This document contains privileged and confiden5al informa5on. If you are not the intended recipient, you are hereby no5fied that the use of this informa5on or dissemina5on, distribu5on or copying of this document is strictly prohibited. If you have received this document in error, please no5fy the sender immediately by email and delete this document.
Next genera5on beauty & personal care
May 2017
v05.01.2017
Mission
To significantly improve conven4onal beauty and personal care tools & methods through innova4on, technology and design
1st product line -‐ blendSMART
The first-‐ever, mul4-‐func4onal, rota4ng makeup brush that solves the biggest challenge with makeup....an easy, mistake-‐free applica4on
New product pla:orms
Leveraging both our product designs and patent porAolio, launches are planned for personal care devices & high-‐tech beauty devices and soBware
Our Company
Overview
• First product line launched in 2015 / improved version in 2017 • New enhancements & high-‐tech plaAorms planned for 2018-‐19
Sales history
• First year (2015) sales of $531,000 restricted by 1-‐year QVC exclusive • Second year (2016) sales of $1.37 million restricted by 8-‐month Sephora exclusive
blendSMART Snapshot
CompeAAve advantages
• First-‐of-‐its-‐kind innova4on delivers immediate, demonstrable benefits • U.S. u4lity and design patents issued + interna4onal patents and con4nua4ons pending
Market validated
• Over 90,000 units sold in 6 countries in the past 2 years • Award nomina4ons, organic 4-‐star customer reviews, and features in publica4ons like the WSJ
Significant upside potenAal / whitespace
• Direct-‐to-‐consumer (D2C) sales • Expansion into new geographies and channels • New product extensions, add-‐on’s and product lines
blendSMART Snapshot
• USA • Sephora.com • Herrington Catalog – confirmed holiday
2017 – in-‐catalog with over 6 million catalogs mailed annually
• Dermstore.com – 3 PO’s in the first six weeks
• Beauty Bar.com – Amazon affiliate • Sharper Image.com • Dillard’s – 32 store test-‐ may launch • Von Maur – full 30 store roll-‐out • Boscov’s – 12 high performing stores – fall
launch • Stanley Korshak – Dallas – premier retailers • Kuhl-‐Lincomb – Houston -‐ premier retailers • Maison-‐Weiss – regional department store
in Mississippi • Cosme5c Market – regional beauty chain 5
stores • Addi5onal – 32 independent specialty stores
• UK • Cult Beauty – UK – pending • ASOS – UK – pending • Harrods’s – UK – pending
• Middle East • Boots 48 outlets • Binsina 52 outlets • Aster 231 pharmacies • SUPERCARE 28
• Europe • Romania – two brick and mortar and on-‐line
outlet • Sephora.com France • Sephora.com Italy • Sephora.com Spain • Sephora.com Monaco • Sephora.com Luxembourg • Douglas – 800 total stores – test pending
• South Korea • Direct TV Pla`orm and Duty-‐Free Shops –
opening order 300 units and preform a 500,000 USD sales first year
• Trinidad
• Jamaica
• Hong Kong
• New Zealand
• Israel
• South America
Current + Pending Retailers
The Problem
• Focus groups agree the biggest problem when applying makeup is achieving a natural-‐looking, flawless result every 4me
• Common “mistakes” include lines, uneven or too much color • Exis4ng solu4ons require honed skills taught on YouTube or by in-‐person pros
Current Opportunity
Available alternaAves
• Tradi4onal brushes are only as effec4ve as user’s technique • Sponges waste makeup, collect bacteria, and are difficult to clean • Air brushing is messy, noisy, and expensive • Fingers are unhygienic and pull on skin
blendSMART
• First-‐ever, patented rota4ng brush head applicator • Delivers immediate, demonstrable benefit & results • Blends makeup evenly with no lines or streaks • No skill or learning curve required
15-‐language EU French-‐English All English
Our Solu<on
business SMART
• Interchangeable brush-‐head system (razor/razorblade model) • Technical improvements to promote upgrade sales • Colors and pakerns to promote newness and interest • Incremental add-‐on’s to promote upselling & con4nuity sales
QVC
• Nominated for 2015 Best Innova4on Beauty award • Sold 25,000 sets (2015)* + 62,000 sets (2016) in 4 countries
Press & customer feedback
• Sephora 99 reviews averaging 4-‐stars + 10K “loves” • Endorsements from the WSJ, Vogue, and more
Retail & Online Sales
• Launched with Sephora.com (US & Canada)** • Sold approximately 8,000 units in 2016 • Launching Sephora EU (13 countries) expected Summer 2017 • Launching in 60 dept store loca4ons Spring 2017
Market Validated
* 2015 sales limited by year-‐long exclusive ** 2016 sales limited by 8-‐month exclusive
Market Validated
Before ASer “I thought I would give this a try and fell in love with it. It makes my foundaAon go on smoothly and I don’t use as much foundaAon as I was using with a regular brush.” -‐ Sephora Customer
“I have NEVER wriZen a review on here, but I felt the need with this product!! It is AMAZING and nothing has EVER blended my foundaAon so beauAfully. I am IN LOVE!!! It is worth EVERY penny!” -‐ Sephora Customer
“We absolutely love blendSMART, not only is it moving in-‐store, but it is helping us sell more foundaAon makeup." Jessica CraB, Cosme4c Buyer, Stanley Korshak, Dallas, Texas
“This brush is amazing...You also have to use a lot less foundaAon...” -‐ QVC Customer
