Hi, and welcome back to Line Sheet. I hope you’re relaxing. Or trying to relax? Tonight, I’m headed to Mozza to have a celebratory martini (what else) with my friend (and best-dressed Line Sheet reader) Natalie Krinsky, who just sold a big package—whatever that means!—to Amazon-MGM. (Kim Kardashian is going to star and produce.) One of my favorite stylists, Rebecca Ramsey, who is very low-key and will probably be slightly embarrassed to see her name mentioned here, is joining us. Send gossip that I can relay!

But before I start drinking, let’s talk about Glossier. I would call our correspondent Rachel Strugatz ([email protected]) the foremost expert on what is arguably the most influential consumer beauty brand of the past decade. In today’s edition, Rachel reveals something about the business that you absolutely need to know. Plus, I’ve got updates on two of our favorite topics: the fate of Condé’s beleaguered union members and the situation at Matches, which is getting weirder (if not as weird as whatever is happening with Kate Middleton).

Mentioned in this issue: Emily Weiss, Thrive Capital, Kyle Leahy, Danielle Carrig, Matches, Tracey Thomas Travis, Fabrizio Freda, Stéphane de La Faverie, Deirdre Stanley, Glossier, Alicia Sontag, Sephora, and many more…

• Just a heads-up, all remaining Outdoor Voices stores are closing on Sunday: Employees were laid off with no severance—everything is 50 percent off until then. I’ll have more on what’s going on there tomorrow. In the words of a brilliant Reddit commenter: #DidThings
• An unexpected turn of events for the long-suffering Condé union: On Tuesday at 11 a.m. ET, at least some of the editorial employees in the Condé Nast union who were meant to be laid off last year were told that they would be “reassigned” to a new team reporting to someone on the business side. It’s called the Central Content Unit. (Not joking.) In the meeting, Natalie Warganik, who works in human resources, explained to staffers that they were in a “moment of transition,” and were told to wrap up their current assignments over the next few weeks. As of Friday, they would technically be reporting to this new unit, with managers including Chris DiPresso, whose title is “VP of content finance and operations,” and Diana Benbasset, whose title is “project manager, corporate creative.” The union members were told that their current positions do not “exist in the future org,” and this reassignment was part of the transition.

  I reached out to both the Condé Nast union and Condé Nast’s comms chief, Danielle Carrig, for more information. The union public relations representative got back to me. Their contacts at Condé Nast said that my information was incorrect. (Which part, I don’t know.) Unfortunately, I never heard back from Condé Nast.

  Remember, of course, that this group of people hasn’t been laid off because management wasn’t technically supposed to lay off any union members until the two parties agreed on a contract.

  As of yesterday, no one knew what the new work would entail, but I wonder if management is creating some sort of loophole to be able to finally initiate the layoffs, which were supposed to happen months ago. (Management first handed the union a layoff list in mid-November.) My understanding is that a union member can be reassigned during this limbo period to a different brand or department, but your title and salary must remain the same. Maybe it’s a way to get these staffers off the individual brands’ books while negotiations between management and the union continue.

  While it’s been absolute torture to see it all play out, the union has argued that the delay was beneficial: not only did the affected members continue to get paid, but they also had more time to look for new jobs. Yes, sure, but now they have to deal with this.

• Things are going further south at Matches: The messages coming out of the for-sale, practically bankrupt luxury retailer are almost as strange as that Twilight Zone-y “amateur photographer” note that Kate Middleton posted to Twitter regarding her doctored (British) Mother’s Day photo. (I think I know what happened, by the way. It involves a bag. That’s all I’m going to say.) On Monday, brands looking to get paid by Matches—whose owner, Frasers Group, put it up for sale last week—were told that they had to email the folks at Teneo ([email protected], to be exact) with documentation proving that they were owed money. If their contract says that they technically own the goods until they are paid in full for them, then said brand might be able to go to the Matches warehouse (in the U.K.!) and retrieve the remaining stock. “We aren’t totally sure if this will work or not, but we think it’s worth a try at least,” the person writing the email said.

  On the customer side, things are bad, too. The whole point of Frasers laying people off and putting Matches into administration, as they call it in the U.K., was to continue trading. The problem: If you purchased anything after March 8, you cannot return it. (I heard that the team in charge of processing returns was let go immediately.) For instance, a friend of mine bought two very expensive items—at a discount, luckily—and was told “there are no exceptions to this, we sincerely apologies [sic] for any upset or inconvenience this may cause. Unfortunately we are unable to assist you further.”

• Estée executives at odds: I’m hearing that the already strained relationship between top Estée Lauder Companies executives is deteriorating further and, alas, more publicly. To wit: C.F.O. Tracey Thomas Travis will not present alongside C.E.O. Fabrizio Freda at tomorrow’s UBS Global Consumer and Retail Conference. Instead, Freda will be joined onstage by Jane Hudis, an executive group president at Lauder who oversees some of its biggest properties, including Tom Ford Beauty, La Mer, MAC Cosmetics, Clinique, and the forthcoming Balmain Beauty. I think Jane is great, but people close to the company thought it was bizarre to have Hudis co-present instead of Thomas Travis, especially right now. “Tracey and Fabrizio are not seeing eye to eye,” an insider said. (Another person close to the company told me this is total B.S., citing a conference last year where Freda and Stéphane de La Faverie, another executive group president at Lauder, spoke together at a “fireside chat.”)

