{"id":23725,"date":"2026-10-16T10:00:30","date_gmt":"2026-10-16T01:00:30","guid":{"rendered":"https:\/\/tomorrowaccess.com\/?page_id=23725"},"modified":"2026-10-27T14:11:29","modified_gmt":"2026-10-27T05:11:29","slug":"s1-wella-2026","status":"publish","type":"page","link":"https:\/\/tomorrowaccess.com\/en\/s-1-journal\/s1-wella-2026","title":{"rendered":"Wella, the Salon Hair Color Brand. $62.3M in Net Income. $2.7M for the Parent."},"content":{"rendered":"<style>@import url('https:\/\/fonts.googleapis.com\/css2?family=Newsreader:ital,opsz,wght@0,6..72,400;0,6..72,500;0,6..72,600;1,6..72,400&display=swap');html,body {max-width: 100vw !important;overflow-x: hidden !important;}main,main > .entry-content,main > .wp-block-post-content,main > .wp-block-post-content.is-layout-constrained,main > .wp-block-post-content.is-layout-constrained > *,main .wp-block-group,main .wp-block-post-content {max-width: 100% !important;padding-left: 0 !important;padding-right: 0 !important;margin-left: 0 !important;margin-right: 0 !important;}main#wp--skip-link--target {padding: 0 !important;margin-top: 0 !important;max-width: 100% !important;}.s1-figure-inline {display: block;width: 100%;max-width: 100%;margin: 60px 0;padding: 0;box-sizing: border-box;}.s1-figure-inline picture {display: block;width: 100%;}.s1-figure-inline img {display: block;width: 100%;max-width: 100%;height: auto;margin: 0;}@media (max-width: 720px) {.s1-hero-grid {grid-template-columns: 1fr !important;}.s1-hero-grid > div {border-right: none !important;border-bottom: 1px solid #e6e6e6 !important;padding: 24px 12px !important;}.s1-hero-grid > div:last-child {border-bottom: none !important;}.s1-hero-grid > div > div:first-child {font-size: 32px !important;white-space: normal !important;}.s1-body-table,.s1-body-table tbody,.s1-body-table tr,.s1-body-table td,.s1-body-table th {display: block !important;width: 100% !important;max-width: 100% !important;box-sizing: border-box !important;}.s1-body-table thead {display: none !important;}.s1-body-table tr {margin-bottom: 16px !important;padding: 8px 0 !important;border-top: 1px solid #1a1a1a !important;}.s1-body-table tr:last-child {border-bottom: 1px solid #1a1a1a !important;}.s1-body-table td {text-align: left !important;padding: 6px 8px !important;}.s1-body-table td::before {content: attr(data-label) \": \";font-weight: 700 !important;color: #000 !important;}.s1-body-table td:first-child::before,.s1-body-table td[data-label=\"\"]::before {display: none !important;}.s1-light-shadow {flex-direction: column !important;}.s1-light-shadow > div {border-left: 1px solid #1a1a1a !important;border-top: 0 !important;}.s1-light-shadow > div:first-child {border-top: 1px solid #1a1a1a !important;}h1 {font-size: clamp(26px, 7vw, 34px) !important;}h2 {font-size: clamp(22px, 5.5vw, 28px) !important;}.s1-article-cta-headline {font-size: 24px !important; line-height: 1.4 !important;}}@media (max-width: 480px) {.s1-article-cta-headline {font-size: 20px !important;}}<\/style>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty; font-size: 16px; -webkit-font-smoothing: antialiased; background: #fafafa; width: 100%;\">\n<div style=\"max-width: 1000px; margin: 0 auto; padding: 80px 20px 0; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;\">\n  <a href=\"https:\/\/tomorrowaccess.com\/en\/s-1-journal\/\" style=\"text-decoration: none; color: inherit; display: block;\"><\/p>\n<div style=\"text-align: left; margin-bottom: 40px;\">\n<div style=\"width: 100%; height: 5px; background: #1a1a1a;\"><\/div>\n<div style=\"margin-top: 26px; font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 32px; font-weight: 600; color: #1a1a1a; letter-spacing: 0.01em; line-height: 1; margin-bottom: 14px;\">S-1 <span style=\"color: #daa241;\">Journal<\/span><\/div>\n<div style=\"display: flex; align-items: center; flex-wrap: wrap; gap: 14px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; margin-bottom: 26px;\">\n        <span style=\"font-size: 11px; letter-spacing: 0.18em; color: #1a1a1a; font-weight: 700; text-transform: uppercase;\">The 10 Questions<\/span><br \/>\n        <span style=\"font-size: 11px; color: #ccc;\">|<\/span><br \/>\n        <span style=\"font-size: 12px; letter-spacing: 0.02em; color: #666; font-weight: 400;\">Every S-1, decoded through the same 10 questions.<\/span>\n      <\/div>\n<div style=\"width: 100%; height: 1px; background: #daa241;\"><\/div>\n<\/p><\/div>\n<p>  <\/a>\n<\/div>\n<div style=\"max-width: 720px; margin: 0 auto; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty;\">\n<div style=\"margin: 0 0 32px 0;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 30px; font-weight: 600; letter-spacing: 0; color: #daa241; margin: 0; line-height: 1.2;\">Wella<\/p>\n<\/div>\n<h1 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(32px, 6vw, 46px); font-weight: 600; line-height: 1.2; letter-spacing: -0.01em; color: #000; margin: 0 0 40px 0; text-wrap: pretty;\">Wella, the Salon<br \/>Hair Color Brand.<br \/>$62.3M in Net Income.<br \/>$2.7M for the Parent.<\/h1>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.03em; color: #888; margin: 0 0 60px 0; border-bottom: 1px solid #e6e6e6; padding-bottom: 16px;\">Source: <a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/2125056\/000162828026063205\/wellaoperations-sx1a1.htm\" target=\"_blank\" rel=\"noopener\" style=\"color: #daa241; text-decoration: underline; text-underline-offset: 3px; text-decoration-thickness: 1px;\">The Wella Company S-1\/A (filed 2026-09-23) \u2197<\/a><\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Wella has filed to go public. It is a brand known for salon hair color, and the same company owns Clairol, OPI and ghd. The company puts its revenue retention rate for salons served by its direct sales organization at <span style=\"white-space:nowrap;\">97%<\/span> for the fiscal year ended June 30, 2026. Its name is The Wella Company. On August 31, 2026, it filed a prospectus on Form <span style=\"white-space:nowrap;\">S-1<\/span> for a listing on the New York Stock Exchange, and on September 23 it filed an amendment (<span style=\"white-space:nowrap;\">S-1<\/span>\/A). This article is based on the amendment.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">It is led by two people who have run consumer brand companies. The Chief Executive Officer is Calvin McDonald, who was <strong style=\"font-weight: 700; color: #000;\">CEO of the activewear company Lululemon from 2018<\/strong>. He joined in April 2026. The Executive Chair is Glenn K. Murphy, who was Chairman and CEO of the clothing retailer Gap. The company is controlled by the investment firm KKR.<\/p>\n<\/div>\n<div style=\"max-width: 720px; margin: 80px auto; padding: 0 20px;\">\n<div class=\"s1-hero-grid\" style=\"border-top: 1px solid #1a1a1a; border-bottom: 1px solid #1a1a1a; padding: 50px 0; display: grid; grid-template-columns: repeat(3, 1fr); gap: 0; text-align: center; align-items: start;\">\n<div style=\"padding: 0 12px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(28px, 4.5vw, 36px); font-weight: 500; line-height: 1.05; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">94%<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10.5px; letter-spacing: 0.2em; color: #daa241; margin-top: 18px; font-weight: 700; text-transform: uppercase;\">TO PREFERENCE HOLDERS<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.04em; color: #888; margin-top: 6px; font-weight: 400; line-height: 1.4;\">of net income allocated to the preference side<\/div>\n<\/p><\/div>\n<div style=\"padding: 0 12px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(28px, 4.5vw, 36px); font-weight: 500; line-height: 1.05; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">0<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10.5px; letter-spacing: 0.2em; color: #daa241; margin-top: 18px; font-weight: 700; text-transform: uppercase;\">FOR ORDINARY SHARES<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.04em; color: #888; margin-top: 6px; font-weight: 400; line-height: 1.4;\">shares for the old ordinary shares, at the assumed price<\/div>\n<\/p><\/div>\n<div style=\"padding: 0 12px;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(28px, 4.5vw, 36px); font-weight: 500; line-height: 1.05; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">$2.29B<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10.5px; letter-spacing: 0.2em; color: #daa241; margin-top: 18px; font-weight: 700; text-transform: uppercase;\">TERM LOAN<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.04em; color: #888; margin-top: 6px; font-weight: 400; line-height: 1.4;\">outstanding borrowings, June 30, 2026<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<div style=\"max-width: 720px; margin: 0 auto; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 60px 0 1.5em 0;\">Net revenue for the fiscal year ended June 30, 2026 was <span style=\"white-space:nowrap;\">$2.94<\/span> billion. <strong style=\"font-weight: 700; color: #000;\">After four years of net losses<\/strong>, the company reported net income of <span style=\"white-space:nowrap;\">$62.3<\/span> million. But <span style=\"white-space:nowrap;\">$58.71<\/span> million of that is allocated first to the holders of preference shares issued by a subsidiary. After a further <span style=\"white-space:nowrap;\">$0.9<\/span> million for the other minority shareholders, <strong style=\"font-weight: 700; color: #000;\">what is left for the parent company is <span style=\"white-space:nowrap;\">$2.7<\/span> million<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The dividends on the preference shares accrue at <span style=\"white-space:nowrap;\">6%<\/span> or <span style=\"white-space:nowrap;\">8%<\/span> a year and compound. They are not paid in cash until the shares are redeemed, and the total claim on the preference side reached <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">$3.16<\/span> billion<\/strong> at June 30. At the listing, the preference shares and ordinary shares of the old U.K. company will be exchanged for shares of the new company. The amendment says that, at the assumed offering price, the equity value of the old company as a whole falls short of the claim of its <span style=\"white-space:nowrap;\">8%<\/span> preference shares (the B preference shares). So <strong style=\"font-weight: 700; color: #000;\">nothing is left for the old company<\/strong>&rsquo;s ordinary shares, and not one new share goes to them. The number for the assumed price is still blank.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.4em 0;\">Ten questions. We lay out only what the S-1 says.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 1<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What is this company, really?