Are beauty influencer brands falling out of fashion?

Morphe's failed bet on Jeffree Star and James Charles, plus the exit of Hyram and Addison Rae's beauty lines at Sephora, indicate a reckoning for an industry that for years has been shaped by influencers.
Addison Rae at the 2022 Met Gala.
Addison Rae at the 2022 Met Gala.Photo: Dimitrios Kambouris/Getty Images for The Met Museum/Vogue

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Is the power of social media stars waning in beauty? After years of helping to drive awareness and sales for brands by producing content that feels more relatable than glitzy campaigns from traditional celebrities, many creators have launched their own brands as a way to directly monetise their engaged fan bases. But, there are signs that a shift may be underway.

Selfless by Hyram, the skincare brand founded by influencer Hyram Yarbro in partnership with The Inkey List, and Item Beauty, a makeup brand launched by TikToker Addison Rae, will no longer be sold at Sephora. While Item Beauty still appears on Sephora’s e-commerce website at discounted prices, Selfless by Hyram can no longer be purchased online via the LVMH-owned specialist beauty retailer.

Meanwhile, Los Angeles-based makeup giant Morphe, onced valued at $2 billion thanks to splashy collaborations with celebrity influencers, is shutting down all of its physical stores in the US. Its parent company, Forma Brands, this week entered an agreement to be acquired by a group of secured lenders after it filed for Chapter 11 bankruptcy.

Yarbro says Selfless is not shuttering, and the brand plans to expand and announce new retail partners. Sephora became its exclusive retail partner in June 2021 off the back of Yarbro’s success as a skincare vlogger, with a following of 4.56 million on YouTube and 6.1 million on TikTok. Selfless says it is “gentle, non-irritating” skincare with lower concentrations of chemicals than competitors. It also touts a message of social consciousness, having established partnerships with environmental nonprofits Rainforest Trust and Thirst Project. 

The priority ahead is keeping the product line “accessible” and continuing its mission for “social change”, he wrote in an emailed statement. “Due to changes in direction and retail adjustments, Selfless by Hyram products have been winding down at Sephora. We have had a wonderful relationship with Sephora and owe much of our success to the support of the Sephora corporate team, beauty advisors, and every client who has purchased our products in store and online.” Sephora declined to comment.

Item Beauty, on the other hand, is pausing its operations entirely. The brand was launched in August 2020 by TikTok star Rae, who currently counts 88.9 million followers on the platform. Item markets itself as “a clean beauty line with lush ingredients” that helps its consumers achieve “a natural look”. While the brand originally launched direct-to-consumer, available to shoppers via an e-commerce site, it entered into an exclusive partnership with Sephora in August 2021. The launch at Sephora allowed fans to discover the brand in real life. It was also notably one of Sephora’s few Gen-Z focused, influencer-led brands. 

Rae shared on her Instagram Stories: “As some of you know, Item Beauty will be ending its exclusivity with Sephora and taking a hiatus while I reimagine my journey in beauty to make sure it reflects who I am today.” Products will still be available to purchase on Item Beauty’s e-commerce site throughout February, she added, sharing a 40 per cent off discount code. She declined to comment further when contacted by Vogue Business.

James Charles hosting a Morphe event in 2018.

Photo: Eugene Gologursky/Getty Images

Rumours surrounding possible Morphe store closures began circulating in December 2022 after TikTok users made claims about last-minute closure notices and inventory discounts.

Founded in 2008, Morphe set itself apart by partnering with influencers to provide their followers with discount codes for fans to use at checkout to purchase a specific item for a reduced price. Morphe then began embarking on deeper partnerships with powerhouse influencers, such as Jeffree Star and James Charles, who would not only promote the products online but make in-person appearances that drew so many fans that malls across America had to shut down. It led to revenues topping $400 million in 2019, according to a company presentation from December 2021 obtained by Bloomberg. However, Morphe severed ties after Star was accused of racism and harassment in 2020 and Charles was embroiled in sexual misconduct claims in 2021.

