When Beauty Bay founder David Gabbie left school, he was on a mission to create a business – and the world of retail looked like the perfect match for him. “I grew up in retail,” Gabbie tells Retail Week in a video call from his native Manchester.
Gabbie’s father was an entrepreneur and retailer himself, owning a pharmacy chain in the 1980s, followed by a group of stationery stores in the 1990s.
“I was going to stores every week with my dad, looking around at the fixtures and fittings and stock levels, so retail is in the blood,” he explains.
Yet, for all his grounding in bricks and mortar, Gabbie saw greater opportunity in the then-booming dot-com revolution. He recalls that starting an ecommerce business in the late 1990s was difficult.
There was only one relevant university course on offer – which he passed on. “I looked at it and thought I can just start something myself and see what happens,” he says.
His gamble paid off. The company, which began life as Fragrance Bay in 1999, is now a leading online store with more than 2 million active customers globally and more than 3.5 million social media followers.
“When I started the business, I used to take the order, run out to Debenhams or Boots and go and buy from them to fulfil an order, as we didn’t have the volumes to get it from the suppliers,” Gabbie says.
“Our mission is to be the number one global destination for the young beauty-obsessed. That defines everything we do”
Today, Beauty Bay boasts £130m in annual revenues, with its mobile app driving 25% of sales. Nearly half its sales are made internationally and it fulfils thousands of orders daily.
Gabbie’s vision for Beauty Bay is clear: “Our mission is to be the number one global destination for the young beauty-obsessed. That defines everything we do in terms of social media following, how we attract and retain brands.”
To float or not to float?
Beauty Bay’s online hub offers makeup, skincare and wellness products, connecting beauty aficionados from around the globe.
Gabbie would not rule out a permanent physical presence in the future, following experiential events pre-pandemic: “We wouldn’t be looking to open a chain of 20 or 30 stores nationwide, but definitely we see some value in experiential [retail].”
Recent reports suggest that Gabbie may also see value in a future stock market flotation, a move that would mark a swift pivot from the brand’s current operations.
While he does not confirm or deny these reports, Gabbie says: “We’re not under any pressure anyway. We are not owned by private equity. Anything is possible and doing nothing is equally an option.
“We’ve never taken on any external investment, we don’t have any debt in the business, so no real external involvement to a degree.”
Curator, not aggregator
Gabbie avoids the term ‘beauty aggregator’, believing that the Beauty Bay marketplace plays more of a role than just bringing brands together.
“What we’ve done is positioned ourselves as curators within the digital space, so we’ve curated these coveted and trending beauty products.”
He points out that competitors such as Feelunique and Lookfantastic stock more than 1,000 lines, while Beauty Bay stocks just 200.
“We are a bigger business with smaller brands. That’s because of the way we built the business; with Beauty Bay being the brand, not necessarily relying on these well-known brands.”
“What we’ve done is positioned ourselves as curators within the digital space, so we’ve curated these coveted and trending beauty products”
Gabbie attributes the company’s market position to its knack for bringing new brands on board in their early days before they burst into the mainstream.
This began with Anastasia Beverly Hills, Morphe, Too Faced and Urban Decay. “These are well-known brands today, but the point is that we identified them and worked with them well before they gained any traction,” he says.
Now the neverending search for the next market-leading brand is data-driven. Beauty Bay gathers customer search data, which its dedicated trends insight team then uses to seek out emerging brands such as Good Dye Young or Glisten Cosmetics. The retailer also used these insights to launch its own brand range: By Beauty Bay.
In addition, Beauty Bay regularly joins forces with leading makeup influencers, including NikkieTutorials, and was recently granted a licensing deal by Disney to create palettes based on its early films.
Beauty’s future
Gabbie is frank when it comes to his take on a beauty industry that is moving increasingly online.
“What we’ve witnessed, certainly through social media, is breaking down a lot of barriers and democratising beauty”
Sustainability is a major theme, with the company using cardboard instead of plastic for eyeshadow palettes, for example, although he notes that overall industry progress is slow. “I think it’s there – [consumers] absolutely expect it – but they know you can’t just get there overnight.”
In his eyes, social media has led to the greatest change: “What we’ve witnessed, certainly through social media, is breaking down a lot of barriers and democratising beauty.
“You’ll get consumers more willing to experiment and try different brands, learn from their friends or social media or Reddit forums, rather than being sold because their mum wears it or the sales lady at one of the concessions is pushing them down this route.”
Gabbie has also watched the spree of online businesses being acquired in recent months with interest.
“There’s not many left to snap up,” he says. ”The consolidation is probably nearing its end. There’s a lot of noise around other retailers or businesses that have a strategic interest – maybe in fashion they want to be in an adjacent category, beauty.”
He believes that retailers who are considering a move into beauty as a next step are realising how crowded the industry has become. He says the likes of Boohoo and Frasers are finding out that it’s “a long, hard slog”.
“It’s a tough industry to crack,” he concludes. “I think it’d be difficult for anyone at a standing start, certainly without a huge amount of capital, to build a business with any scale.”
Despite his bricks-and-mortar heritage, Gabbie has spent decades building a digitally native brand. With the beauty consumer finally switching on to the online space, Beauty Bay is primed to reach the next generation of shoppers.
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