The beauty industry is a thriving space with ever-growing demand for all kinds of personal care products. Hair care forms a significant part of this industry with several established and emerging players vying for attention with their unique products. Olaplex is one such company that is set to go public next week.
Olaplex is scheduled to go public on Thursday, September 30. The company will begin trading on NASDAQ under the symbol OLPX. It will offer 67 million shares at a price range of between $14 and $16. The IPO will be managed by a group of underwriters led by Goldman Sachs and JPMorgan.
Olaplex is a technology-driven beauty company that offers haircare products through a global omni-channel platform serving the professional, specialty retail and direct-to-consumer channels. The company’s haircare products focus on three key uses – treatment, maintenance and protection.
Olaplex’s products use bond building technology to repair disulfide bonds in human hair that are destroyed through chemical, environmental and ageing processes. Its product portfolio comprises 11 complementary products that are specifically developed to provide a holistic regimen for hair health.
Olaplex’s net sales increased 90% to $282.3 million in 2020 compared to 2019. Net income decreased 36% year-over-year to $39.3 million, mainly due to interest expense on debt incurred in January 2020. Adjusted net income rose 30% to $131.1 million in 2020.
Net sales increased 171% to $270.2 million for the six months ended June 30, 2021 compared to the same period in 2020. The company delivered a net income of $94.9 million for the first half of 2021 versus a net loss of $22.4 million in the year-ago period.
The company’s professional channel, which includes products used by hair stylists in-salon and products sold by hair stylists to consumers for use at home, comprised 55% of total net sales in 2020 and grew 59% from 2019 to 2020. The specialty retail channel represented 18% of net sales in 2020 and grew 75% YoY. The DTC channel represented 27% of net sales and grew 260% YoY in 2020.
Haircare represents a large addressable market with ample opportunity for growth. The global haircare market was sized at $77 billion in 2020 and it is expected to grow at a compound annual rate of around 6% from 2020 to 2025.
Olaplex believes it is well positioned to expand into the $633 billion beauty and personal care category. The company believes that its product offerings in categories such as skincare, which is a $140 billion global category, will appeal to customers.
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