The rise and fall of Olaplex

Dean, whose parents had worked in salons and haircare product distribution, found the key ingredient for Olaplex after meeting Craig Hawker and Eric Pressly, two chemists at the University of California, Santa Barbara. With the ingredient, Dean developed a treatment that would link sulfur hydrogen molecules in hair, thus strengthening it, he told Modern Salon in 2015.

Key to Olaplex's early growth was its presence on social media. Instagram, for instance, was where Olaplex interacted with stylists, who were helping introduce the product to their own customers, according to Dean Christal.

"Olaplex grew out of social media, nothing else," Christal told Modern Salon. "We wanted word-of-mouth advertising because we knew that the chemistry would speak for itself."

In 2015, L'Oréal approached Olaplex and indicated it was interested in acquiring the startup. The deal never happened, though. Instead, Olaplex accused L'Oréal of stealing trade secrets during a meeting related to the potential deal.

Four years later, a jury found in Olaplex's favor, awarding the company a $91 million settlement, according to the Los Angeles Times.

On appeal, that settlement was overturned. Two years later, in 2021, the companies settled outside of a courtroom, Law360 reported at the time. The terms of the settlement aren't known.

"It is rare that we see brands of this size growing so rapidly and with such a passionate consumer base," Advent managing director Tricia Glynn said at the time of the deal.

Seeing Olaplex's success, other brands, from established names like L'Oreal and Redkin to upstarts, released their own bond-building haircare products.

In September, Olaplex even joked about all the dupes with an influencer ad campaign featuring a made-up product called "Oladupé."

One line of products, sold under the brand name Epres, was even developed by chemist Eric Pressly, using a new, patented formula.

Shares of Olaplex started trading at $21 each on September 30, 2021, valuing the company at $15 billion on the day of its initial public offering.

Olaplex stopped selling products containing lilial in January 2022, two months before a ban on products using the chemical took effect in the European Union. Olaplex's No. 3 hair mask, its best-selling product at the time, previously used lilial as a fragrance. Although the ingredient was only phased out in Europe, Olaplex removed it from its hair mask globally "out of an abundance of caution," the company said.

In January 2023, Insider reported that some Olaplex users said that their hair broke and fell out after using Olaplex products. A dermatologist said topical products generally don't cause hair loss unless they trigger an allergic reaction.

A month later, a lawsuit in California claimed that users experienced symptoms like bald spots and brittle hair after using Olaplex's products.

JuE Wong, the company's CEO, responded to claims that Olaplex's products caused hair loss and other ill effects, saying they were "safe and effective" in a February post on LinkedIn.

"Complaints like the ones you have come acrossz sadly, a fact of life in our industry, and have been made against other high profiled brands in the category for years," she wrote.

While overall sales slumped at Olaplex in 2023, the decline had a notable impact in one area: Sales through salons fell 61% during the company's second quarter of the year, Olaplex said in an earnings report.

Many Olaplex users first learned about the brand from their hair stylist, providing new customers to the brand and driving growth. Consumer surveys showed that "the number one source of truth is recommendations of hairstylists to their clients," CEO Wong said in August.

In October, the company said that Wong was stepping down from Olaplex's top executive position. Amanda Baldwin, the CEO of sunscreen brand Supergoop, will succeed her in early 2024. Baldwin's resume also includes positions at beauty giant Estee Lauder and LVMH, owner of luxury brands including Christian Dior and Fendi.

Olaplex's stock was trading for around $2.45 a share in late December, down from its opening price of $21 in September 2021. Competitors, stylists looking to other products, and consumer concerns about Olaplex's safety have all weighed on the company's shares, analysts at Jefferies wrote in October.

"We fear brand damage is more severe than anticipated and believe it is possible greater brand & strategy redirection will be required," the analysts wrote.