Unilever Prestige chief executive officer Vasiliki Petrou continues to bet on the power of high-end hair care — especially when innovation is involved, she told WWD in an exclusive interview.
Unilever inked a deal to acquire buzzy hair brand K18 for an undisclosed amount in December.
Petrou said the deal, expected to close this quarter, was about supercharging growth in Unilever’s prestige division and leveraging K18’s innovation capabilities. The hair care company holds the global exclusive license for the keratin genome, which led to the creation of its trademarked molecule K18Peptide. Unilever will acquire that peptide, as well as K18’s global exclusive license for the map of the keratin genome. The performance, as demonstrated in the viral #K18HairFlip campaign on TikTok, catapulted the brand to social media stardom shortly after its founding in late 2020.
Related Articles
“I love that it’s a disruptor primarily in the salon market, and what stands out for them is the way they market biotech. It’s such a complicated subject on its own, but they do it in the most fun, entertaining and education-rich way,” Petrou said. “The team has speed, passion to innovate, make an impact and has an entrepreneurial attitude to life, which fits a lot of Unilever’s culture.”
Unilever Prestige has seen 11 consecutive quarters of volume-led growth as of the third quarter of 2023 — success she credits to her knack for plucking the right brands rather than launching new ones. “I’m a big believer in the luxury of acquiring versus incubating,” said Petrou.
“I believe in authenticity, I believe in a founder’s vision, and that would be difficult to replicate by incubating a brand,” she said. “When we acquired Dermalogica, it had been on the market for 25 years. It’s a gold mine of education and expertise, and we train 100,000 therapists globally. If we tried to replicate that [in-house], we would need a significant amount of time to get that to the right stage.”
K18’s goal is to supercharge its global growth with Unilever’s capabilities. “K18’s vision and ambitions have always been global,” said Suveen Sahib, who cofounded the business with Britta Cox. “While we had the people, for us to take our playbook to the next level, it was a natural development to work and align ourselves with partners that have that understanding.”
Though Sahib declined to quantify dollar sales, he said the business had roughly grown 100 percent in 2023. As previously reported, industry sources estimated K18’s net sales surpass $100 million.
K18 is eyeing a few key markets, Sahib said; though it is already sold in 100 countries, there is potential for the brand to go much deeper.
“They have a much deeper understanding of Asia, Latin America and Brazil,” Sahib said.
K18 was a key beneficiary of the pandemic-induced hair care boom, and those sales have only continued to swell. According to Circana data for the nine months ending Sept. 30 sales were up 14 percent — the same growth rate as skin care.
“There was a big market that was underdeveloped in premium and selective retail with hair care. That’s why we bought Living Proof. It’s a $16 billion category with growth potential — the market will develop more than what we’re seeing,” Petrou said.
Now that she has two hair care brands under her purview, Petrou said she’s more concerned with growing each than with differentiating one from the other. “The brands are quite differentiated. Every brand is uniquely positioned, and every brand competes in the market. The market is huge, and if we don’t cannibalize ourselves, the competition will,” Petrou said. “My philosophy has always been playing to the market, addressing benefits the people want, being culturally relevant. People will choose what’s best for them.”
In 2024, sources expect fresh entrants into beauty’s M&A market — evidenced by Kosas’ exploration of options, reported last week. Though Petrou didn’t rule out Unilever making more acquisitions this year, she said it would depend on the offering.
“It’s much more of a brand play than a timing play. We are very selective, careful and patient. The timing has to be right for the founder, and there has to be chemistry between the company buying and the company selling,” she said.
As for what Petrou looks for in a brand, she’s narrowed down her criteria to a few key tenets. “We need brands that have a long-term sustainable life where we can also add a lot of value. We have this long funnel,” she said. “We’re very diligent about filtering it down and making sure the brands are going to lead for the next 20 to 30 years.”