- Olaplex is losing customers to hairstylists. These hairstylists are a vital source for new customers.
- The brand’s second-quarter sales via stylists dropped 61%, ending in June.
- JuE Wong, CEO of JuE Haircare, says that a lawsuit over hair loss has affected the reputation of the brand in salons.
Olaplex sales continue to decline, with hair salons being the main source of purchase.
The company announced on Tuesday that sales of the bond-building brand shampoo fell by 48%, to $109 millions during the second quarter ending on June 30. Olaplex has also reduced its sales and profit projections for the remainder of 2023.
The sales at salons dropped even further, by 61%. Olaplex’s sales were dominated by hair salons, which accounted for 38%. Olaplex says that stylists are a major factor in sales growth. Olaplex is often first discovered by customers when stylists use it.
At a May conference, CEO JuEWong stated that “the stylist continues to be at the core of Olaplex.” Wong cited a survey of consumers that showed “the number one truth source is recommendations from hairstylists and their clients.”
Olaplex faced many challenges over the past several months. One of the challenges was a lawsuit,In which more than 100 Olaplex customers claimed that the products of the company had caused them harm hair lossOther damages. Wong told investors last month that these claims, and similar ones in the media, have damaged Olaplex’s image.
Other products that claim hair strengthening The market has also seen the appearance of other productsOlaplex is facing increasing competition.
Wong, during a Tuesday call to discuss Olaplex’s second-quarter earnings, said: “We are aware that these factors have a negative impact on our professional channel’s performance and the perception of the brand among some stylists.”
Wong stated that “stylists remain the foundation of our brand, and are essential to maintaining our reputation.”
In June, the firm launched a marketing campaign aimed at improving their image with stylists as well as customers. Wong, on Tuesday’s conference call, said that direct-to-consumer online sales were only down 6% for the third quarter. This is a “leading indication” that the marketing campaign was working and the brand sales are beginning to stabilize.
Olaplex became public in October of 2021. Since then, its share price has fallen about 85%, according to S&P Capital IQ. Since October, the company has lost a number of top executives. Insider report in April
