Good morning! L.A. fire chief Kristin Crowley is out, Citigroup renames DEI team and abandons diversity goals, and a founder's much-envied exit taught her not to give up control too soon.
- Exit plan. In 2002, Gail Federici was the cofounder and CEO of John Frieda Haircare. She and celebrity stylist Frieda were all in on the salon-quality haircare brand when they got "an offer we couldn't refuse," Federici remembers, and sold for a blockbuster $450 million to Japan's Kao Corporation, which sought shelf space in the U.S.
But while Frieda enjoyed the fruits of their success ("In Switzerland, at his house in Ibiza, at another house on yachts going everywhere," Federici says) the sale left his cofounder in a "dark place."
"I didn't want to sell the business. We really weren't ready to sell the business," says Federici, now 75. "I was at a loss when we sold." Even her children noticed that she was "very strange" without work to guide her. "I'm not depressed, particularly at all, but I worry about things, and when I'm working, I just focus on what's in front of me," Federici says. "That's what I really like."
Federici solved her feelings of aimlessness by, a decade later, founding Color Wow, a haircare brand for color-treated hair that today pulls in about $500 million in annual retail sales. She cofounded the John Frieda brand with the insight that her own frizzy hair lacked products designed for it, and she launched Color Wow in response to the growing popularity of damaging hair dyes and their long-term effects on hair.
Yet she says creating John Frieda was a "cake walk" compared to building a brand in today's market. There are the obvious changes over the past two decades: the rise of social media and pressure on brands to create content across multiple platforms. Federici says at John Frieda, the brand would typically do one major photo shoot and TV commercial whose content would last one or two years. "The amount of content that you have to create, the amount of analytics that you're looking at all of the time, the algorithms keep changing," she says. "It's much, much more complicated than it used to be." Then there's the corporate consolidation. "The drug stores bought out the smaller drug stores, so there aren't as many retail players as there used to be," Federici explains. "[Before], you had a lot of different accounts, so you had a lot of options. If one group didn't take you, there were many other players."
But Federici isn't letting the stresses of building a modern brand lead her to sell early, again. Color Wow has "declined some offers" over the past 12 years, she confirms.
"What I learned was, I like to work, period," she says of selling earlier than she planned. And while John Frieda has continued to grow, she doesn't pay attention. "Friends would call and say, 'Did you see this? Did you see that?' And I say, 'Don't even tell me. It's not ours anymore. I don't need to know.'"
Emma Hinchliffe
emma.hinchliffe@fortune.com
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