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The op-ed didn't come together in time for this week's edition, so I'm going to try something new.

Here are three thoughts I had about finance, the industry, or just the news cycle in general this week that I thought were worthwhile checking out and sharing with you all.

Spare a thought for Leopold Aschenbrenner. The Silicon Valley wunderkind got dragged up and down the Wall Street Journal on his own wedding weekend, which is about as unlucky as timing gets (I saw at least three separate WSJ articles in the same day ripping him apart).

People love building up prodigies just to tear them down.

The short version: his hedge fund, Situational Awareness, was up more than 400% in the first six months of the year, ballooning assets to roughly $45B. Then AI stocks turned, the margin calls came, and he was forced to dump his leveraged public positions to Ken Griffin's Citadel in a fire sale. The fund finished July down 67% (CNBC).

Again: poor guy. But I think it's a big and important lesson about leverage.

At points he was holding something like $5 of stock for every $1 of his own capital. That math is spectacular on the way up and it is exactly why everything unraveled as fast as it did on the way down. Leverage doesn't change your thesis. It just changes how long you get to be wrong.

And before we all feel too superior about it: $5 of exposure per $1 of capital is roughly what a private equity firm puts on a buyout. The difference is that PE gets five years and quarterly marks. Leopold had a portfolio that repriced every ninety seconds.

Beauty is not immune to this, it's just slower. Estée Lauder's gross debt now sits above 5x EBITDA and they got there not by borrowing more, but by earnings falling out from under the debt they already had.

Scroll down to Finance Buzz and you'll see the same story with a longer fuse: L'Occitane levered up to go private at $7B in 2024, and is now selling Elemis for just under the $900M it paid in 2019. Pai Partners will lever it up again.

Leopold got a margin call. L'Occitane got a covenant. Same physics, different clock.

A little while ago I wrote about the Lipstick Index, Leonard Lauder's old theory that small indulgences hold up when the big-ticket stuff doesn't; ergo, when lipstick sales trend up, the economy might be in shambles. It remains one of the most-read things I've written here.

Well, a new index just dropped, and it is pork.

Hermès Executive Chairman, Axel Dumas, told analysts he watches two things to gauge the health of the Chinese consumer: real estate, and the price of pork, which recently fell to a 16-year low.

His logic: “Pork is eaten, particularly during banquets and in restaurants… so, it is a good indicator of the desire to, you know, celebrate. I'm not saying that our clients are all sensitive to the price of pork, but I'm waiting for the rebound, which will be a good indicator of optimism.”

Hermès shares fell 11% after sales in Asia-Pacific grew just 2.5%, well short of what analysts wanted (WSJ). The stock is down ~27% year-to-date.

I don't want to overdo the beauty tie-in here, but if you sell prestige beauty into China, a proxy for “do people feel like celebrating” is not the worst thing to have on your radar. Lipstick on the way down, pork on the way back up.

Le Monde ran a six-part investigation into LVMH and Bernard Arnault. Arnault responded with an open letter, published on the LVMH press account, titled simply “Merci” (“Thank you”).

It is a rebuttal dressed as a thank-you note. He compares LVMH's export record to Airbus, L'Oréal and Renault, works through the tax and media allegations, invites the two journalists for an apéritif at the Fondation Louis Vuitton, promises them French wine, and compliments the paper's crossword puzzles (WWD has the context).

Here's the letter: https://x.com/LVMH_Presse/status/2081404246751109150

If your French is rusty, there's an English translation posted in the replies underneath the original.

I'm not taking a position on any of it. I just think it's a fascinating read, and a masterclass in tone, whatever you make of the substance. Highly recommend.

Every month we award the IRI-Sys user who's been the most active and productive on the platform with a $50 gift card as a thank-you.

It was neck-and-neck, but this edition’s winner is Janina S. from Evermark. Congratulations, Janina, your consistency and hustle on IRI-Sys set the bar high. Enjoy the gift card, and thanks for being an all-star user!

Definitely not a boring week in beauty!

In this edition, allow me to fan the rumor mill with L'Occitane looking close to handing Elemis to Pai Partners for just under $1B and Marionnaud possibly trading hands too.

Meanwhile, the Saltair sale we flagged almost a month ago landed with TSG, and capital kept flowing into founder-led brands such as MERIT and Krème.

Let's dive in:

TSG Consumer signed a definitive agreement to acquire a majority stake in body care brand Saltair from THE CENTER; terms were not disclosed.

Founder Iskra Lawrence moves to chief community advocate while CEO Rachel Shelowitz stays on. It is the third beauty exit for The Center after Naturium and Phlur, and TSG's second bet out of the incubator. Learn more.

Pai Partners is reportedly in exclusive negotiations to acquire Elemis from L'Occitane Group, which is seeking just under $1B for the British skincare brand.

L'Occitane bought Elemis for $900M in 2019 and hired Morgan Stanley to run the process. Internal documents reportedly outline a plan to more than double sales over five years, per WWD.

SEMCAP Beauty & Wellness took a minority stake in MERIT, the minimalist makeup brand that has grown past $200M in sales since launching in 2021; terms were not disclosed.

The deal is led by Vasiliki Petrou, who built Unilever Prestige into a multi-billion-dollar division around Dermalogica, Tatcha, Hourglass, Paula's Choice, and K18, and who now joins MERIT's board. Founder Katherine Power's brand had previously raised roughly $40M, including a $20M Series A led by L Catterton. Learn more.

GroundForce Capital led a $25M Series C in Epicutis, the professional-channel skincare brand built on biotech-derived actives, and will join its board.

Founded in 2021 by Maxwell Stock and Princeton biophysicist Dr. Jeffry Stock out of 20+ years of Signum Biosciences R&D, Epicutis sells exclusively through 4,100+ medspas and dermatology practices. Revenue climbed from roughly $350K in year one to $13M in 2024, following a $10M Series B last June. Learn more.

Align Ventures closed an oversubscribed $125M Fund II, beating its $100M target and lifting total AUM past $2.5B.

The fund will write $2M to $10M checks into consumer companies with an eye on beauty and wellness. Recent exits include Coterie to Mammoth Brands and Touchland to Church & Dwight, with earlier wins in Hims & Hers and Billie. Learn more.

Iris Ventures took a minority stake in Krème, the French dermocosmetics brand built around microbiome science; terms were not disclosed.

It is the brand's first outside capital and Iris's fifth investment from Fund I, funding expansion across Europe and later the US, per WWD.

Amorepacific Holdings signed a strategic investment agreement with medical aesthetics company HIGHER Corporation to build out products spanning professional treatments and daily skincare. Learn more.

Katie Fang and Aliya Rachinski, Gen-Z TikTok creators with 6.6M and 2.4M followers, took equity stakes in ESW Beauty as its first creator equity partners; terms were not disclosed. Learn more.

Morrison Seger Venture Capital Partners invested in DAYLY, the oral wellness brand making circadian-aligned AM and PM toothpaste; terms were not disclosed. Learn more.

Rukam Capital led a ~$600K seed round in LNGVTY, the Mumbai-based skin longevity brand, with angel investors participating. Learn more.

BEHN, the investment vehicle of Bogart shareholder David Konckier, entered exclusive talks to acquire prestige perfumery chain Marionnaud from CK Hutchison; terms were not disclosed. Learn more.

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