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Prospectus Summary (Who We Are, p.1 onward), Business (p.118 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In one line: a company built around salon hair color that sells only hair and nail products.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The prospectus calls the company &ldquo;the world&rsquo;s <strong style=\"font-weight: 700; color: #000;\">largest <span style=\"white-space:nowrap;\">pure-play<\/span> hair and nail company<\/strong>&rdquo;. It does not sell skincare. It sells in over 100 countries and has approximately 6,000 <span style=\"white-space:nowrap;\">full-time<\/span> employees. Its headquarters are in New York.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\">We create unstoppable confidence and limitless possibility.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">WELLA S-1\/A (SEP 2026) \u2014 OUR PURPOSE<\/p>\n<\/blockquote>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">There are <strong style=\"font-weight: 700; color: #000;\">seven core brands<\/strong>. Set out with the years on the prospectus&rsquo;s timeline and what each does, they show the shape of the company.<\/p>\n<ul style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; padding-left: 24px; margin: 0 0 1.5em 0;\">\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Wella Professionals (1880): hair color and care for salons. <strong style=\"font-weight: 700; color: #000;\">More than <span style=\"white-space:nowrap;\">$1<\/span> billion in revenue<\/strong><\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Clairol (1931): <span style=\"white-space:nowrap;\">at-home<\/span> hair color in the United States<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Wella \/ Koleston (1950): <span style=\"white-space:nowrap;\">at-home<\/span> hair color in Latin America and Europe<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Sebastian Professional (1972): styling products for salons<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">OPI (1981): nail color<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Nioxin (1987): scalp health<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">ghd (2001): hair straighteners and dryers<\/li>\n<\/ul>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The starting point is 1880. In the 145 years since, the business has changed hands many times. According to the prospectus, the business that makes up the company today was once owned by Bristol Myers Squibb and Procter &amp; Gamble. It was later sold to the cosmetics group Coty.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In November 2020, the investment firm <strong style=\"font-weight: 700; color: #000;\">KKR acquired <span style=\"white-space:nowrap;\">60%<\/span> of this business from Coty<\/strong>. Coty kept <span style=\"white-space:nowrap;\">40%<\/span>. The prospectus says KKR acquired its majority stake with a vision to transform the business into &ldquo;an independent and global powerhouse&rdquo; of hair and nail brands.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Two people have been put in charge. Calvin McDonald, the CEO, <strong style=\"font-weight: 700; color: #000;\">was CEO of Lululemon<\/strong> from August 2018 to January 2026. For the five years before that, he led the Americas division of the cosmetics retailer Sephora. He came to Wella in April 2026.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Glenn K. Murphy, the Executive Chair, was Chairman and CEO of Gap from 2007 to 2014. From the resignation of the previous CEO in January 2025 until Mr. McDonald arrived, he was also the interim CEO. The pay and contracts of the two are covered in Question 7.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Today it is a private company controlled by KKR. The Wella Company, which is going public, is <strong style=\"font-weight: 700; color: #000;\">a vehicle formed in May 2025<\/strong>. The business is run by Rainbow Capital Group Limited, a U.K. company, and its subsidiaries. The financial statements in the prospectus are those of this U.K. company.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A salon brand with a <span style=\"white-space:nowrap;\">145-year<\/span> history, about six years after KKR bought it from Coty. That company is now heading for a listing.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 2<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What does it compete on?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Business (What Sets Us Apart, p.122 onward), Business (Go-to-Market Approach, p.131 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Win the salon&rsquo;s hair color first, then expand from there into care products and to consumers.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company has a name for how it competes in the professional channel: &ldquo;<strong style=\"font-weight: 700; color: #000;\">Gain with Color, Grow with Care<\/strong>&rdquo;. It means winning a salon with color and deepening the relationship with care.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Hair color takes effort to switch<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The prospectus describes hair color as &ldquo;the main revenue driver of most salons&rdquo;. And it says that a color system, once chosen, is not easily replaced.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\">Changing hair color systems for a salon incurs high switching costs and staff <span style=\"white-space:nowrap;\">re-training<\/span> requirements. As such, salons tend to be loyal to the system they choose.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">WELLA S-1\/A (SEP 2026) \u2014 BUSINESS<\/p>\n<\/blockquote>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Numbers are attached. In fiscal 2026, <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">76%<\/span> of the company<\/strong>&rsquo;s color accounts also purchased care products. On average, within one year of adopting the company&rsquo;s hair color, a salon adds four care lines.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">750 sales representatives and 300 educators<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">More than 750 sales representatives<\/strong> sell directly to salons. They sell to over 65,000 salons. Including those reached through distributors, the company as a whole serves over 250,000 hair and nail salons.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Besides the sales force, there are more than 300 educators who teach technique to stylists. There are more than 100 education sites around the world, and the programs generate over 850,000 interactions a year across approximately 60,000 salons.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company puts the &ldquo;revenue retention rate&rdquo; of the salons it sells to directly <strong style=\"font-weight: 700; color: #000;\">at <span style=\"white-space:nowrap;\">97%<\/span><\/strong>. It is net invoiced sales for the year, divided by the sum of those sales and the net invoiced sales from accounts that purchased in the prior year but did not purchase in that year. Salons that became customers during the year are not counted. In the first filing in August <strong style=\"font-weight: 700; color: #000;\">the figure was <span style=\"white-space:nowrap;\">98%<\/span><\/strong>, and the definition was also rewritten in the amendment.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">It shows in where the money goes, too. In fiscal 2026, the company dedicated approximately <span style=\"white-space:nowrap;\">10%<\/span> of net revenue to its sales force and approximately <span style=\"white-space:nowrap;\">3%<\/span> to its educators.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Taking professional credibility to the consumer shelf<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The third pillar is to extend the credibility earned in salons to ordinary consumers. Formulas made for salons are reworked for home use and sold through <span style=\"white-space:nowrap;\">e-commerce<\/span> and mass retailers.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Consumer channels rose from <strong style=\"font-weight: 700; color: #000;\">approximately <span style=\"white-space:nowrap;\">45%<\/span> of net invoiced sales in fiscal 2023 to approximately <span style=\"white-space:nowrap;\">52%<\/span><\/strong> in fiscal 2026. <span style=\"white-space:nowrap;\">E-commerce<\/span> and marketplaces account for approximately <span style=\"white-space:nowrap;\">23%<\/span>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The example the company holds up is ghd. It is a <span style=\"white-space:nowrap;\">hair-straightener<\/span> brand that began in salons, and approximately <span style=\"white-space:nowrap;\">86%<\/span> of its net invoiced sales now come from consumer channels.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Research and development is carried out at six centers by more than 300 scientists. Investment over the past five years comes to approximately <span style=\"white-space:nowrap;\">$300<\/span> million in total. New product development accounted for approximately <span style=\"white-space:nowrap;\">7%<\/span> of net revenue in fiscal 2026, a 2 point increase compared to fiscal 2023.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Enter with color, expand with care, reach the consumer. The way in is 750 sales representatives and 300 educators.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 3<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">How big is the market?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Prospectus Summary (Our Market Opportunity, p.3 onward), Industry and Market Data (p.ii onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The market the company presents is <strong style=\"font-weight: 700; color: #000;\">approximately <span style=\"white-space:nowrap;\">$120<\/span> billion<\/strong>. It is growing in the <span style=\"white-space:nowrap;\">5%<\/span> range a year.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The prospectus puts the global market for hair and nail products plus hair appliances at <strong style=\"font-weight: 700; color: #000;\">approximately <span style=\"white-space:nowrap;\">$120<\/span> billion<\/strong>. It expects growth of <strong style=\"font-weight: 700; color: #000;\">approximately <span style=\"white-space:nowrap;\">5.6%<\/span> a year<\/strong> between 2025 and 2029. The numbers come from the research firms Euromonitor and Kline.