Gwen Whiting secured a reported $100 million exit to a Fortune Global 500 firm when she sold her cleaning brand, Laundress, to Unilever in 2019. This was a historic moment, coming 17 years into her career as a bootstrapped creator.
Her product was pulled from shop shelves for nine months after a recall nearly four years later. Given that her non-disparagement agreement has expired, Whiting feels that her decision to sell to Unilever was a disastrous error for her brand and wants to discuss it.
To rival dry cleaners, Whiting and Lindsey Boyd launched the Laundress as a specialized product in 2002. They started with laundry, moved on to house cleaning, and set up shop in the Soho district of New York City. The founders started with a $100,000 SBA loan, then racked up a quarter of a million dollars in credit card debt over four years, choosing not to take on outside funding.
There has always been a strategic exit to be secured. “I truly thought that this company would grow beyond me and require more than just me to reach its full potential,” she adds. The eco-cleaning company Seventh Generation’s acquisition was her first choice. However, Unilever acquired Seventh Generation in 2016 for an estimated $600 million to $700 million, bolstering a portfolio that already contained Dove, Vaseline, and other famous names. That purchase eliminated the Seventh Generation from the race and increased Unilever’s standing as a possible purchaser.
Acquisition talks
A Unilever official inquired about a possible takeover when they entered the Prince Street Laundress store towards the end of 2017. Whiting found this intriguing. They “had a history of acquiring a lot of great brands,” the source states. Whiting recalls that at the Unilever office in New York, the bankers and executives of Laundress, a group of five women, made a presentation to thirteen men. They made a compelling argument that focused on the brand’s 30% organic growth on an annual sales of roughly $25 million. January 2019 saw the conclusion of Unilever’s acquisition of Laundress.
Whiting soon began to see red flags. “None of the 13 men who were involved with our brand were present the next day,” she says. “I never saw any of them again.” Since The Laundress was acquired by Unilever’s international division, she faced difficulties accessing U.S. resources, like opening a new bank account. Her co-founder, who had a two-year employment contract similar to hers, remained less engaged with the brand, according to Whiting. Boyd, who declined to comment, has since started a jewelry brand. As problems escalated, Whiting reached out to a senior Unilever U.S. executive for help, but he reportedly dismissed her concerns, stating that the brand was too small for his attention. Although the $100 million exit was significant for The Laundress, it was a small amount compared to Unilever’s $64 billion in revenue. “We were just drifting in a deep abyss,” Whiting says.
Rashes and a recall
Next, in 2022, following Whiting’s complete departure from the brand, clients of Laundress began to complain about skin rashes and other conditions. A notice alerting customers of “the possible presence of elevated levels of bacteria in some of our products” was put on The Laundress’s Instagram account in November of that year. When a buddy forwarded Whiting the post, she found out about it. For products made between January 2021 and September 2022—roughly 8 million units—the corporation issued a voluntary recall. The brand was accused of endangering the health and safety of its customers in a class-action lawsuit.
All items made after July 2023 are safe to use, according to Unilever’s current statement. When asked for comments, the company remained silent.
Founder knows best
Whiting said Unilever caused the “self-induced” catastrophe. She wants fellow founders to trust that they are the experts on their brand and to be cautious about what can happen after an acquisition. Despite investor pressure to sell, she gave in to the big-company exit since she was bootstrapping, according to her. It was a “false belief,” according to Whiting, to think that selling was the only way to expand the Laundress. “In actuality, nobody gave a damn as much as I did,” she states. “I was wrong to believe that I knew what was best.”
“This was my trademark. I was the parent of this. My entire life was this,” she explains. It hurts me deeply to see what I worked so hard to destroy.
Most founders are reluctant to discuss the “bad deal,” whether due to bruised egos, job security concerns, or fear of confronting large corporations, according to Whiting. She’s been advised to repurchase her brand, as seen in other high-profile reversals like Gregg Renfrew’s buyback of Beautycounter from Carlyle. However, she’s not interested, noting that the brand today is “unrecognizable” from what she originally created. Instead, she has launched a “private members cleaning community” and product line called Fill.
“Technically and financially, I got a good deal. But it was a bad deal for my brand, my community, and my partners,” she says. “This should have been a story of great success. I don’t want their mess. I’m ready for my clean start.”