Elf Beauty’s CEO fighting for more shelf space

Bloomberg

Elf Beauty Inc. is “just getting started,” according to CEO Tarang Amin.
The low-price beauty brand has “tremendous white space opportunity” and there are multiple avenues to take — and the company’s ready to back with investments in marketing, Amin said in an interview at Bloomberg’s New York headquarters.
“Any retailer we go into, we are among the most productive brands they will carry on a dollar-per-foot basis,” Amin said. As such, his number one priority is to fully realise the potential of Elf’s current retail partners, to “really maximise the business in the retailers that carry us.”
For instance, Elf products are in all stores at Ulta Beauty Inc., but the products are featured primarily in a shelf space of about four feet. There is opportunity to expand that. The same goes for Walmart Inc. — 4-feet of space, while other legacy brands there may have 30 feet.
“We have a long way to go to there,” Amin said, and one way to do so is to better push new products into retailers when they reset shelves each spring.
And new products are plenty:
last year alone, the Oakland, California-based company introduced approximately 120 items in as few as 13 weeks in colour cosmetics and skin care. But Elf products didn’t have an appropriate mix of new and existing products on the shelves, which hurt results.
Last month, Elf shares hit an all-time low, and analysts have gone sour on the stock. The company has a reputation of cutting growth targets, and has had a hard time competing with luxury brands, including Estee Lauder Companies Inc., which is up 10 percent so far this year.
Activists have begun to circle. Marathon Partners Equity Management delivered a letter to the company calling on the board to consider strategic options, while some analysts see the company worth up to $25 per share in a takeout scenario.
Another area with room for improvement is in “distribution gaps,” particularly within the drug store space. For instance, Walgreens has begun the roll out of Elf items, but the product is still not in most of their stores. At Rite Aid, Elf is only doing end caps — displays at the end of aisles — and even at CVS, Elf is mostly featured in a 3-foot end cap. So, door count — the stores the products are found in — and “the ability to expand doors both in the US and internationally” — is a top priority, Amin said.
“We know that when someone gets their hands on Elf, they love Elf,” Amin said. Yet even in the US, where Elf has been for more than a decade, “83 percent of consumers aren’t aware of Elf.”
While Elf is most associated with beauty, skin care’s a massive opportunity, Amin said. The proof of that’s already evident, he said.