<\/p>\n<style>@media (max-width: 720px) {.s1-stat-grid {grid-template-columns: repeat(2, 1fr) !important; gap: 24px 0 !important;}}<\/style>\n<div style=\"max-width: 720px; margin: 60px auto; padding: 0 20px;\">\n<div class=\"s1-stat-grid\" style=\"border-top: 1px solid #1a1a1a; border-bottom: 1px solid #1a1a1a; padding: 40px 0; display: grid; gap: 0; text-align: center; grid-template-columns: repeat(4, 1fr);\">\n<div style=\"padding: 0 8px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(24px, 4.0vw, 32px); font-weight: 400; line-height: 1; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">$105B<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 11px; letter-spacing: 0.22em; color: #daa241; margin-top: 14px; font-weight: 700;\">HAIR &amp; NAIL<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; color: #888; margin-top: 6px; letter-spacing: 0.04em;\">hair and nail products (retail value)<\/div>\n<\/div>\n<div style=\"padding: 0 8px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(24px, 4.0vw, 32px); font-weight: 400; line-height: 1; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">$18B<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 11px; letter-spacing: 0.22em; color: #daa241; margin-top: 14px; font-weight: 700;\">PRO HAIR<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; color: #888; margin-top: 6px; letter-spacing: 0.04em;\">professional hair products (manufacturer prices)<\/div>\n<\/div>\n<div style=\"padding: 0 8px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(24px, 4.0vw, 32px); font-weight: 400; line-height: 1; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">$15B<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 11px; letter-spacing: 0.22em; color: #daa241; margin-top: 14px; font-weight: 700;\">HAIR APPLIANCES<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; color: #888; margin-top: 6px; letter-spacing: 0.04em;\">hair appliances (retail value)<\/div>\n<\/div>\n<div style=\"padding: 0 8px;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(24px, 4.0vw, 32px); font-weight: 400; line-height: 1; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">$14B<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 11px; letter-spacing: 0.22em; color: #daa241; margin-top: 14px; font-weight: 700;\">RETAIL HAIR COLOR<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; color: #888; margin-top: 6px; letter-spacing: 0.04em;\">at-home hair color (retail value)<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">All are 2025 figures, and the chart carries the note &ldquo;Not drawn to scale&rdquo;. The highest expected growth is in hair appliances, at <span style=\"white-space:nowrap;\">6.3%<\/span> a year through 2029.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company also says the market <strong style=\"font-weight: 700; color: #000;\">holds up in downturns<\/strong>. As evidence, it cites the category&rsquo;s continued growth during the 2008 to 2009 global financial crisis.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">People who have their hair colored at a salon average <strong style=\"font-weight: 700; color: #000;\">four to six visits a year<\/strong>, the company says. There are approximately 3 million salons in the world.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The channels are shifting. <span style=\"white-space:nowrap;\">E-commerce<\/span> in beauty <strong style=\"font-weight: 700; color: #000;\">grew <span style=\"white-space:nowrap;\">11.9%<\/span> a year<\/strong> from 2022 to 2025, and offline retail grew <span style=\"white-space:nowrap;\">2.9%<\/span>. The move toward consumer channels seen in Question 2 follows this trend.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A large market that grows slowly. The company&rsquo;s own revenue is about <span style=\"white-space:nowrap;\">$2.9<\/span> billion.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 4<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Who actually uses it?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Notes to Financial Statements (Note 3 Segment Information, p.F-24 onward), Risk Factors (p.24 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The buyers are salons, mass retailers and <span style=\"white-space:nowrap;\">e-commerce<\/span>. About <span style=\"white-space:nowrap;\">60%<\/span> of revenue comes from Europe, the Middle East and Asia.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">By region, Europe, the Middle East and Africa together with Asia Pacific account for <span style=\"white-space:nowrap;\">61%<\/span> of revenue, and <strong style=\"font-weight: 700; color: #000;\">the Americas for <span style=\"white-space:nowrap;\">39%<\/span><\/strong>. Only three countries have their own numbers.<\/p>\n<style>@media (max-width: 720px) {.s1-cards-grid {grid-template-columns: 1fr !important; grid-template-rows: none !important; row-gap: 20px !important;}.s1-card {display: block !important;}}<\/style>\n<div class=\"s1-cards-grid\" style=\"margin: 40px 0; display: grid; gap: 20px;grid-template-columns: repeat(3, 1fr);\">\n<div class=\"s1-card\" style=\"padding: 24px 24px; background: #ffffff; border: 1px solid #e6e6e6; border-top: 3px solid #daa241; min-width: 0; box-sizing: border-box;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 18px; font-weight: 700; line-height: 1.4; color: #1a1a1a; margin: 0 0 14px 0; padding: 0 0 10px 0; border-bottom: 1px solid #e6e6e6;\">U.S.<\/div>\n<div class=\"s1-card-data\">\n<div style=\"padding: 10px 0; line-height: 1.5;\"><span style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; color: #daa241; font-weight: 700; letter-spacing: 0.22em; display: block; margin-bottom: 4px;\">Revenue (fiscal 2026)<\/span><span style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 15px; color: #1a1a1a; font-weight: 400; display: block; word-break: normal; overflow-wrap: anywhere; line-height: 1.55;\"><span style=\"white-space:nowrap;\">$724M<\/span><\/span><\/div>\n<div style=\"padding: 10px 0; line-height: 1.5;\"><span style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; color: #daa241; font-weight: 700; letter-spacing: 0.22em; display: block; margin-bottom: 4px;\">Share of total<\/span><span style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 15px; color: #1a1a1a; font-weight: 400; display: block; word-break: normal; overflow-wrap: anywhere; line-height: 1.55;\">approx. <span style=\"white-space:nowrap;\">25%<\/span><\/span><\/div>\n<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; line-height: 1.5; letter-spacing: 0; color: #666; margin: 14px 0 0 0; padding: 12px 0 0 0; border-top: 1px solid #f0f0f0; overflow-wrap: break-word; overflow-wrap: anywhere; text-wrap: pretty;\">approx. <span style=\"white-space:nowrap;\">26%<\/span> in the prior year<\/div>\n<\/div>\n<div class=\"s1-card\" style=\"padding: 24px 24px; background: #ffffff; border: 1px solid #e6e6e6; border-top: 3px solid #daa241; min-width: 0; box-sizing: border-box;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 18px; font-weight: 700; line-height: 1.4; color: #1a1a1a; margin: 0 0 14px 0; padding: 0 0 10px 0; border-bottom: 1px solid #e6e6e6;\">Germany<\/div>\n<div class=\"s1-card-data\">\n<div style=\"padding: 10px 0; line-height: 1.5;\"><span style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; color: #daa241; font-weight: 700; letter-spacing: 0.22em; display: block; margin-bottom: 4px;\">Revenue (fiscal 2026)<\/span><span style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 15px; color: #1a1a1a; font-weight: 400; display: block; word-break: normal; overflow-wrap: anywhere; line-height: 1.55;\"><span style=\"white-space:nowrap;\">$336M<\/span><\/span><\/div>\n<div style=\"padding: 10px 0; line-height: 1.5;\"><span style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; color: #daa241; font-weight: 700; letter-spacing: 0.22em; display: block; margin-bottom: 4px;\">Share of total<\/span><span style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 15px; color: #1a1a1a; font-weight: 400; display: block; word-break: normal; overflow-wrap: anywhere; line-height: 1.55;\">approx. <span style=\"white-space:nowrap;\">11%<\/span><\/span><\/div>\n<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; line-height: 1.5; letter-spacing: 0; color: #666; margin: 14px 0 0 0; padding: 12px 0 0 0; border-top: 1px solid #f0f0f0; overflow-wrap: break-word; overflow-wrap: anywhere; text-wrap: pretty;\"><span style=\"white-space:nowrap;\">$248M<\/span> two years earlier<\/div>\n<\/div>\n<div class=\"s1-card\" style=\"padding: 24px 24px; background: #ffffff; border: 1px solid #e6e6e6; border-top: 3px solid #daa241; min-width: 0; box-sizing: border-box;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 18px; font-weight: 700; line-height: 1.4; color: #1a1a1a; margin: 0 0 14px 0; padding: 0 0 10px 0; border-bottom: 1px solid #e6e6e6;\">U.K.<\/div>\n<div class=\"s1-card-data\">\n<div style=\"padding: 10px 0; line-height: 1.5;\"><span style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; color: #daa241; font-weight: 700; letter-spacing: 0.22em; display: block; margin-bottom: 4px;\">Revenue (fiscal 2026)<\/span><span style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 15px; color: #1a1a1a; font-weight: 400; display: block; word-break: normal; overflow-wrap: anywhere; line-height: 1.55;\"><span style=\"white-space:nowrap;\">$328M<\/span><\/span><\/div>\n<div style=\"padding: 10px 0; line-height: 1.5;\"><span style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; color: #daa241; font-weight: 700; letter-spacing: 0.22em; display: block; margin-bottom: 4px;\">Share of total<\/span><span style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 15px; color: #1a1a1a; font-weight: 400; display: block; word-break: normal; overflow-wrap: anywhere; line-height: 1.55;\">approx. <span style=\"white-space:nowrap;\">11%<\/span><\/span><\/div>\n<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; line-height: 1.5; letter-spacing: 0; color: #666; margin: 14px 0 0 0; padding: 12px 0 0 0; border-top: 1px solid #f0f0f0; overflow-wrap: break-word; overflow-wrap: anywhere; text-wrap: pretty;\">home of a ghd research center<\/div>\n<\/div>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The remaining <span style=\"white-space:nowrap;\">$1.55<\/span> billion is grouped as &ldquo;other&rdquo;. The company expects the United States to be a significant driver of growth, but the U.S. share fell <strong style=\"font-weight: 700; color: #000;\">from approximately <span style=\"white-space:nowrap;\">26%<\/span> to approximately <span style=\"white-space:nowrap;\">25%<\/span><\/strong> in one year.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The buyers fall into two layers. One is salons: agreements with individual salons typically run for one year, and those with larger chains for three to five years. The other is retail and <span style=\"white-space:nowrap;\">e-commerce<\/span>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">No single customer is more than <span style=\"white-space:nowrap;\">10%<\/span> of revenue. But the risk factors say that <strong style=\"font-weight: 700; color: #000;\">three customers accounted for <span style=\"white-space:nowrap;\">19%<\/span> of net revenue<\/strong>. They are not named. The company describes its largest customers as beauty retailers, <span style=\"white-space:nowrap;\">e-commerce<\/span> platforms and the food, drug and mass channel.