S&P moves Olaplex view to negative

S&P said it revised its outlook for Olaplex Inc. to negative from stable and affirmed its ratings, including the BB- issue-level rating on the senior secured term loan. The term loan facility recovery rating remains unchanged at 2, indicating substantial recovery (70%-90%; rounded estimate: 70%) in default.

S&P noted that Olaplex's products have recently received notable bad publicity, including allegations that its products can cause hair loss and damage, which the company disputes.

“While we have not seen a material negative impact on performance related to the allegations, we believe the company's reputation and brand equity could be at risk if these allegations continue, especially given its very narrow business focus and product concentration centered around the bisamino ingredient,” the agency said in a press release.

S&P warned it could lower Olaplex’s ratings sales and profitability weaken significantly or if adjusted leverage is sustained above 5x.

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