The Vanity Premium

Where the Mirror Meets the Margin

May 30, 2025

Basket Thesis:

Vanity isn’t shallow, it’s a signal. It’s the willingness to pay for status, confidence, health, and presentation.

This 8-stock, long-only basket is constructed to capture that signal where it meets margin. From beauty services and supplements to aesthetic medical devices and digital consumer curation, these companies don't just monetize identity, they engineer it.

Each one benefits from consumers’ willingness to pay up when the product is tied to how they look, feel, or are perceived. The core shared traits: brand-led pricing power, scalable go-to-market, and secular tailwinds driven by aging demographics, premiumization, and lifestyle upgrade.

Each position is held at 0.625% of the model portfolio (5% total).

Here’s the high-conviction breakdown:

EWCZ – European Wax Center

EWCZ owns a simple, but incredibly sticky, category: out-of-home waxing. The model is franchise-first, capital-light, and built on habit-based customer behavior. Hair grows back; customers return. The brand sits on a moat of trust and consistency in a category where intimacy and hygiene matter. That intimacy drives loyalty, its “Wax Pass” program pre-sells future visits, reinforcing repeat behavior.

The company’s moat is distribution and branding. With over 1,060 locations, EWCZ is ~6x the size of its nearest waxing competitor. Independents can’t match national ad budgets, CRM infrastructure, or its proprietary wax formulations. Despite 2025 being a “reset” year with net closures (to prune underperforming franchises), the roadmap is intact: return to unit growth by 2026. Management is deploying data-driven marketing tools to support franchisee traffic recovery, while loyalty infrastructure (EWC Rewards) deepens repeat usage.

Margins are elite for a services business: ~35% EBITDA, driven by royalty streams and product sales to franchisees. Gross margins exceed 70%. Yet valuation is undemanding at ~14x forward EBIT. Investors are underpricing what happens when same-store sales stabilize and net openings resume. We initiate a long here, not for FY2025 comps, but for the 2026–2028 franchise growth rerate.

2157 JT – Koshikada Holdings

Koshikada is a demographic moat business masquerading as a gym chain. Its crown jewel is Curves Japan, a national franchise of women-only circuit training studios. The target market is post-menopausal women, aging, affluent, and underserved. The Curves model isn’t about fitness, it’s about habit, mobility, and socialization. And it works.

With over 2,000 locations and ~700 active members per studio, Curves monetizes a sticky behavioral loop: daily, low-impact exercise in a safe, all-female environment. Members don’t churn like typical gyms, because they build identity and community into their visits. It’s not Planet Fitness; it’s a routine.

Koshikada’s moat is demographic fit and psychological stickiness. Women 50+ are the most loyal cohort in Japanese consumer services. Curves is specifically tailored: 30-minute sessions, no mirrors, no weight racks, no intimidation. Most members have been attending for years. Many go five days a week.

Margins are resilient (~20% operating margin), with revenue mix across franchise fees, in-center product sales (e.g. supplements), and coaching upsells. FY2024 saw a return to membership growth after pandemic churn, and management has guided for stable 2025 recovery. The company is experimenting with eldercare integrations and light digital delivery.

Valuation is attractive at ~9x EV/EBIT with a ~2% dividend yield. This is not a growth rocket, it’s a bond proxy with optionality on aging society monetization. Think of it as a REIT-like play on female habit persistence.

JWEL CN – Jamieson Wellness

Jamieson plays in supplements, but this isn’t a commoditized pill pusher, it’s a brand-first global CPG story, monetizing wellness as vanity. Their 100-year-old brand commands top-shelf pricing in Canada and increasingly China. The thesis: wellness, immunity, aging gracefully, and even GLP-1 supplementation all converge into a global premium vitamin trade.

FY2024 branded sales grew 14%, with China revenue up nearly 80%. Gross margin expanded ~350 bps to 38%. The company guided to 17%+ YoY revenue growth. The Youtheory acquisition adds U.S. collagen exposure, a category with high recurring use. With in-house manufacturing and vertically integrated supply chains, Jamieson controls quality and margin.

Its moat is trust: 400+ quality checks per batch, B2B and private label contracts that fill capacity, and global expansion through JV distribution. Valuation? ~15x forward EBIT, ~19x forward P/E. It’s the kind of stock that can grow 10–12% organically and rerate if global investors start viewing it as a GARP staple, not just a sleepy Canadian name.

VITL – Vital Farms

Eggs aren’t sexy. But pasture-raised, ethical, traceable, small-farm eggs? That’s a $6.99/dozen lifestyle signal. VITL turned eggs into a narrative about values. It sells a story consumers eat, about animal welfare, small farms, and nutritional superiority. And consumers pay up for it. At scale.

VITL has 450+ farm partners and distributes to 26,000+ retail locations. FY2024 revenue was +28.5% YoY with ~13% EBITDA margin. The company has 20 consecutive quarters of revenue growth, even through egg price normalization post-2022.