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">What it says about Japan<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">Revenue in Japan is not disclosed<\/strong>. The table by country has no line for Japan.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Japan does not appear often in the description of the business. It is one of the top 20 markets in which, taken together, the company says it is &ldquo;tied for #2&rdquo; in professional hair. It is one of the regions where Wella \/ Koleston is sold. And the prospectus says <strong style=\"font-weight: 700; color: #000;\">the development center for scalp health is in Tokyo<\/strong>. The risk factors name Japan as one of the key regions for competition and count the yen among the main currencies to which the company is exposed.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A Japanese company also appears in the list of competitors. Five key competitors are named in hair and nail: L&rsquo;Or&eacute;al, Henkel, Unilever, Est&eacute;e Lauder and <strong style=\"font-weight: 700; color: #000;\">Kao Corporation<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">250,000 salons, and large retail and <span style=\"white-space:nowrap;\">e-commerce<\/span> accounts. Three customers account for <span style=\"white-space:nowrap;\">19%<\/span> of revenue.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 5<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">How does it make money?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">MD&amp;A (Results of Operations, p.95 onward), Business (Supply Chain, Manufacturing and Distribution, p.135 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><span style=\"white-space:nowrap;\">68%<\/span> of revenue is left as gross profit. Most of that is used by selling, general and administrative expenses.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The way it makes money is simple. It makes products and sells them to salons and retailers. Revenue is shown in four categories.<\/p>\n<ul style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; padding-left: 24px; margin: 0 0 1.5em 0;\">\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Professional hair products: <span style=\"white-space:nowrap;\">$1.64<\/span> billion (<span style=\"white-space:nowrap;\">56%<\/span> of the total)<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\"><span style=\"white-space:nowrap;\">At-home<\/span> hair products: <span style=\"white-space:nowrap;\">$593<\/span> million (<span style=\"white-space:nowrap;\">20%<\/span>)<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Appliances such as hair straighteners (ghd): <span style=\"white-space:nowrap;\">$478<\/span> million (<span style=\"white-space:nowrap;\">16%<\/span>)<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Nail: <span style=\"white-space:nowrap;\">$232<\/span> million (<span style=\"white-space:nowrap;\">8%<\/span>)<\/li>\n<\/ul>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Gross profit for fiscal 2026 was <span style=\"white-space:nowrap;\">$2.01<\/span> billion, or <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">68.4%<\/span> of revenue<\/strong>. From that, <span style=\"white-space:nowrap;\">$1.59<\/span> billion goes out as selling, general and administrative expenses. <strong style=\"font-weight: 700; color: #000;\">That is <span style=\"white-space:nowrap;\">54%<\/span> of revenue<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Growth in fiscal 2026 was <span style=\"white-space:nowrap;\">5.1%<\/span> excluding the effect of exchange rates. According to the company, <strong style=\"font-weight: 700; color: #000;\">approximately half of that came from volume and mix<\/strong> and the remainder from net pricing. The reported growth in dollars was <span style=\"white-space:nowrap;\">9.2%<\/span>, and the difference of <span style=\"white-space:nowrap;\">$108<\/span> million is a tailwind from exchange rates.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">It makes about <span style=\"white-space:nowrap;\">60%<\/span> itself<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Three <span style=\"white-space:nowrap;\">company-owned<\/span> factories, in Germany, Mexico and Thailand, <strong style=\"font-weight: 700; color: #000;\">produce approximately <span style=\"white-space:nowrap;\">60%<\/span><\/strong> of the hair and nail products. The rest is left to over 40 <span style=\"white-space:nowrap;\">third-party<\/span> manufacturers.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">ghd is made differently. All manufacturing is outsourced. Product definition, oversight of design, sourcing and quality control stay <span style=\"white-space:nowrap;\">in-house<\/span>. ghd&rsquo;s <strong style=\"font-weight: 700; color: #000;\">gross margin in fiscal 2026 was <span style=\"white-space:nowrap;\">69%<\/span><\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company describes this as &ldquo;a vertically integrated but <span style=\"white-space:nowrap;\">asset-light<\/span> model&rdquo;. Capital expenditure in fiscal 2026 was about <span style=\"white-space:nowrap;\">$65<\/span> million, approximately <span style=\"white-space:nowrap;\">2%<\/span> of revenue.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The margins of the two segments are now nearly the same<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">There are two segments. One is hair and nail (<span style=\"white-space:nowrap;\">$2.48<\/span> billion of revenue) and the other is appliances, which consists only of ghd (<span style=\"white-space:nowrap;\">$459<\/span> million). The appliances amount does not match the <span style=\"white-space:nowrap;\">$478<\/span> million in the categories above.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The profit measure the company uses is &ldquo;Adjusted EBITDA&rdquo;. In fiscal 2026 the margin was <span style=\"white-space:nowrap;\">18.9%<\/span> in hair and nail and <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">19.8%<\/span> in appliances<\/strong>. Appliances rose from <span style=\"white-space:nowrap;\">13.8%<\/span> two years earlier and overtook hair and nail. (Adjusted EBITDA: profit before interest, taxes, depreciation and amortization, with further items the company regards as outside its core operations, such as impairments and restructuring costs, added back.)<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The hair and nail margin fell slightly from <span style=\"white-space:nowrap;\">19.3%<\/span> in the prior year. As reasons, the company cites tariffs and exchange rates pushing up cost of sales, and higher advertising spending.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A gross margin of <span style=\"white-space:nowrap;\">68%<\/span>. It makes about <span style=\"white-space:nowrap;\">60%<\/span> of its hair and nail products itself, and most of the gross profit goes to selling, general and administrative expenses.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 6<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Are the numbers healthy?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">MD&amp;A (Results of Operations, p.95 onward), Notes to Financial Statements (Note 20, p.F-64 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">It turned a profit. But whose profit is it? One step at a time.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">On the pages near the cover, the company displays its numbers in large type. Revenue of <span style=\"white-space:nowrap;\">$2.9<\/span> billion, 22 consecutive quarters of growth, Adjusted EBITDA of <span style=\"white-space:nowrap;\">$522<\/span> million. Beside the net income of <span style=\"white-space:nowrap;\">$62<\/span> million, small type adds that it follows net losses in the prior four fiscal years.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Four of five years were losses<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The risk factors say the same thing in other words: as of June 30, 2026, the company had <strong style=\"font-weight: 700; color: #000;\">net losses in four of the most recent five fiscal years<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">There is an operating profit. In fiscal 2026 it was <span style=\"white-space:nowrap;\">$243<\/span> million. From that, <span style=\"white-space:nowrap;\">$152<\/span> million goes out as interest. By this article&rsquo;s arithmetic, <strong style=\"font-weight: 700; color: #000;\">more than <span style=\"white-space:nowrap;\">60%<\/span> of operating income<\/strong> is consumed by interest on borrowings.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Interest has been coming down. Two years earlier it was <span style=\"white-space:nowrap;\">$203<\/span> million. The company attributes the decrease mainly to a lower average debt balance after it fully prepaid its <span style=\"white-space:nowrap;\">pay-in-kind<\/span> loan facility in March 2025.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\"><span style=\"white-space:nowrap;\">94%<\/span> of net income is attributable to the subsidiary&rsquo;s preference shares<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Net income for fiscal 2026 was <span style=\"white-space:nowrap;\">$62.3<\/span> million. It goes in three directions.<\/p>\n<ul style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; padding-left: 24px; margin: 0 0 1.5em 0;\">\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">To holders of the subsidiary&rsquo;s preference shares: <span style=\"white-space:nowrap;\">$58.71<\/span> million<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">To the subsidiary&rsquo;s other minority shareholders: <span style=\"white-space:nowrap;\">$0.9<\/span> million<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\"><strong style=\"font-weight: 700; color: #000;\">To the parent company: <span style=\"white-space:nowrap;\">$2.7<\/span> million<\/strong><\/li>\n<\/ul>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The preference shares carry dividends of <span style=\"white-space:nowrap;\">6%<\/span> or <span style=\"white-space:nowrap;\">8%<\/span> a year that accrue daily and are compounded once a year. The prospectus says this allocation is made <strong style=\"font-weight: 700; color: #000;\">irrespective of the company<\/strong>&rsquo;s results.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This is an attribution of income in the accounts. It does not mean that <span style=\"white-space:nowrap;\">$58.71<\/span> million was paid in cash in that year. Unpaid dividends are added to the balance of the preference shares.