How does a woman with the vision to create pure skin-care
products go up against the multimillion-dollar companies dominating
the cosmetics industry? Very carefully.
Barbara Close, 40, the founder and CEO of Naturopathica Holistic
Health Ltd., had been a massage therapist for years when she opened
a holistic skin care spa in the Hamptons, New York, in 1995. The
spa's initial product, an "herbal remedy chest,"
contained a selection of natural remedies.
Within a year, Close decided to launch a natural skin-care line
"created by an herbalist and aromatherapist, as opposed to
most lines that are created by celebrities or marketing departments
of big cosmetics companies," she says. She found a chemist to
produce her expanded product line in 1996.
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The spa's location in the Hamptons attracted a high-profile
clientele. When Martha Stewart fell in love with Naturopathica
products and wrote about them, exclusive New York City department
store Henri Bendels offered to carry the line.
For the dozens of alternative
beauty companies launched each year, the road isn't
easy.
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What was starting to look like a fairy-tale success story
quickly gave way to reality as Close struggled to keep up with
demand. "I did not have a controller, so the company did not
have proper [financial] controls or reporting," recounts
Close. When she finally got a controller, it took a lot of work to
decipher previous years' books and set up a proper accounting
system. But by 2001, the company had rebounded, and Close projects
sales of $2 million this year through spas and selling online.
For the dozens of alternative beauty companies launched each
year, the road isn't easy. Angela Kapp, a New York City
multichannel retail and CRM consultant, says tremendous
consolidation in the industry means that "you need to be
affiliated with one of the big guys-L'Oreal, Estee Lauder or
LVMH"-to grow beyond a certain point.
Both Close and Gabrielle Machionda, the founder and president of
Westbrook, Maine's Mad Gab's, can attest to the high costs
of getting products made and distributed. Still, partnering with or
being funded or bought by a larger company isn't in their plans
for now. "I like the flexibility and the independence I
have," says Close.
Machionda, 30, hand-mixed a lip balm for fun in college in 1991
and peddled it on the side for years, but it wasn't until she
joined an informal incubator in 1995 and sought advice from
seasoned businesspeople that she formally started her business. She
got her first publicity (and sales) boost in 1997, when shopping
channel QVC visited Maine seeking 20 businesses to promote on-air.
"That five-minute segment sold more [product] than we had in
our 1996 fiscal year," says Machionda. "QVC had me return
three times." The profits enabled her to hire an employee and
add a new product line, Elephant Lube body balm, in 1998. The
publicity got Mad Gab's featured in magazines such as Vogue and
Seventeen.
Today, Machionda is following Kapp's advice and creating a
"multichannel brand." Mad Gab's products are sold in
retailers as diverse as Anthropologie, Eastern Mountain Sports and
Whole Foods Markets; online; and in spas. Machionda is also
exploring college bookstores as a sales venue. Still, with revenues
under $1 million last year, Machionda says she lacks funds to
invest in promotional materials, formally launch her line or attend
trade shows.
One thing both companies have in their favor: They're
breaking the rules-something Kapp says up-and-coming beauty
companies must do, whether by presenting an alternative viewpoint
or using an unusual distribution channel. For Close, the ultimate
success strategy is trusting your vision. "If you have a
high-quality product that you believe in and convey that message,
people will buy your product because it's not just marketing
and hype."
Aliza Pilar Sherman is an Internet pioneer, netpreneur,
speaker and author of the book Power Tools for Women in
Business: 10 Ways to Succeed in Life and Work (Entrepreneur
Press).
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