  Among the explanations, another source told me Thomas Travis has been trying to clean up Freda’s mess involving product purchased outside of China and then resold in the country (a.k.a., daigou), which led to a class-action lawsuit alleging that ELC misled investors about revenue guidance last year. In the process, this source suggested, Thomas Travis came to feel “that she’s been complicit.” Others said that the tension stems from senior leadership thinking that Thomas Travis’ outside commitments– which include sitting on the board at several companies, including Meta, Accenture and Columbia Business School– are detracting from her focus at Estée. “There are people who think Tracey’s not showing up as a leader. Everyone wants everyone totally in the trenches. The C.F.O. of ELC is a 24/7 job,” a source close to the company said. Lauder declined to comment.

  Speaking of legal troubles, Lauder’s extremely well-regarded executive vice president and general counsel Deirdre Stanley just gave notice, and allegedly it’s not the first time she’s tried to quit. Stanley joined the company right before Covid, replacing Sara E. Moss, who was promoted to vice chairman at the time (and who retired last year). “The family piece was not always easy to navigate, and I can’t imagine having her predecessor there, but in a different role, was easy either,” an insider with ties to senior leadership said. —Rachel Strugatz

In its second life, after a few tumultuous years of declining sales and lots of layoffs, Glossier has turned a corner thanks to newish C.E.O. Kyle Leahy, a massive wholesale rollout at Sephora, the ditching of an expensive in-house tech platform, and a renewed focus on product development. Now, Glossier is considering an exit, and it has hired a bank to serve as a financial adviser. “No formal process is happening yet,” a source said, but people familiar with the matter say Glossier is at a place where it could “benefit from a transition in ownership.”

Obviously, it’s time for an acquisition here. Glossier is no longer a startup, and it needs the support of a parentco that can scale its Sephora business, facilitate its entrance into new retailers, and extend its global footprint. “The most successful way for all of that to happen is with a strategic partner to help roll that out. They’re at a place where hopefully it’s an option,” a person involved with the brand told me. “If we were able to land this in the hands of a great buyer who could continue to build out the business, that would be such a win.”

When I talked to Leahy earlier this week, she naturally declined to comment on the sales or banker speculation and offered some polite C.E.O. pablum. “We are in the business of long-term, sustainable, consistent, profitable growth. We’ve been delivering for the last two years, and that’s what we’ll continue to deliver, and that gives us longevity that actually gives us a lot of options,” Leahy said.

This is not the first time, of course, that Glossier has entertained the possibility of a sale. The Estée Lauder Companies were reportedly in talks to buy the brand several years ago, when its valuation was under $1 billion, well before the Series E, but Freda wasn’t sold on Weiss’s millennial pink universe. (“Fabrizio did not like ‘community’ brands,” a source said.) If Glossier continues on its current trajectory, a sale could surpass that $1.8 billion valuation, ensuring that even the last money in would produce a healthy multiple. After all, the current market is likely enticing the boardroom to explore its options. Last year, Aesop was acquired by L’Oréal for $2.5 billion, and Creed was acquired by Kering for approximately $3.8 billion. Meanwhile, strategics (with the exception of Lauder) still have plenty of money to spend. Glossier also doesn’t have that much competition; of the several desirable beauty brands on the market now, most are less than half its size. The only other brand to look out for could be Selena Gomez’s Rare, which I heard is on track to overtake Charlotte Tilbury this year as Sephora’s bestselling brand.

The brand has managed to successfully transcend generations. Glossier started as the quintessential millennial-founded brand that then became popular among Gen Z, especially during the pandemic. The brand’s Cloud Paint and cleansers are just now trickling into the hands of Gen Alpha’s rapid beauty shoppers, who also happen to love Sephora.

The launch into Sephora last February was a success by any metric. In 2023, the retailer drove about $50 million in revenue for Glossier, which was about 50 to 70 percent above plan. The rest of the brand’s 2023 revenue, or about $175 million, came from direct channels, including Glossier’s website and stores, of which there are soon to be 12 (a Vegas door opens in April). Continued wholesale expansion remains a priority, especially globally, where distribution has been limited. Glossier will enter Sephora in Mexico and other markets this year, and I also heard Glossier will launch at Mecca, which operates over 100 doors in Australia and New Zealand. “We even missed demand because we were out of stock,” Leahy told me. “We were chasing inventory for a good portion of last year.”

When I really think about why Glossier worked—and most other beauty lines that followed have not—it comes down to Weiss’s borderline maniacal focus on brand. It’s not about the products; frankly, it doesn’t matter how good they are, as long as they’re not terrible. The line’s voice, aesthetic, and essence was clear in everything it touched, from product launches to merch, and was probably best executed in its own stores, which as of last year still had lines to get in. But if brand is critical to success, it’s not sufficient, either, which is why Weiss was given an emeritus role and Leahy is focused on scale. There’s a lot of investor money now looking for an exit.

Until then,
Lauren