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Marathon pushes for an elf makeover: WSJ
Posted on Wednesday, 12 September 2018 13:17
Marathon Partners Equity Management intends to publicly release a letter pushing for elf Beauty to kick off a strategic review and to overhaul its board to reduce the influence of 30.0 per cent shareholder TPG, the Wall Street Journal (WSJ) reported.
According to a draft letter seen by the newspaper, the activist investor would like the Californian discount professional cosmetics brand to either put itself on the block or restructure around core operations and cut costs.
elf was founded in 2004 to disrupt the traditional beauty model that comprised high prices, long product cycles and traditional advertising by connecting directly with consumers via elfcosmetics.com, where the first products sold for USD 1.00 each.
The company has since broadened its portfolio, increased its price range and become a multi-channel brand through its own stores and at Target, Walmart, Ulta Beauty and other retailers.
It claims to be one of the fastest-growing beauty companies in the US, with consumers helping boost visibility through word of mouth, their interactions in social media and reviews.
elf’s ecommerce site has over 28.00 million visitors a year, and the group has a following on Instagram, Facebook and YouTube that rivals the larger beauty brands.
TPG Growth came on board in 2014 after buying a controlling equity interest and, according to the letter cited by WSJ, the private equity house’s growth arm wields too much influence through three board representatives.
Ideally, Marathon would like a slate of new – and unaffiliated to the 30.0 per cent shareholder - directors to the board of the USD 637.59 million market capitalised company.
Shares of elf have ranged between a 52-week high of USD 23.85 and a low of USD 9.30, and finished at USD 13.40 yesterday, the last unaffected trading day before the WSJ report.
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