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\">Redeemable <span style=\"white-space:nowrap;\">non-controlling<\/span> interest holders do not have income participation rights but are allocated income sufficient to satisfy their contractual dividend rights, irrespective of the consolidated results of the Company<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">WELLA S-1\/A (SEP 2026) \u2014 MD&amp;A<\/p>\n<\/blockquote>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Indeed, in fiscal 2024, when the company as a whole had a net loss of <span style=\"white-space:nowrap;\">$115<\/span> million, <span style=\"white-space:nowrap;\">$46.9<\/span> million was allocated to this line. The allocation has risen each year.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The parent has preference shares of the same design<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">There is one more movement that does not appear in the income statement. The parent itself has issued preference shares, and these also accrue at <span style=\"white-space:nowrap;\">6%<\/span> and <span style=\"white-space:nowrap;\">8%<\/span> a year. No cash is paid. In the accounts, the carrying amount of the preference shares is increased, and nearly the same amount is added to the accumulated deficit.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This adjustment was <span style=\"white-space:nowrap;\">$168<\/span> million in fiscal 2026. Two years earlier it was <span style=\"white-space:nowrap;\">$134<\/span> million. Because it compounds, it grows every year.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Taken together, the claim on the preference side increased by about <span style=\"white-space:nowrap;\">$227<\/span> million in one year. That is <strong style=\"font-weight: 700; color: #000;\">3.6 times the net income<\/strong> of the same year. The balance at June 30 was <span style=\"white-space:nowrap;\">$3.16<\/span> billion, larger than the borrowings of <span style=\"white-space:nowrap;\">$2.29<\/span> billion.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Total equity is <strong style=\"font-weight: 700; color: #000;\">negative <span style=\"white-space:nowrap;\">$1.53<\/span> billion<\/strong>. The auditor&rsquo;s report carries no note raising doubt about the company&rsquo;s ability to continue. Cash is <span style=\"white-space:nowrap;\">$322<\/span> million, and operations brought in <span style=\"white-space:nowrap;\">$225<\/span> million of cash in fiscal 2026.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">It wrote the trademarks of a brand it bought down to zero over three years<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">One of the items that has weighed on profit is the <span style=\"white-space:nowrap;\">write-down<\/span> of trademarks. It has been recorded three years running and comes to <span style=\"white-space:nowrap;\">$278<\/span> million in total.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The largest is Briogeo. It is a hair care brand acquired in fiscal 2022, and across its U.S. and international trademarks the company wrote off <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">$194.7<\/span> million<\/strong> over three years. In fiscal 2026 the carrying value went to zero. The stated reason is that sales fell short of expectations.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In fiscal 2026 the company also wrote down the OPI trademark by <span style=\"white-space:nowrap;\">$15.5<\/span> million. The company itself writes that, for three trademarks including OPI, the risk of further <span style=\"white-space:nowrap;\">write-downs<\/span> has increased.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Item<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Fiscal 2026<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Fiscal 2025<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Fiscal 2024<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Net revenue<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$2,939.1M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$2,692.2M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$2,590.3M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Operating income<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$243.3M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$228.6M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$47.5M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Interest expense, net<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$151.8M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$177.9M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$203.3M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Net income (loss)<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$62.3M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$8.7M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$115.2M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">of which, to the subsidiary&rsquo;s preference shares<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$58.7M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$50.7M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$46.9M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">of which, to other minority shareholders<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$0.9M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$14.8M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$39.4M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">of which, to the parent company<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$2.7M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$44.6M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">\u2212<span style=\"white-space:nowrap;\">$122.7M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Adjusted EBITDA<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$522.2M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$474.0M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$415.3M<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Net cash provided by operating activities<\/td>\n<td data-label=\"Fiscal 2026\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$224.6M<\/span><\/td>\n<td data-label=\"Fiscal 2025\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$173.1M<\/span><\/td>\n<td data-label=\"Fiscal 2024\" style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$73.2M<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The business itself earns money. Interest and the claim of the preference shares stand in line ahead of what comes after.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 7<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Who runs it?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Management (p.146 onward), Executive Compensation (p.153 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The two people from Question 1, seen through their contracts and pay. The CEO started in April 2026.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Calvin McDonald, the Chief Executive Officer, is 54. <strong style=\"font-weight: 700; color: #000;\">He started on April 2, 2026<\/strong>, less than six months before the date the amendment was filed.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The man who led Lululemon<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">As seen in Question 1, Mr. McDonald came by way of Lululemon and Sephora. He is currently also <strong style=\"font-weight: 700; color: #000;\">a director of The Walt Disney Company<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The offer letter the company gave him is dated January 29, 2026. The annual base salary is <span style=\"white-space:nowrap;\">$1.5<\/span> million. The <span style=\"white-space:nowrap;\">one-time<\/span> signing bonus is <span style=\"white-space:nowrap;\">$600,000,<\/span> to be repaid if, among other cases, he resigns without good reason within two years.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The risk factors describe this appointment candidly.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\">Our Chief Executive Officer is new to the Company as of April 2026, and we expect it will take some transition time for him to learn the people, business, finance and systems of the Company.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">WELLA S-1\/A (SEP 2026) \u2014 RISK FACTORS<\/p>\n<\/blockquote>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">A little over a year under an interim CEO<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">The previous CEO resigned in January 2025<\/strong>. The prospectus does not give the name. The company writes that it agreed to repurchase the securities that person held at an amount higher than the original subscription cost.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Until a successor arrived, Glenn K. Murphy, the Executive Chair, was also the interim CEO. He is 64. He was Chairman and CEO of the clothing retailer Gap from 2007 to 2014. From 2017 to 2023 he was a director of Lululemon.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Mr. Murphy&rsquo;s role as interim CEO ended on April 2. His base salary went from <span style=\"white-space:nowrap;\">$1.1<\/span> million a year as interim CEO to <span style=\"white-space:nowrap;\">$200,000.<\/span> His service as Executive Chair ends automatically no later than two years after the listing.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Most of the pay is tied to ordinary shares<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Mr. McDonald&rsquo;s compensation for fiscal 2026 <strong style=\"font-weight: 700; color: #000;\">totals <span style=\"white-space:nowrap;\">$21.46<\/span> million<\/strong>. He was with the company for three months. Of that, about <span style=\"white-space:nowrap;\">$20.0<\/span> million is the <span style=\"white-space:nowrap;\">grant-date<\/span> fair value of a stock award made on June 26. It is not an amount received in cash.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The award is a right to receive 567,677 ordinary shares of the old company. It vests <span style=\"white-space:nowrap;\">25%<\/span> a year over four years, subject to his continued service and to an event such as a listing taking place. The prospectus notes that Mr. McDonald&rsquo;s award relates &ldquo;<strong style=\"font-weight: 700; color: #000;\">solely to Ordinary Shares<\/strong>&rdquo;.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The statement covered in Question 8 extends to this type of stock award as well. The amendment says that, at the assumed price, restricted stock units that would have vested into ordinary shares of the old company also receive no shares or stock units of the new company. The new stock awards that the company intends to grant at its discretion in connection with the offering are a separate grant. Executives are among those eligible, and the number and the amount are blank.