Greetings! As you can probably tell, today’s newsletter looks a little different. After three years, we’ve redesigned the look and feel of our private emails, and want to know what you think. If you have any feedback, please click here to take a brief survey.

A MESSAGE FROM OUR SPONSOR

I’ve been following Goop as it has tried to sell just about everything—skincare, TV shows, vibrators, made in Italy knits, wellness conferences, stores, and more—in the 16 years since Gwyneth Paltrow hit send on that first newsletter from her London home. By many measures, the lifestyle business Paltrow has built is impressive; Goop has seen many iterations, and her arc of personal influence, which spans four decades and every diet and workout fad imaginable, is as relevant as ever. Most recently, I’ve learned that Gwyneth is maybe even trying to sell Fashion Week on a Goop runway show. But somewhere along the way, Goop got a little lost. Despite its extraordinary brand power, the business lacks focus and the strong executive leadership required to become an attractive acquisition target. This year, I’ve heard that Goop is approaching about $100 million in revenue, which has been more or less flat for the past four years. It’s a large number, yes, but Greycroft, Felix Capital, Lightspeed, and others won’t see a return on their collective $140 million investment until Goop is profitable. Or, more likely, when a C.P.G. firm takes it off the market and returns their preferred investment with a nice return. Enter Julia Hunter, who propelled Jenni Kayne from $3 million to more than $100 million in revenue during a memorable stint as C.E.O. a few years ago. As I’ve previously reported, Paltrow tapped Hunter to help Goop through its awkward phase. I connected with Hunter, who spoke uncharacteristically frankly about the company’s challenges, and optimistically about its opportunities. I found this refreshingly honest—especially given how the company normally communicates. Our conversation has been lightly edited and condensed.

A MESSAGE FROM OUR SPONSOR

What was the turning point? When did it go from “Grow and scale at all costs” to, “Wait, this isn’t working”? That was really Covid for them. That was a big turning point when their sales stopped growing as fast as they had previously, but there wasn’t a big moment where it was like, “Oh, this isn’t working.” It was more that Goop had all the hype at the beginning because of Gwyneth, and they were saying the thing that was controversial––but then the halo of that starts to not be as exciting. They only had Goop Beauty, and Goop Beauty has been growing every year, but it’s still just not huge. Advertising business as a big part of revenue started to decline, and that was probably the biggest shift to revenue of the last several years. It was not half of the business, but more than 25 percent at one point. Goop had been leaning into it because it was paying for itself and supporting the growth in Goop’s own brand product categories. They got into the idea of, “We can just use this vehicle to pay for the business,” but in Covid all of those accounts stopped spending. It happened slowly, and at the same time they couldn’t rely on their product businesses because they weren’t set up right yet. There was no collapse; it’s more that they haven’t been able to grow because the puzzle has looked different. Revenue has been coming from different places over the years, so there hasn’t been this decline, even though revenue has shifted and hasn’t increased as much as it should have. There haven’t been any huge missteps. I heard Goop’s editorial team was one of the hardest hit. Are you doing away with editorial? We are actually going to be hiring a few positions back into the edit team. It was definitely more impacted––the team went from like 15 to five people. It was the biggest ratio, but part of that was because the way the team had been structured was much more old-school editorial, where it was all about these longform articles. We want to go more in the direction of having edit be integrated with social media, and they’ve been very separate. The goal is to merge the teams together so that when you think of Goop’s content, you don’t just think of long articles––you think of a video where you saw the TL;DR version of the article, and then there are tidbits that are cut for social so we have more of a presence that’s current. We’re also going to have more contributing editors who are more like the thought leaders in their space––and that’s very Goopy.

You’ve said that the focus is fashion and beauty. How do you, in practice, turn the beauty business into what it should be? Because that, to me, feels like what the core of the business should have always been. The fun thing that we’re trying to work on for next year is a Goop Spa. We want that to be a 360 experience so that the food (Goop Kitchen) is part of it, too. We want there to be a little bit of shopping and a really nice curation: My dream for it is a version of Goop meets Soho House, but more of a wellness experience. We haven’t decided if it’ll be membership-based or not, but it’s something that’s very high-end. The other reason I’m so excited about it is I feel like it also might be able to travel internationally because other countries also value self-care and spa experiences. Gwyneth is very good at that––she has the fucking spa in her Montecito house. It’s insane. She is the arbiter of how you take care of yourself. The point of self-care is to feel better and do whatever makes you feel better––it doesn’t need to be a solution for all of life’s problems. It’s not snake oil. Do you see those kinds of experiences as being more brand-awareness tools or actual revenue drivers? What about In Goop Health, which was an offline experience? In Goop Health, I would say, bordered on cheesy–– it’s half the brand, the sponsors aren’t authentic, it definitely didn’t feel good. But the thing that was really good about it was the programming, which is part of the contributing-editor model that we want to go to––the best people talking about whatever the topic is, the Esther Perels of the world. That’s what we’re going forward with when we think about what our content strategy is. What about actual beauty products? If you want to make beauty into a big business, won’t product get you there faster than offline experiences? Experiences are the halo, and building the experiences helps sell the Goop Beauty products. The beauty assortment is pretty full. They have a lot of product assortment, and the formulas are really good, but it does feel outdated. We’re redoing the packaging, which you’ll see in the back half of next year. The company has struggled with designing something new, and then it takes years to launch the new packaging because of all these cumbersome processes. It’s behind. We want to redo all that, give a new life to it, and then have the spa just basically remind you. The peptide serum is crazy; we’ve sold about $5 million worth of it already. Is the plan to keep beauty mostly direct, or are you trying to build your wholesale partnerships? There’s only so much you can scale without a presence at an offline retailer, especially for beauty––and makeup specifically—which Goop has increasingly made a focus. It does actually retail very well internationally, it’s just still a really small business. Our hope is that we’re doubling wholesale next year, but it’ll still be small. It has a long way to go on the wholesale side, but what we know is that we can focus on D.T.C. and that the e-commerce experience can be bigger, as well as the spa experience and the retail stores. And then, Amazon’s actually doing very well, so those pieces––the direct business––we can win because we can control it. My hope is that big-box retailers want to come along and see what we’re doing.