Hi, and welcome back to Line Sheet. The Cannes Film Festival has begun in earnest and lasts longer than any of us could ever imagine. Send me your picks for best dressed and biggest rule-breakers. (Don’t forget, nudity and voluminous gowns are prohibited this time, on top of the standard evening-wear-only directive.) Today is Rachel “Rachel@puck.news” Strugatz Day, and she’s here with a story of a new strategic player in beauty M&A. As we all know, the past year has been a bit of a snooze on the deal front. And yet Church & Dwight, the owner of Nair (yup) and other unsexy brands, has emerged as a real contender in the acquisition space, with exit-hungry founders vying to grab their attention at every turn. Meanwhile, our man on Wall Street, Bill Cohan, explains the realities of Saks’s latest attempt to make its $120 million debt payment, due in June. And I’ve got some more deets on the business of Satisfy, as well as the latest from London on Burberry’s turnaround efforts. Mentioned in this issue: Church & Dwight, Touchland, Andrew Lisbona, Sol de Janeiro, Vennette Ho, Sephora, Ulta Beauty, Saks, Richard Baker, Burberry, Josh Schulman, Daniel Lee, and many, many more…

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Three Things You Should Know…

William D. Cohan

The latest on the Saks sitch: Things have only gotten worse at Saks Global. As I reported a few weeks ago, Saks has been talking to financial and legal advisors in order to begin digging out of the mess that Baker et al. created. At the time, the company denied to me that any such discussions with outside advisors, including PJT Partners—my old friend Paul Taubman’s firm—were underway. This Monday, however, Bloomberg reported that Saks Global had hired Kirkland & Ellis for legal advice and, you guessed it, PJT Partners for financial advice, “to explore ways to raise new financing” alongside the first-in-last-out loan that, as I’ve reported, Saks was looking to carve into its existing asset-based loan from Bank of America. No offense, but I am highly skeptical that the assignment for Kirkland and PJT is to find new financing. There is rarely new financing available for a company that is already as highly leveraged as Saks Global. Needless to say, that $707 million in promised EBITDA is far from materializing, according to my sources, and is shaping up to be closer to $50 million of EBITDA in 2025. That’s not nearly enough to cover the interest payments on the more than $4 billion of debt. That’s why there’s so much concern about whether Saks Global will make that first interest payment on the bonds next month. Yes, Saks does have around $400 million of availability under its asset-based loan, as it told bond investors in a call two weeks ago. But I’m not sure an ABL line is supposed to be used to make an interest payment on another unrelated security. But we shall see.Both Kirkland and PJT are premier restructuring advisors, and are usually hired to fix the balance sheets of troubled companies rather than raise new financing. I think the “explore ways to raise new financing” phrase, as reported by Bloomberg, could be a canard to give cover to what’s really about to happen here: a full-fledged debt restructuring to avoid bankruptcy. That is what the bonds are signaling: They’re trading at 59 cents on the dollar and yielding nearly 28 percent. (A spokesperson at Saks Global declined to comment.) [Continue reading online.]

Never Satisfy-ed: In last Thursday’s issue, accessible exclusively to Inner Circle members (trade up here), I wrote about Paris-based activewear challenger Satisfy. The company recently raised $11.76 million in a funding round led by private equity firm 1686 Partners, which is run by Chanel heir David Wertheimer. Earlier this week, I caught up with Satisfy C.E.O. Antoine Auvinet, who formally joined the company in late 2024 after consulting for about a year. While he would not share the company’s current valuation, he did let me know that the business, founded by April77 creator Brice Partouche, is set to double sales to something like $24 million in 2025. Auvinet also said the plan is to use the proceeds to meaningfully develop shoes—the real moneymaker in sports—and that Satisfy will enter the women’s market later this year. (Much of the product is already unisex, but it’s not something they’ve communicated on much.) Anyway, the Satisfy Series B got me thinking more broadly about small brands raising significant capital. A lot of these brands are raising at valuations that equate to a 5x to 8x multiple of current revenue, which seems like a lot in this environment, and more like the old tech valuations that used to be applied to D.T.C. product companies. (Again, I still don’t know Satisfy’s valuation. If you do, call me.)Remember, founders don’t actually want high private valuations. Sure, it sounds cool to bandy about a big number, but the new capital creates dilution and adds new preferred investors in the waterfall. A headline number can also hurt a founder if they have to sell in a down market. But an investor in this space suggested that founders are currently seeking higher valuations to harvest the cash in a difficult economy and take a little money off the table for themselves. In the end, many are more realistic than their predecessors and not looking for a moonshot outcome.

