of Net A Porter. He is now my co-CEO here – he followed his money and has become full time; Jess moved to LA in 2014 so he stepped in to her role. His knowledge of finances has helped enormously. He got us in order!
What experience, if any, did you have in the e-commerce world?
We had no experience. There were no rules at the time as no one else was doing anything like this.
Or the beauty industry?
Essentially this is a hobby I have monetised, legitimising my extreme addition to beauty products!
How do you get started?
It was hard for brands to get on board at the start. We could only afford to stock six of each product and we paid brands monthly as we sold and only took a 30% margin. Now we have a traditional wholesale model and have a 60-day payment plan. It was hard for brands to understand what we were doing. In a department store, a brand can expect about 40% of their total range to be sold, but we were picking and choosing our hero products. They didn’t like that, particularly the French brands. But we explained that people don’t buy everything from one brand anymore. Like in fashion, where customers mix high street and designer, they do the same with make up and skincare.
We’ve always sought out the indie brands and they’ve become huge – some of them have grown with us, such as Huda and Charlotte Tilbury.
What is the most effective way you reach your customers?
My advice is not to rely on one channel. I think of it like an eco-system. We have social media and different channels and tailor the content accordingly. It’s organic content that is supported with some paid content. We have PR stories in print media, bloggers, journalists who have adapted in to influencers, a newsletter that goes to 3.5m, 1.1m on Instagram and 250k on Facebook – all built organically. We don’t do above the line advertising but we have affiliates with and The Refinery.
How do you get exclusive launches and ranges?
We have five people in our buying team and I call them the Beauty Bloodhounds or the Truffle Hunters! We also have an LA-based beauty buyer – London and LA are the centres of beauty. We nurture our relationships with beauty founders and go over and above in that. Huda is a good example of one of our incubation brands and it is now massive – we grew together.
Lots of people now come to us for our buying help and ‘hand holding’. It’s important to be generous. Where fashion is exclusive, beauty is inclusive, for both customers and businesses.
How have your brands evolved?
In the last five years we have seen a boom in the beauty industry. Barriers to entry have lowered – for example, minimum orders for production have reduced which has led to an indie brand revolution! Ten years ago you’d have needed £5m to launch one beauty product, now you could do it with £50k. Social media influencers can start brands. Look at Anastasia Beverly Hills – Cara Delevingne-style brows were in, Cara name-checked that brand, and the founder went with it; Anastasia was very savvy on social media and it’s a huge success with a wide range of products.
How do you deliver a premier customer experience?
We make sure it is clean and easy to discover. We share all customer reviews, good and bad; in fact, we have a reputation for having the best customer reviews out there. People who review love their beauty and the reviews are excellent. We will allow negative reviews too because sometimes they can tell you more than the good ones.
We also have excellent content on the website to educate our customers. It is written by our beauty editors and meant to be informative and enjoyable, as if you were reading a magazine. Our Head of Copy is actually the first intern we ever had!
How do you manage the fact customers can’t try and test before they buy? Does that have an impact?
If you get the first sale right, people will come back. You need to make sure that product and service exceeds expectation. When someone places an order they can choose samples – there are lots of skincare samples available, less so with make up. But we have a return rate of 2.5%, which is very low. If someone doesn’t like something they can have a store credit or we will find them a product to match their expectation where that one didn’t. If they have a bad reaction, we will give them their money back.It’s about building trust – and we have establish strong trust with our customers.
How has your expansion affected your approach to running your business?
We started in Jess’s second bedroom in a basement flat in Islington using third-party distribution, which was useful at the time as it meant we could focus on brand building and selling. Since 2011 we’ve had in-house distribution.
We started incubating brands before anyone was stocking them. We’ve used social media for free marketing. But the biggest change has been the approach consumers have taken to indie brands – not just in beauty but everywhere. There’s been a big shift and that has been useful for timing for us.
How big is Cult Beauty now and how has your role changed?
We have 200 employees – 110 here in Islington and the rest are distribution. Each year the Christmas party is a great marker when I see the new faces or we realise we need a bigger venue!
I recently took six months off for maternity leave and it was a brilliant way to learn to delegate. I’ve come back and redefined my role, focussing on branding, storytelling and being a spokesperson. We want Cult Beauty to add value to people’s lives – it’s beauty with a heart.
What advice would you give yourself if you were starting out now?
Get the number of a good lawyer and accountant. We’ve spent a lot on money on bad third parties. But we’ve learnt lessons which were important and informed actions we then took – we’ve learnt on the job.
I’d tell myself to worry less – I’ve had imposter syndrome. But I’d say if in doubt, double down on your mission and focus on why. Ask yourself, does this follow my core mission? If yes, carry on.
What’s the best advice you’ve been given?
We spent a day with the President of Free People. She asked us – why are you pretending to be a massive business? (It was how we wanted to come across at the time so people took us seriously.) Why are you pretending when what you are is what people are looking for? It made us become more authentic.
What have been the biggest milestones?
We started in a recession but from December 2018-2019 we turned over £104m, a year-on-year growth of 31%.
What have been the steepest learning curves?
All of it! I don’t think you notice a curve until you look back. We learn daily, we’re constantly reinventing – that’s the nature of the web. Consumer wishes and hopes are always evolving – but skin isn’t! Products change, our skin stays the same.
What has been your scariest moment?
In 2010 we nearly ran out of money. We were talking to investors and locked in to an exclusivity with one who strung us along. At one point we had three weeks’ worth of money. We called him up and asked him to go, but we had no other investment lined up. We worked out a holding pattern and had to let some people go. It took the pressure off. We went a second time and found Murray (and another investor, Mark). It’s about aligning and finding someone who values the company rather than just seeing what they can turn it in to.