Star has responded via a YouTube video titled “Doing What’s Right” in which he reflected on his behaviour on social media, apologised and talked about the importance of inclusivity to his brand. Charles has also responded via YouTube, including in a video titled “Holding Myself Accountable” in which he apologised for his actions.

The priority now is to focus on e-commerce and wholesale, Forma Brands tells Vogue Business. Morphe’s stores outside the US will remain open. “We believe this shift will position Morphe to better compete in the broader beauty landscape and more efficiently reach our customers where and how they shop,” a Forma spokesperson says. 

A big fan base isn’t enough

These developments point to a shift in an industry that for years has been shaped by influencers. 

Thanks to the close relationship cultivated with followers, influencers are able to turn feedback into tailored products that reflect emerging trends, said Yarbro during the Vogue Business and Klarna Beauty Forum in September 2021. “I was able to take all the requests, concerns and everything I had seen in my community and what people were looking for but couldn’t find within the industry — which is what I believe is a strength of influencer brands is that they’re able to take the discourse they see online and create products that are truly curated,” he said.

However, the market has become crowded as a plethora of influencer-founded brands have boomed in recent years. YouTuber Michelle Phan counts over 8.74 million subscribers and runs Em Cosmetics, a multi-million-dollar beauty brand that she first launched with L’Oréal in 2013. Influencers Tina Craig, Marianna Hewitt and Jen Atkin have founded premium beauty labels U Beauty, Summer Fridays and Ouai, respectively. Celebrities including Jared Leto, Kate Moss and Brad Pitt have also been cashing in with their own skincare and makeup brand launches. A new generation of TikTok-born beauty brands, such as Refy and Youthforia, are also emerging. Part of that is due to the relatively low cost of entry: anyone can set up a website, and many influencers and celebrities already have the relationships necessary to build a brand. 

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“The recent news demonstrates that having a big fan base isn’t enough,” says Anna Vale, a global beauty marketing and communications consultant and advisor. Consumers are becoming wary of misinformation, sponcon and questionable promotional tactics. Maya Zawislak, strategic insight director at Kantar Worldpanel, agrees, questioning some celebrities and influencers who have launched beauty brands despite never indicating any interest or knowledge in the category. “Consumers are becoming savvier, putting time into researching beauty products before making a purchase and substantiating claims before buying.”

The rise of call-out culture has also made celebrity bets riskier, says Olivia Tong, managing director of equity research, specialising in beauty and personal care for investment bank Raymond James. “With the internet, everybody knows everything so if you ever did something wrong, it will come back. That’s what happened in respect to Morphe and their key stars. They were expanding too fast and then the world and consumer expectations changed, and the key people that they’ve hitched their wagon to got into hot water because of their personal lives.” The risk is when a brand is too closely tied to a creator. “There have been a few more success stories that are not obviously tied to a person, such as Tatcha or Drunk Elephant. The average consumer doesn’t think of a person attached to [those brands].” 

As the creator economy matures, more influencers will strive to launch their own brands. The trouble is maintaining relevance as their fan bases grow up, says Tong. “The beauty industry is interested in newness so there will always be a rotation on who the next it-influencer is. There will always be a portion of the market that will gravitate towards influencer brands. But people don’t like the same things that they did when they were 15.” That means some time in the spotlight before eventual churn, she says. 

For existing influencer brands, the difficulty will be growing their businesses amid tough competition and higher interest rates. Larger beauty conglomerates benefit from brand awareness and bigger budgets amid a cost of living crisis, says Kantar’s Zawislak. “Consumers are becoming more cautious of the products they buy, and many stick to the brands they already know and love.” Around half (55 per cent) of women globally purchase skincare items because it’s a brand they have always used, particularly during times of financial uncertainty, according to 2022 data from Kantar. 

It’s an uphill climb for influencer-led beauty brands, new and old. “The benchmarks are going to get more challenging in terms of funding and getting those brands to grow beyond their first tranche,” says Tong. 

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