How’s that Burberry turnaround coming along?: We have now entered the cost-cutting, unsexy phase of Burberry C.E.O. Josh Schulman’s journey to fix the business, which was decimated by a series of poor decisions. For example: Former executives essentially yanked out the sales engine (margin-drivers like scarves, etcetera) and let runway designers dictate everything from product to marketing. After his arrival last fall, Schulman was able to instantly lift morale by simply stating a plan: focus on the functional hero products (scarves, trench coats, tartan bikinis) and being a luxury outerwear brand rather than chasing some sort of designer nirvana that doesn’t exist. The new tagline? “It’s always Burberry weather.”The company is referring to Schulman’s turnaround plan as “an intervention.” Just a few months in, designer Daniel Lee’s February runway show—classic in every which way—received good reviews by pretty much everyone other than Cathy Horyn. From that, orders from retailers increased by double-digit percentage points. Better merchandising and marketing campaigns—the current one features very British actors from Rivals and the like—are essential in order to get this company in shape and sellable. But Schulman also announced that Burberry would be cutting 1,700 jobs, starting in one of the U.K. factories and heading all the way up to the corporate offices. Unsurprisingly, the market reacted favorably to this news, with shares rising 18 percent.Despite news of job cuts, Schulman’s arrival has indisputably created a clouds-parted vibe. He is very much being painted as a savior in this situation, not a villain. This week in Los Angeles, the company will continue on its very British marketing scheme with a series of events celebrating a new collection designed in collaboration with Highgrove Gardens, King Charles’s private residences. The party starts in the late afternoon at Richard Christiansen’s Flamingo Estate, followed by a dinner co-hosted by Christiansen. What do they say in Britain? Keep calm and carry on?

Now here’s Rachel…

The Condom Guys’ M&A Strategy

Church & Dwight has made a fortune on the glitter-free side of the CVS aisle—baking soda, acne cream, condoms—but with its stake in Zoomer hand sanitizer brand Touchland, it’s revealing a glimpse of its novel acquisition strategy while showing there are signs of life in beauty M&A.

Rachel Strugatz

On the same day that the Trump administration agreed to temporarily cut China tariffs from 145 percent to 30 percent, C.P.G. giant Church & Dwight agreed to pay up to $880 million for Touchland, the first-ever brand to make hand sanitizer cool. The deal stipulates $700 million at closing with a $180 million earn-out based on this year’s performance—heavy cake, indeed, and a monument to the brand’s Power Mist hydrating hand sanitizer, which has become a status item for young people. Almost everything about Touchland speaks to Gens Z and Alpha: It’s cheap, it’s fragrant, it’s collectible, and there are collabs (Hello Kitty, Disney, etcetera). There are even accessories for toting around your mists, including $6 silicone cases and $20 neoprene Touchette pouches, like Rhode’s now internet-famous lip gloss phone cases. It’s the anti-Purell. Touchland has steadily gained momentum since 2018—particularly during Covid, of course—but only in the past year and a half has the brand really taken off. Net sales for the 12-month period ending March 31 were $130 million, and the line is already incredibly profitable: EBITDA was about $55 million for the same period. In January, Touchland expanded beyond its core sanitizer and introduced proper fragrance in the form of body and hair mist, à la Sol de Janeiro.

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What’s really interesting, however, is Touchland’s new parentco: Church & Dwight. About two and a half years ago, the conglomerate paid $630 million for Hero Cosmetics, the maker of those clear acne patches you see everywhere—a price that put the industry on notice. That deal was a Vennette Ho special. But Church & Dwight, of course, is better known for its decidedly less zeitgeisty portfolio companies: Arm & Hammer, Trojan, OxiClean, and even Nair. Is this the new dark horse of beauty M&A?

