Media Moves

Coverage: Jessica Alba’s Honest Co. has a new CEO

March 17, 2017

Posted by Chris Roush

Jessica-Alba-The-Honest-CoJessica Alba’s The Honest Co., which makes baby and beauty products, announced Thursday that Clorox veteran Nick Vlahos will become the company’s chief executive officer.

Lauren Thomas of CNBC.com has the news:

“With our strategic shift from e-commerce to omni-channel brand underway, this is the perfect time to welcome [Vlahos] as the new CEO…” Honest Co. Co-founder Alba said in a statement. “Nick shares our mission of building a modern brand with ethical standards, trust and transparency at the forefront.”

Back in February, the maker of baby and beauty products was reportedly said to be overhauling its management team in a shake-up that could result in a CEO change.

The talks started after a rough year for five-year-old Honest Co., after its IPO plans were put on hold. The company then had acquisition talks with Unilever, only to see the firm acquire another environmentally friendly company, Seventh Generation, instead.

In December, Honest Co. announced that it would cut 80 jobs in early 2017, and that President Sean Kane, as well as CFO and COO David Parker, were leaving the company.

Jason Del Ray of Recode notes that a sale of the company to Unilever fell through:

Vlahos was most recently one of Clorox’s two chief operating officers and previously ran its Burt’s Bees subsidiary, a brand known for its “natural” vibe.

His role at Burt’s Bees may be notable to Honest Company customers who choose its products because they believe in its nontoxic, eco-friendly branding. The association with “Clorox” might not resonate in quite the same way.

The CEO change is not unexpected; Recode reported last month that Honest was contemplating making this very move and interviewing potential replacements for Lee. Lee said at the time that he planned to remain CEO but would do what’s best for the company.

The switch comes several months after Honest Company’s sale talks with Unilever fell through, after the consumer goods giant purchased Honest competitor Seventh Generation instead. Sources previously said that Honest Company’s $1.7 billion valuation was a roadblock in deals.

John Kell of Fortune notes the company is trying to shed its tech image and become more of a consumer products business:

The move mirrors what Fortune reporter Beth Kowitt argued late last year: despite the fact that Honest pitched itself to media as a tech startup, its business is selling diapers, laundry detergent, beauty products, and other household goods. The “disruption” Honest is trying to do is more about popular consumer staples and less about technology.

The tech roots lies in how Honest sold its goods, primarily a direct to consumer model via the company’s website. But Los Angeles-based Honest is now stocked in more than 13,000 retail stores across North America and it concedes it needs to start thinking about a future as a consumer products player that competes with the likes of personal-care giants Procter & Gamble and Unilever. That has more to do with product innovation, savvy marketing, and relationships with traditional retailers and less to do with tech.

Lee’s departure won’t be a surprise to Honest watchers. Recode reported that Alba and her team had reached out to consumer-products companies to lure top talent. Lee’s expertise is in building up startups. His departure from the management team comes after two other high-profile exits: President and co-founder Sean Kane and CFO David Parker stepped down from those roles late last year. Honest also laid off 80 employees and closed the company’s Austin, Texas office at the time of that announcement.

 

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