“I have been a makeup junkie my whole life and I haven't been this excited about a product in a long Ame.” Lisa Williams, Chakanooga, TN
Market Validated
Our products
• Follow mass success of automated skincare* and oral care tools • First-‐mover advantage building the brand worldwide • Dynamic interna4onal patent and trademark strategy • Improved 2nd genera4on just launched + pipeline set for next-‐gen
* Items pictured are Foreo (pink) and Clarisonic, purchased by L’Oreal for a est. $800M in 2011 (8x mulAple)
Compe<<ve Advantages
Our company
• Scalable distribu4on infrastructure and processes in place • Mul4ple factories experienced with demanding brands like L’Oreal • Outside experts secured for product design, packaging, and infomercials
* StaAsta.com
Global market overview
• Global cosme4c market size est. $500 billion / US at $62 billion* • $2 billion yr-‐over-‐yr growth just in the US* • Global brands con4nue focus on product innova4on in order to akract new
customers and keep exis4ng customers brand-‐loyal • Tools & devices is one of the fastest growing beauty categories
Significant Upside / “White Space”
Large target market
• All markets concurrently – luxury, medical and mass • Core market (35-‐75 yrs. old) / Secondary market (13-‐35 yrs. old) • “Everyday gal” to makeup-‐savvy women • Men (grooming) and children (sunscreens)
* promotes conAnuity sales (e.g., “razor / razorblades) and brand loyalty
Diverse complementary channels
• Online – direct to consumer • Home Shopping – expanded offerings and geographies • DRTV – $100 million poten4al in 4 years • Retail – expand number of “doors” and sell-‐through
Significant Upside / “White Space”
Expansion & extensions potenAal
• Specialty brush heads* • Specialty makeup formula4ons* • Line extensions • New product lines (confiden4al)
Notes: • Accrual-‐based • Retail revenue (i.e., “at register”) was over $4 million in 2016 • 2015 & 2016 Gross Margin impacted by 50-‐50 profit-‐sharing arrangement w/ QVC partner (terminated) • Not reflected: manufacturing efficiencies star4ng Q3 2018 • Not reflected: specialty formula4ons • D2C and DRTV revenue and expenses are es4mates only
Financial Overview
Current business profile
3 Year business profile
Financial Overview
Retail
Online
Home Shopping TV
Mass Market Retail
DRTV (infomercials)
Seeking support to capture growth opportuniAes • Support distribu4on for 20 countries by the end of 2017 • Build our online D2C capabili4es and required inventory • Expand and extend our planned product lines
Retail
Online
Home Shopping TV
Mass Market Retail
DRTV (infomercials)
Posi<oned for Growth
Growth plan
• Digital marke4ng and PR • Direct-‐to-‐consumer sales • Con4nuity sales • New products & plaAorms
Plan for significant margin improvement
• Elimina4on of less profitable partnerships (complete) • High-‐margin product add-‐on’s in the pipeline • Refined product & packaging design • Direct factory rela4onships
Our strategic partners
• 12-‐year old product development/distribu4on company* currently provides infrastructure and processes
• Mul4ple factories that work with demanding brands like L’Oreal
Our team
• Steve Machiorleke – 32 yrs. business experience with exper4se in product development, outsourcing & IP strategy
• Lori Machiorleke – 30 yrs. experience in sales, marke4ng, PR, and large retail account management
• Charles Wu – 25 yrs. experience with sourcing, QA/QC, and logis4cs support; US ci4zen based in China
• Scok Brient – 18 yrs. prac4cing patent law; BSEE degree • Kyle Globerman – 18 yrs. prac4cing patent law; BSME degree
Worth Beauty Team
* Closely held company co-‐owned by 2 Worth Beauty owners. Designs and outsource-‐manufactures in China; distributes in US to customers such Home Depot, Menard’s, Home Decorators Collec4on catalog, Hayneedle and more.
Funding will be used for key hires
• Digital marke4ng • Product development • Graphic design and packaging • Opera4ons, finance and accoun4ng
PosiAoned with strong compeAAve advantages
• Timing follows mass acceptance of automated tools in skincare • Product line delivers immediate, tangible results/benefits • IP founda4on laid to keep building dynamic patent porAolio
Seeking support to capture growth opportuniAes • Support distribu4on for 20 countries by the end of 2017 • Build our online D2C capabili4es and required inventory • Expand and extend our planned product lines
Summary Market validated & fast revenue growth potenAal
• Over 95K sold in less than 2 years – QVC, Sephora and more • Proprietary advantages in place for rapid global growth
For more informa4on on the company and investment opportuni4es, please request our investment deck by contac4ng Steve Machiorleke at 713-‐702-‐8117 or [email protected]
© Worth 2017 Beauty, LLC
blendSMART is a registered trademark of Worth Beauty, LLC
US AND INTERNATIONAL PATENTS AND PATENTS PENDING
More Informa<on
This document contains privileged and confiden5al informa5on. If you are not the intended recipient, you are hereby no5fied that the use of this informa5on or dissemina5on, distribu5on or copying of this document is strictly prohibited. If
you have received this document in error, please no5fy the sender immediately by email and delete this document.
