The complaint is the latest challenge for the hair-care brand that has seen its once robust growth fizzle.
(Bloomberg) — Olaplex Holdings Inc. is facing a lawsuit filed by about 30 consumers who allege the company’s products damaged their hair and scalp.
The complaint filed Thursday accuses Olaplex of making false statements, including that its offerings restore damaged hair and provide the “ultimate breakage insurance.” The suit also claims that the company has knowingly used ingredients that cause irritation and sensitivity, contributing to a host of hair and scalp issues.
“Far from repairing and protecting hair from damage, the products have instead left plaintiffs’ hair dry, brittle, frizzy and dull,” the lawsuit alleges. They’re also experiencing hair loss and scalp injuries, according to the complaint.
In a statement, Olaplex rejected the allegations in the lawsuit and defended the “safety and efficacy of our products, which are thoroughly tested in house and by independent third-party laboratories,” adding it’s prepared to vigorously defend against the claims.
“There are a wide variety of reasons for hair breakage or hair loss, as medical and scientific experts have publicly stated, including lifestyle, various medical conditions and medications, the aftereffects of Covid, skin conditions and more,” the company said. It has declined to share copies of its research.
The suit follows other claims against Olaplex from some disgruntled customers. Last year, posts alleging the company’s products harmed hair proliferated on social media. A Facebook group where users discuss hair damage they attribute to the products has amassed more than 5,000 members since cropping up in July.
See also: Olaplex’s ‘Broke My Hair’ Problem Is a TikTok Cautionary Tale
The plaintiffs, represented by Dallas-based lawyer Amy Davis, asked a federal court in California to order Olaplex to stop what they call false and deceptive marketing. They also want unspecified monetary damages. Cosway Co., which the hair-care brand said last year was its largest manufacturer, is also named as a defendant, and didn’t immediately reply to a request for comment.
Olaplex is credited with creating the category of “bond-building” products that seek to repair hair damaged by coloring and other treatments. Amid rapid growth, the company raised $1.55 billion in an initial public offering in September 2021, which was the biggest in the US consumer-goods sector in two decades, according to data compiled by Bloomberg. Annual revenue neared $600 million in 2021.
But sales gains slowed last year. Olaplex slashed its annual forecast in October, sending its shares tumbling. The stock has rebounded this year, but is still down about 70% from its IPO.
Outstanding Question
It’s unclear what—if anything—in the company’s offerings could lead to hair loss and breakage. The question is complicated by all the factors that affect hair health, and because the company has one line of products for professionals and another for everyday consumers.
Hair gets its structure and strength from links called disulfide bonds that can be broken by heat, dyes and other aggressors, resulting in damage. Olaplex developed an ingredient that seeks to repair those bonds, according to its website.
Valerie George, a cosmetic chemist who specializes in hair, said it’s possible that some hairstylists may “come on a little more strongly” when using too many treatments such as lighteners because of Olaplex’s claims to repair damaged hair.
Carlos Wesley, a cosmetic surgeon who specializes in hair transplants and restoration, said that Olaplex seems to target appearance, not biology—meaning it doesn’t appear to address underlying potential issues with the drivers of hair growth.
And topical products that are initially effective can become less so over time, Wesley said. In theory, that means it’s possible that the amount of bond builders required to have a positive effect could grow to the point it can’t fully offset factors that cause damage, such as heat.
Breakage, Discoloration
In the lawsuit, one of the plaintiffs said she suffered hair loss, breakage and discoloration, as well as scalp irritation. Several of the customers reported hearing about the products from influencers who allegedly received marketing materials from Olaplex, according to the complaint.
The US Food and Drug Administration has received about 25 consumer complaints about the products, according to documents Bloomberg received through a public-records request.
Olaplex said in its August 2021 IPO filing that it had historically received such comments, adding that accusations could hurt the brand’s reputation regardless of their merit.
So far, the fallout has been limited. The word “breakage” has experienced the most growth in topics associated with the brand on TikTok, jumping 500% in December from a year ago, according to research published by Barclays in late January. Still, that term was mentioned in less than 1% of conversations about the brand on the social media platform.
Olaplex’s “brand equity is not as damaged” as other metrics would suggest, analysts led by Lauren Lieberman wrote.
The case is Albahae et al v. Olaplex Holdings, 2:23-cv-00982, US District Court, Central District of California (Los Angeles).
(Updates with company comment starting in fourth paragraph.)
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