Even by the light-speed standard of social media,
had a fast rise—and suffered an even quicker backlash.
Founded in 2014, the hair-care company built a following with salon treatments whose bond-building technology addressed common hair complaints: split ends, breakage, frizz and color damage. Olaplex became a byword for hairstylists and beauty influencers, leading the company to make a consumer product line and a splashy Wall Street debut.
Now it is facing declining sales and a plummeting stock price amid mounting competition. In February, Olaplex was sued by dozens of women who allege its products cause hair loss and damage. Other unhappy customers have taken their complaints to social media, turning a once-promotional platform into a liability for the brand.
Olaplex Chief Executive
said the company has dedicated 2023 to be a “reset year.” The brand has nearly doubled its marketing budget for an awareness campaign that includes billboard advertising, boots on the ground at Sephora and
and a rapid-response approach to social media. “We want to correct misinformation more vocally and faster,” Ms. Wong said.
Founders Dean and Darcy Christal, a husband-and-wife duo, had zeroed in on a problem they wanted to help solve: chemically damaged hair. They were about to give up on their approach when Mr. Christal met Craig Hawker, a chemist who believed he could develop a way to prevent and heal chemically altered hair. They soon joined up, and Mr. Hawker, along with his former Ph.D. student Eric Pressly, developed the Olaplex formula.
The company started in Santa Barbara, Calif., and launched the brand with salon-only products. Mr. Christal said that in the early days it wasn’t too hard to promote the bond-building serums, which stylists touted as highly effective.
But it wasn’t long before the company publicly addressed comments about hair breakage and scalp issues. The company investigated the allegations at the time. “We took everything seriously. If a problem had existed, we would have wanted to know,” Mr. Christal said.
Olaplex, meanwhile, tapped several well-known stylists as brand ambassadors and drew praise from celebrities like Kim Kardashian and Drew Barrymore. In 2018, Olaplex began to sell online, positioning itself as a one-size-fits-all solution for damaged hair. It began selling at Sephora the same year and at Ulta Beauty in 2022.
In November 2019, Olaplex struck a deal to sell itself to private-equity firm Advent International. When the deal closed in January, Mr. Christal stepped down as chief executive, and Ms. Wong was brought in.
“There was all this hype and fever around it,” said Amy Chang, a Los Angeles beauty influencer with 1.6 million followers on TikTok. But when she tried the products herself, she said she was disappointed. “As time progressed and I kept using them, my hair felt dry and brittle and stiff,” she said.
In January 2021, as the brand continued to win favor on social media, she was asked by viewers for her thoughts on the products. She told her followers, “Everyone seems to love Olaplex. But, fun fact: I didn’t.” Ms. Chang said she later worked with Bumble and Bumble to promote its bond-building competitor in exchange for a flat fee.
Olaplex raised $1.55 billion in a public stock offering in September of 2021, which valued the company at $15 billion. As the brand continued to dominate hair-care posts on TikTok, the hashtag #OlaplexBun—referring to a hairstyle that helps its deep-conditioning product set in—garnered millions of views. In May of 2022, Olaplex reported its net sales rose more than 57% to $182.6 million in the first three months of the year, compared with the same period one year prior.
But earlier that year, the company removed an ingredient called lilial from its products after the European Union banned the chemical. The move set off a new cycle of unflattering coverage for Olaplex. Users posted concerns on social-media accounts about the products’ possible connection to infertility and highlighted animal studies involving the ingredient. More allegations surfaced about hair loss and damage.
Ms. Wong took to Olaplex’s social-media channels to refute the claims, posting in February that the brand was sharing results “from independent third-party laboratories” to prove its products were safe to use.
“Our products do not cause hair loss or hair damage or hair breakage,” Ms. Wong said
Ms. Wong was referring to skin allergy tests, called HRIPT, which the company conducts before bringing products to the market. The tests are an industry standard protocol for detecting potential allergies or irritations. The company said its manufacturers test each production batch to make sure all are made in accordance with its formula.
Roughly 100 women sued Olaplex this year over hair loss and scalp injuries that they alleged resulted from its products. They argue the company falsely advertises its products as safe and effective.
Amy E. Davis, a Dallas-based lawyer who is lead counsel for the plaintiffs and who previously represented plaintiffs in a mass tort lawsuit against hair-care brand Wen, said that to take part in the lawsuit, she and co-counsel are ruling out other common causes of hair loss in plaintiffs, including health conditions, medications, life changes and stress.
Ms. Wong said the company is empathetic to people suffering from hair loss and breakage, but maintained the cause isn’t Olaplex. She suggested they consult with a dermatologist.
The backlash has received a lot of attention. TikTok videos with the hashtags #OlaplexHairLoss and #OlaplexRuinedMyHair have been viewed nearly 500,000 times. In addition to public posts, a private
group created in July 2022 called “Olaplex Hair Loss/Hair Damage?” has amassed 8,500 members.
The brand’s stock and sales have fallen to about $4 a share, which is down about 80% from its listing price on Sept. 30 of $21 a share. On a Feb. 28 earnings call, Olaplex reported that its net sales declined 21.5% in the fourth quarter of 2022, compared with the same period a year ago, and it forecast a slowdown for 2023.
Olaplex also faces growing competition from brands like K18, which has gained celebrity fans like Selena Gomez and Hailey Bieber. It recently started selling at SalonCentric, a
-owned distributor that also sells non-L’Oréal brands. Mr. Pressly, the other chemist who helped develop the Olaplex formula, launched his own brand, Epres.
To combat negative sentiment on social media, the company is taking an aggressive front-line approach. Olaplex has dedicated $70 million to marketing this year, up from $40 million last year. Ms. Wong said the company wants to offer deeper understanding on how its products work.
“We put it on ourselves,” Ms. Wong said. “Maybe someone out there spread misinformation, but we didn’t do a good enough job to really intercept that.”
Olaplex has hired a field team to work at 180 Sephora stores and 220 Ulta Beauty locations. They will focus on educating both shoppers and retail associates, and report back to Olaplex after each visit, Ms. Wong said. The company said it would also share some user-generated social-media posts on its company platforms.
Because nearly 43% of Olaplex’s sales come from salon professionals, Ms. Wong said the company has hired more personnel to make weekly visits to beauty-supply stores and recruit salons in markets like New York, Texas and Los Angeles.
Korinne Wolfmeyer, a senior research analyst who covers Olaplex for financial-services firm
said in-person representatives at Sephora and Ulta are necessary, noting the brand’s product expansion in the last few years has caused confusion. “There are all these bottles on the shelf, which one does what?” she said. While social media can help with messaging, “having that human connection in person will be big,” she said.
Ms. Wolfmeyer said the kind of backlash Olaplex faces is rare among beauty and hair-care brands.
Olaplex is also looking beyond hair care, starting with its new Lashbond Building Serum for eyelashes. Ms. Wong said that in clinical trials, people’s lashes appeared “thicker and longer” after using the treatment.
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