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Mr. Murphy&rsquo;s compensation was <span style=\"white-space:nowrap;\">$9.63<\/span> million. Of the award covering 220,000 ordinary shares granted in February 2026, the part covering 106,667 shares carries a condition. After the listing, it vests only if KKR achieves a multiple on its invested capital of <strong style=\"font-weight: 700; color: #000;\">2.25 times or greater<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Among the other executives, alumni of L&rsquo;Or&eacute;al stand out. They are Hugo Kunetz, who oversees sales, Yannis Rodocanachi in marketing, and Jeroen Temmerman, the CEO of ghd. Each of the three spent 18 to more than 20 years at L&rsquo;Or&eacute;al.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A CEO who came in April 2026 and a chair who filled in. For both, an event such as a listing is among the conditions for their stock awards to vest.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 8<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Who controls it?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Prospectus Summary (Organizational Structure, p.14 onward), Certain Relationships and Related Party Transactions (p.176 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">KKR holds it. The listing does not change that.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">After the listing KKR will <strong style=\"font-weight: 700; color: #000;\">continue to hold a majority of the voting power<\/strong>, the prospectus says. The percentage is blank. The company will be a &ldquo;<span style=\"white-space:nowrap;\">controlled company<\/span>&rdquo; under the exchange&rsquo;s rules and can be exempt from requirements such as having a majority of independent directors.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Coty&rsquo;s stake changed shape over five years<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Coty, which kept <span style=\"white-space:nowrap;\">40%<\/span> in November 2020, reduced its stake to <span style=\"white-space:nowrap;\">25.9%<\/span> the following year. KKR went to <span style=\"white-space:nowrap;\">74.1%<\/span>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In December 2025, Coty sold its remaining <span style=\"white-space:nowrap;\">25.8%<\/span> to another company. That company is owned <span style=\"white-space:nowrap;\">77.5%<\/span> by the KKR side and <span style=\"white-space:nowrap;\">22.5%<\/span> by Coty. The prospectus explains that Coty thereby ceased to be a direct shareholder and holds <strong style=\"font-weight: 700; color: #000;\">only an indirect, <span style=\"white-space:nowrap;\">non-voting<\/span> interest<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The chart of the structure after the listing shows two KKR investment vehicles, management and the new shareholders. Coty&rsquo;s name sits above one of the KKR vehicles.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The order of the exchange: preference shares first, ordinary shares after<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">At, or substantially concurrently with, the completion of the offering, the shares of the old U.K. company are to be exchanged for shares of the new company that is going public. The old company has three kinds of shares: A1 preference shares that accrue at <span style=\"white-space:nowrap;\">6%<\/span> a year, B preference shares at <span style=\"white-space:nowrap;\">8%<\/span>, and ordinary shares.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The order of the exchange is fixed. First, the A1 preference shares receive a number of shares equal to their principal plus accrued dividends, divided by the offering price. Next, the B preference shares receive shares by the same calculation. <strong style=\"font-weight: 700; color: #000;\">If anything remains, it goes to the ordinary shares<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In the section that explains how the company is organized, the amendment says this about what &ldquo;remains&rdquo;.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\">no residual equity value will be attributable to the outstanding ordinary shares of RCGL or to restricted stock units that would have vested into ordinary shares of RCGL<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">WELLA S-1\/A (SEP 2026) \u2014 ORGANIZATIONAL STRUCTURE<\/p>\n<\/blockquote>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The reason is given too. The equity value of the old company as a whole, calculated at the assumed offering price (the midpoint of the price range), is less than the total claim of the B preference shares. The claim of the B preference shares is reduced based on that total equity value. Holders of the ordinary shares <strong style=\"font-weight: 700; color: #000;\">receive neither shares nor stock units of the new company<\/strong>. Note that the description of the exchange covers the shares of the old company. The part of the subsidiary&rsquo;s preference shares held by parties other than the parent (<span style=\"white-space:nowrap;\">$808<\/span> million at June 30) does not appear in this description.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This is <strong style=\"font-weight: 700; color: #000;\">language added in the amendment<\/strong>. The first filing in August said the ordinary shares, too, would be exchanged for new shares based on a ratio, which was left blank. The price range itself is still blank in the amendment.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The Executive Compensation chapter says the B preference shares and ordinary shares employees purchased through the company program will be exchanged for fully vested shares of common stock in connection with the offering. That sentence is unchanged from the August filing.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Who holds the ordinary shares? According to the cover, a KKR investment vehicle holds ordinary shares, A1 preference shares and B1 preference shares of the old company. Executives and employees have also bought B preference shares and ordinary shares through a company program. The CEO&rsquo;s stock award seen in Question 7 relates solely to ordinary shares.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company also writes that, in connection with the offering, it intends to make a discretionary grant of new stock awards to eligible participants. Half vests at the time of grant. The number and the amount are blank.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The rights KKR keeps<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Under a stockholders agreement to be entered into at the listing, KKR can nominate directors in proportion to its holding. With <span style=\"white-space:nowrap;\">50%<\/span> or more, a majority. Until it falls below <span style=\"white-space:nowrap;\">5%<\/span>, it can nominate at least <span style=\"white-space:nowrap;\">10%<\/span> of the seats.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">While its holding is <span style=\"white-space:nowrap;\">25%<\/span> or more, KKR&rsquo;s approval is required for significant company decisions. These include <strong style=\"font-weight: 700; color: #000;\">appointing and removing the CEO<\/strong>, acquisitions or disposals of more than <span style=\"white-space:nowrap;\">$100<\/span> million, and transactions in which control of the company changes hands.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The committee that will set executive pay, to be in place at the listing, has three members. The prospectus says the board has determined that all three are &ldquo;independent&rdquo;. Of them, Nancy Ford is <strong style=\"font-weight: 700; color: #000;\">a Partner at KKR<\/strong>, and Sir Roger Carr has been a Senior Advisor to KKR since 2000. Elsewhere in the same chapter, a sentence remains saying the board has not yet made a determination on the independence of any directors.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The certificate of incorporation will also include a provision under which the company renounces any interest in business opportunities presented to KKR and its affiliated funds, or to any director who is not employed by the company.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In connection with the listing, the old company&rsquo;s three kinds of shares are put through an exchange for common stock of the new company. How many shares each receives depends on the order of the claims and on the offering price.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 9<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What is it afraid of?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Risk Factors (p.24 onward), Notes to Financial Statements (Note 18, p.F-62 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Of the worries the company itself lists, this article looks at five.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">More people leaving their gray hair uncolored<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The risk factors name the trend outright. If the &ldquo;<strong style=\"font-weight: 700; color: #000;\">embracing gray<\/strong>&rdquo; trend continues, demand for hair color could decline.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The opposite worry is written down too. If the trend of hair care becoming as elaborate as skincare were to stop, care products would be affected. The risk factors also touch on the possibility that consumers shift their spending to skincare, which the company does not sell. Hair color represents &ldquo;a significant portion&rdquo; of net revenue, the company writes.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Lawsuits over hair color and cancer<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company is party to numerous cases in California and New York. They allege that hair dye products, including Wella Professionals and Clairol, <strong style=\"font-weight: 700; color: #000;\">caused bladder cancer<\/strong>. The number of cases is not given. The company <strong style=\"font-weight: 700; color: #000;\">has not currently established loss reserves<\/strong> for this kind of claim.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">There is also litigation over hair relaxers. The products at issue were made and sold by predecessor companies decades before the current company acquired the business. The company writes that <strong style=\"font-weight: 700; color: #000;\">it has never manufactured them<\/strong>. Even so, plaintiffs assert claims based on the liability of a successor. Of this litigation, the company writes that the outcome is uncertain and that a material adverse effect is possible. At the same time, of its current legal proceedings in general, it also writes that it does not believe an adverse outcome would result in a material burden.