How popular 'clean' beauty brand collapsed after private equity takeover - as the huge cut in its top saleswomen's salaries are revealed

Clean beauty favorite, Beautycounter, plummeted from a multi-million dollar brand to closure after a private equity takeover, resulted in devastating pay cuts exceeding 50% for their employees.  

Gregg Renfrew, who started Beautycounter with a passion for clean skincare, began her multi-level marketing model in 2011. Carlyle, an investing firm with $425 billion in investor power, took a chance and invested $600 million in the brand in May 2021.

But this investment turned out to be one of Carlyle's biggest failures in 37 years, with all of the money they put into Beautycounter lost.

Not only did Carlyle's takeover destroy company morale, but sliced their sellers' income by more than half. 

Notable seller Renee Hill, who had at one point brought in millions of dollars for the company and received a $177,000 yearly paycheck, is now making $19,000, according to the lawsuit.

Clean beauty favorite, Beautycounter, plummeted from a multi-million dollar brand to closure after a private equity takeover, resulted in devastating pay cuts exceeding 50% for their employees

Pictured: Social media content for Beautycounter's products on Instagram 

'There's a lot of damage that has been done,' Hill said. 'I don't believe I could ever step back into that space.' 

Upon acquiring a controlling stake in Beautycounter, Carlyle facilitated a partial sale of Ms. Renfrew's ownership for approximately $50 million, according to individuals directly involved in the transaction. 

Renfrew remained as the company's CEO, and both parties shared the ambitious goal of growing Beautycounter's annual sales from $400 million to $1 billion, culminating in a public offering.

Prior to the acquisition, Renfrew had successfully built and sold a wedding e-commerce site from the ground up, but decided to follow her true passion of popularizing 'clean' beauty and create products without harsh chemicals and unnecessary additives in favor of minimal ingredients.

Renfrew cultivated a passionate community of promoters, primarily women, who enthusiastically spread the word about Beautycounter to their loved ones. 

These promoters not only championed the brand's sugar scrubs, cleansers, and creams, but also embraced the opportunity to build their own sales teams. By recruiting others, they earned a commission on all sales within their network.

Gregg Renfrew, who started Beautycounter with a passion for clean skincare, began her multi-level marketing model in 2011. Carlyle, an investing firm with $425 billion in investor power, took a chance and invested $600 million in the brand in May 2021

But this investment turned out to be one of Carlyle's biggest failures in 37 years, with all of the money they put into Beautycounter lost. Not only did Carlye's takeover destroy company morale, but sliced their sellers' income by more than half

This strategy proved highly successful. At its peak, Beautycounter boasted a force of 60,000 sellers, initially called consultants and later transitioned to 'advocates' under Carlyle's ownership. 

Hill exemplifies the power of this approach. Having joined Beautycounter just weeks before welcoming her fifth child in 2016, she introduced the brand to her family and close friends. 

Over time, her personal efforts led to the recruitment of 40 individuals, who in turn expanded the network to 400 sellers, generating a six-figure annual income.

In the past, she had been recruited by other multilevel marketing positions, but turned them down for the same reasons the other sellers became passionate about Beautycounter - Renfrew's leadership, her open dialogue with employees, and her advocacy for nontoxic ingredients in every day products.

'It made it really easy as well to not feel slimy about offering somebody a network marketing opportunity, because I felt so passionately about what we were doing and how we were doing it,' Hill told the New York Times. 

Renfrew fostered a strong sense of community by treating the independent sellers as valued members of her team. This loyalty extended to advocacy efforts, as sellers joined Ms. Renfrew on trips to Washington to lobby for stricter regulations in the personal care industry

By 2020, the company, having achieved profitability the year prior, reached $395 million in sales, according to sources familiar with the company's finances.

As soon as Carlyle bought the brand, the once devoted sellers started to leave and sales plummeted. The firm blamed the sudden exodus of sellers on the pandemic, citing declining enthusiasm for working.

Fast forward to the end of 2023, Carlyle handed the business over to its lenders, Bank of America and JPMorgan Chase, which would be in charge of selling what was left. For Carlyle, that meant effectively giving up on a $700 million investment, valuing it at zero

In a desperate effort to maintain the same sense of profitable comradery Renfrew had spent a decade building, Carlyle hired a new chief executive Marc Rey in February 2022 with expertise in mainstream beauty to save the company.

Rey then restructured commission system for the sellers, which would reduce their commission, and complete redo of the company's main selling point of 'clean' beauty.

By the end of 2022, Renfrew departed from the company, leaving her board position. Carlyle, the investment firm, provided additional funding of $65 million between late 2022 and early 2023. With their support, Rey, the new CEO, invested over $10 million in modernizing Beautycounter's technology and brought in consultants. 

He also secured a sales deal with Ulta, a major beauty retailer, to carry Beautycounter products.

Despite these efforts and a 14% increase in overall prestige beauty product sales in 2022, Beautycounter's sales continued to decline. This led to Rey's resignation in May 2023.

Fast forward to the end of 2023, Carlyle handed the business over to its lenders, Bank of America and JPMorgan Chase, which would be in charge of selling what was left. For Carlyle, that meant effectively giving up on a $700 million investment, valuing it at zero.

Renfrew bought the rights to the Beautycounter name and other sets from its lenders for millions of dollars, but shocked sellers when she announced it would take her months to get the company up and running again.