Cult Beauty founders look made up with sale plan

10 October 2019, 12:05 | Updated: 10 October 2019, 12:33

The co-founders of Cult Beauty, one of the UK's fastest-growing online beauty businesses, are heading for a major windfall after hiring bankers to explore options for the company's future.

Sky News has learnt that the company has hired JP Morgan to advise on a possible sale that would catapult the former fashion model Alexia Inge and her co-founder, Jessica DeLuca, into the ranks of the super-rich.

A formal process is not yet thought to have got underway, and may not lead to any transaction until next year.

Sources said that Ms DeLuca and Ms Inge, as well as Cult Beauty's external investors, could elect to sell some, rather than all, of their shares in the business.

Cult sells brands including Benefit, Drunk Elephant, GHD and Goop, the brand founded by Hollywood actress Gwyneth Paltrow.

Accounts for the year to May 2018 show that sales nearly doubled during the period to £68.9m, with operating profits virtually flat at £3.7m.

The company said its performance since the year-end had seen continued revenue growth, "albeit at a lower percentage growth rate than recent previous years".

Nevertheless, analysts believe Cult could be valued at hundreds of millions of pounds because of its growth trajectory and soaring demand among financial investors for high-quality digital consumer products businesses.

A number of other British beauty brands, including Charlotte Tilbury, are also exploring sale processes, while online players such as The Hut Group have seen their valuations soar through previous fundraisings.

Cult Beauty did not respond to several requests for comment, while JP Morgan declined to comment.