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\"><span style=\"white-space:nowrap;\">$40<\/span> million over digital content<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The risk factors say the company is in disputes with third parties over the use of copyrighted music in its digital content. The notes to the financial statements give an amount for disputes over intellectual property relating to digital content. No litigation has been filed.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In fiscal 2026 the company accrued <span style=\"white-space:nowrap;\">$2<\/span> million for estimated losses. Then, after the year ended and before the financial statements were issued, it revised the estimate and added <span style=\"white-space:nowrap;\">$38<\/span> million. <strong style=\"font-weight: 700; color: #000;\">The total is <span style=\"white-space:nowrap;\">$40<\/span> million<\/strong>. Saying that <span style=\"white-space:nowrap;\">$28<\/span> million is expected to be recovered from insurance, it recognized that amount in the same year as well.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Variable rates, and nearly <span style=\"white-space:nowrap;\">$2.3<\/span> billion of borrowings<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The borrowings of <span style=\"white-space:nowrap;\">$2.29<\/span> billion all carry variable interest rates and fall due in a single repayment in February 2029. By the company&rsquo;s estimate, a change of <span style=\"white-space:nowrap;\">1%<\/span> in the interest rate would increase or decrease annual interest by <strong style=\"font-weight: 700; color: #000;\">approximately <span style=\"white-space:nowrap;\">$22.9<\/span> million<\/strong>. The agreement has no provision requiring transactions that limit movements in interest rates.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">As of June 30, there were contracts that fixed the rate on part of the borrowings. The notional amount was <span style=\"white-space:nowrap;\">$620<\/span> million, down from <span style=\"white-space:nowrap;\">$1.57<\/span> billion a year earlier. In the table in the notes, the three contracts all mature in August 2026.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">People finding it easier to leave<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">When the listing is completed, all the shares employees bought through the company&rsquo;s program vest in full. The company names this as a factor that makes retention harder. That the CEO is new is written in the same paragraph.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">On internal control, <strong style=\"font-weight: 700; color: #000;\">two material weaknesses<\/strong> were identified in fiscal 2024: one in accounting for income taxes, and one in the foreign currency translation of goodwill and intangible assets held at the corporate level. The company writes that both were remediated in the following fiscal year.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Trends, lawsuits, copyright, interest rates, people. The habit of coloring hair is itself counted among the risks.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 10<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What becomes of the money it raises?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Use of Proceeds (p.81 onward), Underwriting (Conflicts of Interest) (p.199 onward) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 14px; line-height: 1.6; color: #888; letter-spacing: 0.01em; margin: 0 0 1.5em 0; padding: 16px 20px; background: #f5f5f5; border-left: 3px solid #888;\">Note: This analysis draws only on the facts in the S-1 (and its amendments). The final IPO price, listing date, post-listing share performance, and trading demand are public information that emerged after the filing, and fall outside its scope.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">There are two uses: repaying borrowings and paying taxes.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The number of shares to be sold, the price range and the amount to be raised are all still blank in the amendment. <strong style=\"font-weight: 700; color: #000;\">Only the company sells shares<\/strong>, and nothing in the document says that KKR or other shareholders will sell their holdings.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Repaying the borrowings with new borrowings and the proceeds<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The first use is to <strong style=\"font-weight: 700; color: #000;\">repay the existing borrowings of <span style=\"white-space:nowrap;\">$2.29<\/span> billion in full<\/strong>. At the time of the listing the company will enter into a new credit agreement and repay with those borrowings and the proceeds together.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The new agreement provides for three term loans, of EUR 850 million, <span style=\"white-space:nowrap;\">$500<\/span> million and GBP 100 million, and a revolving facility of <span style=\"white-space:nowrap;\">$500<\/span> million. Repayment is due five years from the first borrowing. The initial margin is <span style=\"white-space:nowrap;\">2.25%<\/span>. That is lower than the <span style=\"white-space:nowrap;\">3.25%<\/span> to <span style=\"white-space:nowrap;\">4.50%<\/span> (it differs by currency) that applied under the current agreement at June 30.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">One of the lenders to be repaid is <strong style=\"font-weight: 700; color: #000;\">an affiliate of KKR<\/strong>. As of June 30 it held <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">$38.1<\/span> million<\/strong> of the loans. The company writes that its terms are substantially the same as those of the other lenders. The prospectus has a space for the amount of principal, interest and fees this lender will receive in the repayment. The number is blank.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Paying the taxes on the share exchange<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The second use is for the company to remit the taxes due on the shares that employees and executives receive in the share exchange and through stock awards. This amount is also blank.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The first filing in August said the remainder would be used for general corporate purposes. <strong style=\"font-weight: 700; color: #000;\">In the amendment, that sentence is gone<\/strong>. The risk factor saying that management has broad discretion over the use of proceeds was removed along with it.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The money that flows to KKR in the listing<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Nothing in the document says KKR will sell shares. But the document does set out what the KKR side receives in connection with the listing.<\/p>\n<ul style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; padding-left: 24px; margin: 0 0 1.5em 0;\">\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Repayment as a lender (as seen above)<\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">Underwriting fees: KKR Capital Markets is listed <strong style=\"font-weight: 700; color: #000;\">third among the 21 underwriters<\/strong><\/li>\n<li style=\"margin-bottom: 0.6em; padding-left: 1.5em; text-indent: -1.5em;\">A fee for ending the advisory agreement: the agreement, with annual fees of about <span style=\"white-space:nowrap;\">$4.6<\/span> million (<span style=\"white-space:nowrap;\">75%<\/span> of which goes to KKR), ends at the listing, and the future fees, discounted to present value, are paid from cash on hand<\/li>\n<\/ul>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Because an affiliate of the controlling shareholder is among the underwriters, the offering is conducted in accordance with the rule on conflicts of interest. Goldman Sachs has agreed to act as the qualified independent underwriter that reviews the document from an independent position.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The underwriters also include the U.S. units of Japan&rsquo;s Mizuho and MUFG. The listing is to be on the New York Stock Exchange under the symbol WELA. The company, its executives and substantially all existing shareholders agree not to sell shares for 180 days.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The company writes that it has no current plans to pay dividends on its common stock.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Item<\/th>\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Detail<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Exchange<\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">New York Stock Exchange (symbol: WELA)<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Shares offered, price range<\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Blank (the <span style=\"white-space:nowrap;\">S-1<\/span>\/A)<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Who sells shares<\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">The company only<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Use of proceeds<\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Full repayment of borrowings; taxes on the share exchange<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">New credit facilities<\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">EUR 850 million + <span style=\"white-space:nowrap;\">$500<\/span> million + GBP 100 million; revolving facility of <span style=\"white-space:nowrap;\">$500<\/span> million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Underwriters<\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">21. The representatives are Goldman Sachs and BofA Securities<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td data-label=\"Item\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">Lock-up<\/span><\/td>\n<td data-label=\"Detail\" style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">180 days<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The money raised goes to repaying borrowings and to taxes. No amount is stated for the business.