Dossier is looking to expand the beauty empire it built off of dupe fragrances with the help of new backers.
Private equity firm American Pacific Group made what it described as a “strategic investment” in the company, alongside founder Sergio Tache and other existing shareholders.
Terms of the deal were not disclosed, but the investment is believed to be for a controlling stake.
Tache, who is also chief executive officer of Dossier, will continue to lead the business into its next phase.
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The plan is to keep the fragrance company’s already dramatic growth rolling by adding more products, more categories and more pathways to the consumer.
For Tache, it’s a chance to build on the original vision of Dossier, which was incubated in collaboration with Otium Studio and launched in 2019.
“It started from a very simple observation,” the CEO said. “The perfume industry didn’t make a lot of sense to us. It didn’t make a lot of sense that to go out and smell nice on a date, you had to fork over $150, $200-plus to get a good perfume.
“What we set up to do is really create the same quality perfume as all the luxury brands, taking the same great ingredients, the same great craftsmanship, made in France, but removing all the fluff and really going back to what perfume should be about, which is the actual liquid in the bottle,” Tache said.
What started as a collection of 20 dupe perfumes — Dossier calls them “Inspirations” — has grown into a line of 150 scents that are designed to smell just like designer versions, but go for $30 to $50.
Despite launching into a world that was immediately disrupted by the pandemic, growth has come quickly.
Dossier started selling Walmart in 2022 and, according to Tache, is now the retailer’s number-one perfume brand. In 2023, the company added an “Originals” line featuring its own scents. In September, Dossier started selling Target, where it is among the top three perfume brands, although the CEO said, “hopefully we can become number one, hopefully soon.” The company also started to open its own stores last year.
That growth isn’t coming in a vacuum.
The beauty and fashion industries have been questioning all the traditional business models and experimenting with new twists on how to get goods out to the market.
And both consumers and investors have been responding. Quince, an eight-year-old factory-direct fashion concept that topped $1 billion in sales last year, raised $500 million last month at a $10.1 billion valuation.
Both Dossier and Quince operate in that sweet spot where shoppers see high production values and a good deal.
“Consumers are becoming way more savvy than before,” Tache said. “They are looking for quality and not necessarily price and price signaling. And I think especially in these more economically challenging times, especially for Gen Z, people really want value.
“That’s what companies like ours … are offering — quality for a great price. And people are more and more educated and do more research about these different industries, and they just want to buy a great product,” he said.
Dupe brands are not new to the market, but Tache said Dossier looks beyond lower prices and also offers higher quality.
“That was always the angle from the beginning,” he said. “We wanted to provide a great product and not just necessarily something extremely cheap.”
Fraser Preston, managing partner at American Pacific, said: “The fragrance industry is a big and growing industry. It grew a lot in COVID[-19] and we think it’s going to continue to grow for the foreseeable future. There’s been a real reset in the way many people use fragrance, partially the younger generation is a much more active fragrance consumer than prior generations.
“We’re just in love with the Dossier value proposition, which is very high quality product for an accessible price point,” Preston said. “That’s a durable value proposition that will never go away in the consumer landscape.”
Based in the San Francisco Bay area, American Pacific has $1.2 billion of capital under management and counts the New York-based Dossier as its fifth investment in consumer products.
Preston looks at businesses through the lens of what he calls “The Q Process,” a business system the private equity company uses and also encourages its portfolio companies to implement.
“It’s a system for planning and prioritization and then execution,” he said. “It asks the questions of, Where is it that this company wants to and can go over a fairly short period of time, call it two or three years. And then what are the most important steps that we can take right now to move toward that goal.
“We incorporate a fairly intensive data gathering and data management exercise, so the management teams can really understand what’s happening in their business,” he said. “We try to be as transparent and inclusive in that process as we can.”
For American Pacific, that’s going to mark the beginning of what Preston described as a partnership that will help its new investment thrive.
“Dossier has a very long list of really exciting growth opportunities and one of our core beliefs is, if you try to do everything all at the same time, you most often don’t get anything done.”
Now the company and its new backers will select from that list and see what to do first.
And the time might be right to double down on dupe.
The deal, which has been nearly a year in the making, was shepherded on the Dossier side by Solomon Partners, which served as exclusive financial adviser.
Brandon Yoshimura, a managing director in the consumer retail space at Solomon, said: “The whole discourse around dupe has changed dramatically over the last few years. There’s a structural shift in how consumers are engaging with this category. It is very different from how older generations engage and the net effect of that is there’s just more purchasing in this category in terms of unit volumes than we’ve previously seen.
“We’ve seen this story in Zara,” he said. “We’ve seen this story in E.l.f. We’ve seen this story in Quince. In almost every category, there’s a disruptive model that looks like this, that’s just winning a huge amount of share because they combine quality and value.”