A MESS FOR JESS

Alba’s Honest flop

Sales growth at the Honest Company stalled in 2017, as product woes continued and the consumer-goods startup co-founded by actress Jessica Alba, photo, lost its unicorn status, according to people familiar with the matter.

Annual sales at the 6-yearold company, which reached $300 million in 2016, were roughly flat last year, the people said. In late September, Honest raised funds from existing investors at a valuation of less than $1 billion, substantially less than the $1.7 billion the company was valued at in 2015, they said.

The comedown reflects how Honest—which markets its wares, including diapers, household cleaners and cosmetics, as safer and more ecologically friendly than rival brands — has struggled to achieve sustainable growth after being hobbled in recent years by product problems.

The company has conducted voluntary recalls of its baby powder and baby wipes, reformulated its laundry detergent after The Wall Street Journal reported on an ingredient-labeling issue, and battled class-action lawsuits over its ingredients and claims.

When Honest last raised money, in the summer of 2015, its revenue was growing at a rapid clip. From 2013 to 2016, sales rose from $60 million to $300 million, and the company was seen as an upstart competitor to household and personal-care products giants such as Procter & Gamble and Kimberly-Clark.

In 2016, Honest was in talks to sell itself to Unilever, but the consumer-products firm ended up acquiring one of Honest’s main rivals. An initial public offering was also considered at one point.

Now, faced with no quick exit for its shareholders, who have collectively pumped more than $300 million into the Santa Monica, Calif., company, Honest is trying to stabilize its business and get back on a growth path.

Last March, it named a new chief executive, replacing co-founder Brian Lee with Nick Vlahos, a consumer-products veteran from Clorox, and tasking the 49year-old with revamping the business and improving quality control.

Vlahos, in a recent interview, wouldn’t comment on Honest’s sales trends but said the company has been culling some products such as sunscreen and insect repellent to focus on its three core categories of baby, beauty and household products.