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.25em; font-weight: 700; color: #daa241; margin: 120px 0 12px 0; text-transform: uppercase;\">In closing<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 20px 0;\">Beyond the ten questions<\/h2>\n<div style=\"width: 140px; height: 4px; background: #daa241; margin: 0 0 40px 0;\"><\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">What The Wella Company sells is a long relationship with salons. Switching hair color takes effort, and the revenue retention rate of the salons it sells to directly is <span style=\"white-space:nowrap;\">97%<\/span>. It layers care products on top and extends to the consumer shelf. Revenue is <span style=\"white-space:nowrap;\">$2.9<\/span> billion, the gross margin is <span style=\"white-space:nowrap;\">68%<\/span>, and operations brought in <span style=\"white-space:nowrap;\">$225<\/span> million of cash in fiscal 2026.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">But above those earnings stand those who take first. First come the lenders: interest takes more than <span style=\"white-space:nowrap;\">60%<\/span> of operating income. Next come the preference shares, whose claim increased by about <span style=\"white-space:nowrap;\">$227<\/span> million in fiscal 2026. Of the <span style=\"white-space:nowrap;\">$62.3<\/span> million of net income, <span style=\"white-space:nowrap;\">$2.7<\/span> million was attributable to the parent company.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In the listing, the preference shares and other securities of the old company are exchanged for common stock of the company going public. The amendment wrote that, at the assumed price, the claim of the B preference shares exceeds the equity value of the old company, and no new shares go to the old company&rsquo;s ordinary shares. This description of the exchange is about the shares of the old company. The treatment of the preference shares issued by the subsidiary (<span style=\"white-space:nowrap;\">$808<\/span> million at June 30) does not appear in this description. The money raised goes to repaying borrowings and to taxes.<\/p>\n<\/div>\n<div style=\"max-width: 720px; margin: 80px auto; padding: 0 20px;\">\n<div class=\"s1-light-shadow\" style=\"display: flex; align-items: stretch;\">\n<div style=\"flex: 1 1 0; min-width: 0; box-sizing: border-box; border: 1px solid #1a1a1a; overflow-wrap: break-word; background: #ffffff; display: flex; flex-direction: column;\">\n<div style=\"background: #c4922e; padding: 20px 28px; text-align: center;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; letter-spacing: 0.25em; color: rgba(255,255,255,0.7); font-weight: 700; margin: 0 0 4px 0;\">LIGHT<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 600; color: #ffffff; margin: 0;\">Light<\/h3>\n<\/p><\/div>\n<div style=\"padding: 28px; background: #ffffff; flex: 1;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 16px; line-height: 1.65; color: #1a1a1a; margin: 0; overflow-wrap: break-word;\"><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;Revenue of <span style=\"white-space:nowrap;\">$2.94<\/span> billion, with 22 consecutive quarters of growth (excluding the effect of exchange rates)<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;A gross margin of <span style=\"white-space:nowrap;\">68.4%<\/span>, and Adjusted EBITDA of <span style=\"white-space:nowrap;\">$522<\/span> million<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;A revenue retention rate of <span style=\"white-space:nowrap;\">97%<\/span> for salons it sells to directly<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;Cash from operations tripled in two years, to <span style=\"white-space:nowrap;\">$225<\/span> million<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0;\">&bull;&nbsp;Interest fell in two years from <span style=\"white-space:nowrap;\">$203<\/span> million to <span style=\"white-space:nowrap;\">$152<\/span> million<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<div style=\"flex: 1 1 0; min-width: 0; box-sizing: border-box; border: 1px solid #1a1a1a; border-left: 0; overflow-wrap: break-word; background: #ffffff; display: flex; flex-direction: column;\">\n<div style=\"background: #1a1a1a; padding: 20px 28px; text-align: center;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; letter-spacing: 0.25em; color: rgba(255,255,255,0.5); font-weight: 700; margin: 0 0 4px 0;\">SHADOW<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 600; color: #ffffff; margin: 0;\">Shadow<\/h3>\n<\/p><\/div>\n<div style=\"padding: 28px; background: #ffffff; flex: 1;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 16px; line-height: 1.65; color: #1a1a1a; margin: 0; overflow-wrap: break-word;\"><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;Net losses in four of the most recent five fiscal years. Total equity is negative <span style=\"white-space:nowrap;\">$1.53<\/span> billion<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;<span style=\"white-space:nowrap;\">94%<\/span> of net income goes to the preference side. Its claim increased by <span style=\"white-space:nowrap;\">$227<\/span> million in one year<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;At the assumed price, nothing is left for the old company&rsquo;s ordinary shares<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0 0 0.6em 0;\">&bull;&nbsp;The borrowings of <span style=\"white-space:nowrap;\">$2.29<\/span> billion carry variable rates. The uses of proceeds are repayment and taxes<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; word-break:normal; margin:0;\">&bull;&nbsp;KKR keeps a majority after the listing. The CEO started in April 2026<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<div style=\"max-width: 720px; margin: 0 auto; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0;\">The prospectus introduces the company as the world&rsquo;s largest <span style=\"white-space:nowrap;\">pure-play<\/span> hair and nail company and says KKR acquired its majority stake with a vision to transform it into &ldquo;an independent and global powerhouse&rdquo; of hair and nail brands. The numbers show that the business itself earns money. And the same document also sets out who receives those earnings, and in what order. The price range and the number of shares are not yet filled in. When they are, how many shares the old company&rsquo;s preference shares turn into, and what percentage of the whole the new shareholders hold, will become numbers for the first time.<\/p>\n<\/div>\n<div style=\"background: #000000; padding: 80px 40px; text-align: center; margin-top: 80px;\">\n<div class=\"s1-article-cta-headline\" style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 32px; font-weight: 400; color: #fafafa; line-height: 1.5; text-wrap: pretty;\">A great company, or a mediocre one?<br \/>That judgment is now in your hands.<\/div>\n<div style=\"width: 240px; height: 4px; background: #daa241; margin: 30px auto 0;\"><\/div>\n<\/div>\n<div style=\"max-width: 720px; margin: 40px auto 0; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;\">\n<p style=\"font-size: 12px; line-height: 1.7; color: #888; letter-spacing: 0.02em; margin: 0;\">Source: All facts are drawn from The Wella Company&#8217;s S-1\/A (accession 0001628280-26-063205, filed 2026-09-23), together with the original Form S-1 (accession 0001628280-26-059572, filed 2026-08-31), used only for the statements about what the first filing in August said.<\/p>\n<\/div>\n<div style=\"max-width: 720px; margin: 16px auto; padding: 0 20px;\"><a href=\"https:\/\/tomorrowaccess.com\/en\/s-1-journal\/\" style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 16px; font-weight: 700; color: #daa241; text-decoration: none; letter-spacing: 0.02em;\">\u2190 Back to S-1 Journal<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>S-1 Journal The 10 Questions | Every S-1, decoded through the same 10 questions. Wella Wella, the SalonHair Co [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":24339,"parent":20744,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_yoast_wpseo_focuskw":"Wella S-1","_yoast_wpseo_title":"Wella S-1: $62.3M in Net Income, $2.7M for the Parent %%sep%% %%sitename%%","_yoast_wpseo_metadesc":"Wella&rsquo;s S-1, decoded. 94% of its $62.3 million net income was attributable to a subsidiary&rsquo;s preference shares. At the assumed price, old ordinary shares get nothing.","_yoast_wpseo_canonical":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_uag_custom_page_level_css":"","eventcal-data-date-start":"","eventcal-data-date-end":"","eventcal-data-url":"","eventcal-data-place":"","eventcal-data-capacity":"","eventcal-data-ticket":"","eventcal-data-report":"","eventcal-data-note":"","mentoring-company":"","mentoring-position":"","mentoring-name":"","mentoring-url":"","mentoring-text-top":"","mentoring-text-01":"","mentoring-text-02":"","mentoring-text-03":"","mentoring-images":"","mentoring-logo":"","expert-pitch-data-thumbnail":"https:\/\/www.youtube.com\/embed\/M7DlaXKYhLw","expert-pitch-data-youtube":"","expert-pitch-data-date":"2022.03.01 TUE 12:00-13:00","expert-pitch-data-name":"Global Brain, Partner US office \u4e00\u5bae \u7fd4\u5e73\u6c0f","expert-pitch-data-excerpt":"\u91d1\u878d\u5e02\u5834\u304c\u5927\u304d\u304f\u5909\u308f\u308d\u3046\u3068\u3057\u3066\u3044\u307e\u3059\u3002 \u3053\u308c\u307e\u3067\u306f\u65e7\u6765\u306e\u9280\u884c\u304c\u307b\u307c\u5168\u3066\u306e\u6a5f\u80fd\u3092\u6301\u3063\u3066\u3044\u307e\u3057\u305f\u304c\u3001\u304a\u91d1\u3092\u8caf\u3081\u308b\u3001\u9001\u91d1\u3059\u308b\u3001\u6c7a\u6e08\u3059\u308b\u3001\u306a\u3069\u306e\u6a5f\u80fd\u304c\u7d30\u5206\u5316\u3057\u3066\u3001\u3055\u307e\u3056\u307e\u306a\u4eba\u304c\u500b\u3005\u306e\u30b5\u30fc\u30d3\u30b9\u3092\u63d0\u4f9b\u3067\u304d\u308b\u6642\u4ee3\u306b\u306a\u308a\u307e\u3057\u305f\u3002 \u3055\u3089\u306bAI\u306e\u6280\u8853\u3084\u81a8\u5927\u306a\u91cf\u3092\u51e6\u7406\u3067\u304d\u308b\u6280\u8853\u3001\u30d6\u30ed\u30c3\u30af\u30c1\u30a7\u30fc\u30f3\u6280\u8853\u306a\u3069\u3082\u6210\u719f\u3057\u3066\u304d\u305f\u3053\u3068\u3082\u3042\u308a\u3001\u305d\u306e\u52d5\u304d\u306f\u52a0\u901f\u3057\u3066\u3044\u307e\u3059\u3002 \u52d5\u304d\u304c\u6fc0\u3057\u3044\u30d5\u30a3\u30f3\u30c6\u30c3\u30af\u306b\u3064\u3044\u3066\u3001\u6295\u8cc7\u304c\u6d3b\u767a\u3067\u3001\u4eca\u5e74\u306f\u30b0\u30ed\u30fc\u30d0\u30eb\u6295\u8cc7\u3068Fintech\u306a\u3069\u306b\u3082\u6ce8\u529b\u3055\u308c\u3066\u3044\u304fGlobal Brain Partner \u4e00\u5bae\u6c0f\u3068\u6700\u65b0\u60c5\u5831\u3092\u304a\u5c4a\u3051\u3057\u307e\u3059\u3002","expert-pitch-data-download-file":"","expert-pitch-data-peatix":"","expert-pitch-data-whitepaper-show":false,"common-label-text":"","_locale":"en_US","_original_post":"https:\/\/tomorrowaccess.com\/?page_id=23634","footnotes":""},"class_list":["post-23725","page","type-page","status-publish","has-post-thumbnail","hentry","en-US"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Wella S-1: $62.3M in Net Income, $2.7M for the Parent | Tomorrow Access<\/title>\n<meta name=\"description\" content=\"Wella&rsquo;s S-1, decoded. 94% of its $62.3 million net income was attributable to a subsidiary&rsquo;s preference shares. 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