Inc. Magazine – September 2019

INC. BRANDED CONTENT/TSG CONSUMER

A TRUE PARTNERSHIP

APPROACH TO

PRIVATE EQUITY

Created by Inc. Studio and commissioned by

Seven years ago, IT Cosmetics was a startup with two co-founders

and a QVC-featured beauty line. Although the $35 million company

was profi table and growing quickly, CEO and co-founder Jamie Kern

knew she needed more than a cash infusion. She needed a guide

with beauty industry expertise to take her company to the next level.

TSG’s consumer products knowledge base was a perfect fi t, Kern

says. Not only was TSG “exceptionally entrepreneur-friendly,” but

the team had the experience to help IT Cosmetics grow. Kern says

that having a value-added partner to help with the company’s stra-

tegic vision, improve back offi ce processes, and provide access to

professionals with decades of experience running some of the most

successful beauty brands in the world made all the difference.

“It’s hard to see anywhere we grew without their involvement, as

we worked so closely with them and they added so much value,”

she says.

IT Cosmetics is now the second-largest prestige makeup brand in

the U.S. and was the largest acquisition in L’Oreal’s history when

it was purchased for $1.2 billion in cash in 2016.

MORE THAN INVESTORS—TRUE PARTNERS

IT Cosmetics’ experience isn’t unusual. “TSG brings to the table

so much more than capital,” explains Hadley Mullin, TSG’s senior

managing director. “We view ourselves as a resource to help our

partner companies accelerate their growth.”

That partnership approach is just one way TSG

differentiates itself from other consumer-focused

private equity fi rms, says Jamie O’Hara, TSG

president. “We’re focused on tripling companies

in size through good, old-fashioned growth, not

cost-cutting.”

Other competitive advantages TSG offers include

consumer and digital marketing expertise, a

global approach and reach, and true gender bal-

ance across the fi rm, adds TSG CEO and founder

Chuck Esserman.

TSG is a leader in driving product innovation,

guiding channel and geographic expansion, and

enhancing consumer loyalty by amplifying its

partner companies’ brand DNA. Many of TSG’s

investment professionals come from consulting

fi rm Bain & Co. and leverage their operational

know-how to accelerate growth.

Esserman is quick to point out that while expertise

is important, so is integrity. “At TSG, the ethics and

lack of ego is very different [from other private

equity fi rms], which leads to real friendships and

relationships with founders,” he says.

A TRACK RECORD OF SUCCESS

While the IT Cosmetics deal was certainly a home run for all, it is

just one of many successes for TSG. Planet Fitness, a thriving

chain of fi tness centers, is another TSG success story. The com-

pany has tripled its total number of gyms, has a market cap in

excess of $7 billion, and has seen its stock value increase almost

12 times since its partnership with TSG.

Since TSG invested in REVOLVE approximately six and a half years

ago, the clothing company’s revenue and profi t have grown more

than seven-fold. REVOLVE was also able to build a portfolio of 21

owned brands. REVOLVE’s June 2019 IPO valued the company at

$1.3 billion, and the share price increased substantially immedi-

ately following the IPO. Many other companies, including Vitamin-

water, Dutch Bros. Coffee, Huda Beauty, and Duckhorn Wine

Company, have turned to TSG for help in building their brands.

TSG continues to seek out investment opportunities with fast-

growing consumer brands, Esserman says. He expects TSG to ex-

pand its investments around the globe in the coming years. “What

we’ll be doing is what we’ve been doing,” he says. Because it works.

TSG has a roster of brand-name investments. But its most valued assets are its relationships.