“The Swings Have to Be Real”

Since the Hero acquisition, I’ve wondered whether Church & Dwight would do more deals in the space. “They hadn’t taken a management presentation since Hero, and not because they’re off M&A,” a person familiar with Church & Dwight’s business told me. “What came across hasn’t made sense for their strategic rationale. If it’s right, they’re going to do it, but the swings have to be real and big and have white space. It has to move the needle.” This person noted that the company continues to perform well and has the balance sheet to support accretive acquisitions. It’s easy to see why Touchland makes sense here, but this person also pointed out a single caveat: Church & Dwight has always been anti-trend, and while hand sanitizer is not trendy, the whole fragrance component feels very right now. Trend or not, Touchland’s magic is in its positioning. Founder and C.E.O. Andrea Lisbona merged the concept of hand sanitizer (an unsexy commodity) and fragrance. She’s also marketing this fragranced sanitizer as “skin-forward,” another clever way for Touchland to be perceived as beauty-adjacent so it can share shelf space with traditional beauty categories. Even though it costs just $10, Touchland looks and feels elevated, which is the real reason it’s sold at places like Sephora and Ulta Beauty. But Touchland’s true power is evident from its vast distribution––it’s sold on Amazon, TikTok Shop, Target, Ulta Beauty, and Sephora, which almost never happens. After the Touchland deal was announced, I asked industry insiders whether this was finally the dawn of a new era of M&A in the space—an era, of course, that I’ve been presaging for some time, even if it hasn’t entirely come together as planned. Beyond Church & Dwight now sitting on strategic buyer lists for a whole new group of businesses, this sale instantly lit a fire under almost every C.P.G. Strategics generally exist in competitive tension with one another, and even one player making a move could catalyze the rest to act quicker than they might have a week ago. Clorox, Kimberly-Clark, Colgate, Johnson & Johnson, Beiersdorf, etcetera are now probably more likely to jump on acquisition targets in waves, simply because they have to keep up.

Zooming out, the combination of a sizable strategic deal and (temporarily) reduced China tariffs is a happy turn of events for the beauty brands that spent the past six weeks revamping financial models and mentally preparing to lose millions of dollars. The same people who’ve been agonizing about whether they should pause or postpone their sale processes are suddenly more optimistic, however cautiously. Overall, strategic beauty deals are starting to look different than the more predictable acquisitions of years past, in terms of both buyers and sellers. If you look at the three most recent strategic transactions in the past five months—Church & Dwight’s purchase of Touchland; Bic’s acquisition of Tangle Teezer, a line of hairbrushes; and Helen of Troy’s deal for Olive & June—two major themes emerge: They’re all mass-priced brands, and none of the acquirers are classic beauty players. We may be entering a landscape that no longer favors prestige—perhaps the most vulnerable sector of the market during major economic downturns. In a constricted macroeconomic environment, commodities that became slightly more premium (like Touchland, or even Vacation sunscreen) are very interesting.

What Rachel’s Reading…

More on Shiseido to come very soon, but in the meantime, Brennan’s piece on the curse of the Sephora tweens is a good read. [BoF] Cassandra Grey launched a perfume that costs $1,100. [Violet Grey] To quote Pavement, a band that Tom Cruise has definitely never heard of: “No big hair!” [Hung Up]

Until tomorrow, Lauren P.S.: We are using affiliate links because we are a business. We may make a couple bucks off them.

Puck fashion correspondent Lauren Sherman and a rotating cast of industry insiders take you deep behind the scenes of this multitrillion-dollar biz, from creative director switcheroos to M&A drama, D.T.C. downfalls, and magazine mishaps. Fashion People is an extension of Line Sheet, Lauren’s private email for Puck, where she tracks what’s happening beyond the press releases in fashion, beauty, and media. New episodes publish every Tuesday and Friday.

Puck’s daily art market email, anchored by industry expert Marion Maneker, offers unparalleled access to the mega-auctions and galleries, elite buyers and sellers, and the power players who run this opaque world. Wall Power also features Julie Brener Davich, a veteran of Christie’s and Sotheby’s, who provides unique insights into how the business really works.

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