If Sara Happ isn’t on your lips today, it hopes to be tomorrow.
The brand that put lip scrub on the beauty industry map has sold a controlling minority stake to BGM Ventures, a company led by Greg Cooper, who guided third-party logistics provider Fulfillment Works to $20 million in annual revenues and sold it to supply chain specialist Stored, for an undisclosed amount. Cooper is joining a C-suite group that includes Robert Mihin, former EVP of Benefit Cosmetics, to lead Sara Happ’s operations and scale its business. A CEO is expected to be named next year, according to Cooper.
Happ, who remains a minority shareholder, will spend her time and energy on product development, creative direction and sales. BGM Ventures’ investment will go toward increasing Sara Happ’s workforce, which now stands at six people, ensuring it has inventory to keep up with demand and expanding its product range. While the brand has largely been profitable throughout its history, a priority for Cooper will be improving its cost of goods and supplier terms.
“What attracted me was Sara, her personality, knowing that she succeeded with this for so many years and that there is room to grow. I’m excited to jump into the cosmetics and skincare industry,” says Cooper. “The thing about Sara is she wants at this stage to focus on being the brand ambassador. I can see that she is beyond amazing at it. She has a presence and passion for her product. She went on QVC recently and knocked it out of the park in eight minutes.”
Happ, a client of Cooper’s former logistics company, says, “This is the perfect time to take on this investment because we found the right partner. I have known Greg personally and professionally for 18 years. His family is family to us, and the C-suite he brings with him is killer. We are going to be a phenomenal team together. I get to be a true founder and creative, which is what I love the most.”
Happ reports Sara Happ has assembled an advisory board with Thirteen Lune co-founder Nyakio Grieco, former Bare Minerals CEO Leslie Blodgett, Saint Jane founder Casey Georgeson and Joanna Vargas Skin Care founder Joanna Vargas as members. She says the brand has reached a multimillion-dollar sales total, and its sales have advanced at a 30% yearly clip. David Grinberg and Emily Zipperstein, attorneys at the firm Sidley Austin, advised Sara Happ on its deal with BGM Ventures.
“I get to be a true founder and creative, which is what I love the most.”
The brand is stocked at roughly 1,500 doors in the United States at retailers such as Saks Fifth Avenue, Revolve, Nordstrom, Anthropologie, Thirteen Lune and QVC along with 600 boutiques. Abroad, it’s sold in 22 countries and planning to heighten its profile, particularly in Asian and Middle Eastern countries as well as the United Kingdom.
As she was toiling during the day as a programming manager at ESPN, Happ dedicated her evenings to devouring beauty magazines. She noticed that, although there were scrubs for other body parts, there weren’t any for lips. In fact, a Google search of the term “lip scrub” turned up no results. In 2005, Happ developed a lip scrub in her kitchen with oils and sugars and took it to five stores in the Los Angeles area, among them the defunct shop The Beauty Closet and Larchmont Beauty. They all bought it on the spot.
The store reaction was validation for Happ, and she received further validation a year later from the magazine People, where Reese Witherspoon was highlighted as a fan of Sara Happ’s Lip Scrub. In two hours, the brand generated more sales than Happ’s annual salary at ESPN, and she decided to quit her job to concentrate on it.
Initially, Happ poured $15,000 from her personal savings into getting Sara Happ off the ground. In 2006, she invited friends to back the brand, and during the height of the pandemic, she used mezzanine capital and government loan funding to tie the brand over as sales of lip merchandise sank because people were covering their lips with masks. Still, Happ notes the brand has primarily been bootstrapped. She says, “We have been running like a startup for 18 years. We think like a startup. We spend like a startup.”
Currently, Sara Happ’s assortment has around 25 stockkeeping units priced from $18 to $48. Its bestseller is The Lip Slip, a moisturizing lip gloss that went through 200 iterations before being finalized. Going forward, the brand anticipates boosting the array of colors and flavors it offers in addition to launching at least one new product per quarter. Calling itself “the lip expert,” Sara Happ is staying squarely in the lip category with future products.
Happ says, “As flooded as the market is, for our company that only does lips and our chemists that are charged with working with us to do only lip products, there are gaping holes that exist. Will be releasing products that fill a white space and are first to market.”