Its moat is both upstream and downstream:
Upstream: exclusive farmer contracts, proprietary supply chain, and real traceability. Downstream: category leadership and branding on shelf—pasture-raised = Vital.

Despite consumer cutbacks, demand holds due to the “ethical splurge” dynamic. VITL is expanding into butter, egg bites, and prepared food. It’s Horizon Organic with better margin upside.

ESTA – Establishment Labs

ESTA is building the premium layer in breast aesthetics. Its Motiva implants (nano-smooth, silicone-filled) offer safety upgrades over incumbents and are pending FDA PMA approval for U.S. entry. Outside the U.S., Motiva is gaining share in LATAM, Europe, and APAC. Why it matters: breast implants aren’t just medical, they’re identity. And identity purchases command pricing power.

Motiva’s moat is regulatory and product-based. It’s one of the only next-gen implants with both global commercial traction and PMA-in-process in the U.S.

The company also builds out the ecosystem: proprietary surgical tools, a software suite for surgeons, and 3D planning.

LATAM FX dragged recent results, but core growth remains strong. Valuation has compressed (~5x sales), yet the U.S. entry represents an inflection. U.S. surgeons are underserved and ESTA’s marketing position, technology, safety, and outcome-focused, is uniquely strong. The stock offers asymmetric upside on a PMA approval, with limited direct competitors in premium implant tech.

AIRS – AirSculpt Technologies

AIRS is a branded liposuction clinic chain. It operates 25+ centers offering its trademarked AirSculpt procedure, minimally invasive fat removal with fast recovery. AIRS isn’t a device company or a services roll-up. It’s trying to be the Drybar of vanity surgery: vertically integrated, standardized, and scalable.

Gross margin exceeds 60%, but EBITDA margin lags (~10%) due to customer acquisition spend. The clinic payback model is improving: breakeven now <12 months. CEO shift in 2024 focused on rationalizing spend, slowing new openings, and emphasizing training + patient financing.

Moat is operational leverage and branding. Unlike franchise competitors, AIRS controls the full funnel. With recent additions like Affirm financing, revenue per patient is rising. If AIRS can get to 15–20% EBITDA margin on $200M+ revenue, it’s a sub-$1B cap compounder. It’s a bet on branding + vanity’s repeatability in a cash-pay category.

SMPL – Simply Good Foods

SMPL is the margin leader in protein snacking, best known for its Atkins and Quest brands. The company has built a portfolio at the intersection of functional health and indulgence. Consumers buy it not just for macros, but for what it says about their discipline, body image, and goals. That’s the vanity premium in action.

Quest dominates the high-protein bar and chip category, with strong share across retail and e-commerce. Atkins is the legacy low-carb brand reborn as a weight management platform. SMPL monetizes consumer aspiration through portion-controlled, body-conscious snacks that travel well and cost <$3 per unit, perfect for repeat, guilt-free use.

The moat is operational leverage + brand + DSD placement. EBITDA margin is ~22%, and FCF conversion >90%. Distribution spans mass, convenience, and digital. Quest and Atkins combined hold top-2 share in high-protein snacks and bars in the U.S., with Quest outpacing category growth.

FY2025 guidance implies mid-single digit growth and margin stability. SMPL’s low capex, asset-light model yields consistent returns on capital. The company remains M&A-ready with a clean balance sheet and no dividend drain.

Valuation sits around 14x forward EPS, fair for a mid-single digit grower with high return on capital and room for tuck-in acquisitions. SMPL is a high-quality GARP name at the heart of consumer self-optimization culture.

INMD – InMode

If you’ve seen Morpheus8 trending, that’s InMode. It sells RF-based aesthetic medical devices, skin tightening, body contouring, facial rejuvenation, used by dermatologists and med spas. It’s an asset-light, high-margin device+consumables model. FY2024 net margin: ~45%. Gross margin: >80%.

Moat: proprietary tech, FDA-cleared procedures, and global distribution. Recurring revenue comes from consumables and accessories post-device sale. Clinics love it because it monetizes vanity with low patient risk and high ASP. It’s the “in-between” solution, less invasive than surgery, better results than creams.

The market is pricing it like a fading story (~8x forward EPS, net cash ~$500M). But new product cycles (EmpowerRF, EvolveX), plus international expansion and med spa boom, offer multi-year tailwinds. InMode is the cash-printing version of the aesthetic trade, hiding in plain sight. Mispriced.

Conclusion

What links these names is not just exposure to vanity, it’s the economics of vanity. In each case, customers are buying identity, confidence, or aesthetic control, and they’re willing to pay a premium for it. That premium creates outsized gross margins, brand moats, and pricing power. Most are asset-light, cash-generative, and underfollowed. Together, they form a diversified exposure to one of the most recession-resilient forms of discretionary spend.

This is the Vanity Premium. And it's margin you can compound.

Disclaimer:
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