Skin in the Game
Former Estï¿½e Lauder executive Bob Nielsen came out of retirement to advise on and invest in a cosmetics line for new moms that makes the Boob Tube.
It was the Boob Tube, an ointment that pregnant women can use to prevent stretch marks and provide relief for itchy breasts, that really caught Bob Nielsen's attention. On a spring night in Miami Beach, the former group president of Est�e Lauder was surrounded by women-his wife and four women who had co-founded Mama Mio, a London-based startup skin-care company for new mothers. They were having dinner at the Sea View Hotel's Terrace Room.
The Mama Mio ladies-two Americans and two Brits-pulled out an assortment of jars and bottles with names like Tummy Rub Stretch Mark Butter and Shrink to Fit Cream and urged the couple to examine the textures of the creams and inhale their scents. By the time they pulled out the Boob Tube, Nielsen was hooked.
"Only a mother and a woman-and probably a quirky Brit-could get away with calling a product Boob Tube," laughs the 78-year-old Nielsen.
Within a matter of weeks, Nielsen decided to invest an amount he puts in the "low seven figures" into Mama Mio. And a few weeks after that, he came out of six years of retirement to become chairman of the company, with a focus on extending Mama Mio's U.K. successes into the U.S. market. For its part, Mama Mio gained Nielsen's sage advice, his connections, and more.
"To have someone like him validate us with his interest and put his own hand in his own pocket-well, it was the best validation we could have had," says co-founder Sian Sutherland.
Helping to sell products for chapped nipples is only the latest twist in Nielsen's unlikely career in cosmetics that began in 1955. After completing a four-year stint in the U.S. Navy, the Long Island, New York, native heard that cosmetics and fragrance firm Coty was trying to distribute its makeup in drugstores in northern New Jersey. Recalling his teenage years as a soda jerk, he felt he knew a thing or two about the drugstore business and figured he could do the job. "I jumped at the opportunity because it paid $100 per week," he says.
Five years later, Nielsen joined Est�e Lauder as a salesman and worked his way up the ladder. After leaving the company twice and later returning each time, he became president of several of the company's major brands. During his 23 years at the cosmetics giant, he helped steer brands like Clinique, Prescriptives, Aramis, Tommy Hilfiger, and La Mer to big sales numbers and international prominence.
Although Nielsen officially retired in 2001, he continued to dabble in the beauty industry, occasionally meeting with friends to hear about possible investments. He looked at a couple dozen up-and-coming product lines, but nothing captured his fancy until Mama Mio came along last year. "I've worked with 50 or 60 brands in my lifetime, and very rarely do you find a brand that has the four key elements to achieve great success," he says, ticking off the list: good positioning, effective products, reasonable pricing, and strong and focused management.
According to Nielsen, neither Clinique, Prescriptives, nor even the flagship Est�e Lauder line ever had all those elements line up at the outset. But Mama Mio does. "It's mothers for mothers. Even the name Mama Mio spells out its position exactly," he says.
Three of the founding mothers of Mama Mio-Sian Sutherland, Tanya Mackay, and Kathy Miller-are longtime friends, now in their forties, who came up with the idea for the company three years ago as they experienced their own changes in skin tone and elasticity through their pregnancies and childbirths. "There were very few products out there for mothers," says Sutherland. "From the minute you find you're pregnant all the way to getting your body back afterwards-every mother has these concerns."
Sutherland had been a serial entrepreneur; Mackay has an advertising background; and Miller was a graphic designer. They recruited Jill Dunk, an American who lives in Los Angeles and has a sales background, as the fourth founding partner. Between the four of them, they had more than 40 years of experience in the beauty industry. With an investment of $1.2 million from South African bank Investec, plus cash from their own pockets, they launched the company in the fall of 2005.
Mama Mio's products were soon found in exclusive department stores like Harrods and Harvey Nichols in Britain; Fred Segal in the U.S., and other boutiques around the world. The company also created a spa-service program in Ritz-Carlton hotels and Canyon Ranch retreats.
Under the watchful eye of Nielsen (whom the founders call their Big Daddy), the company is now ready to make a big push in the larger, more lucrative U.S. market. Nielsen doesn't play a day-to-day role in management, but he does consult with the co-founders on a regular basis. Last fall, he helped them recruit Phil Theiss, another former Est�e Lauder executive, as a full-time C.O.O. and C.F.O. According to Sutherland, Theiss has helped steer Mama Mio to $3 million in sales this fiscal year, and the company is on track to exceed its forecasts of $7 million for next year and $12 million the year after.
As for 2008, Mama Mio is planning to relaunch its website soon and eventually develop it into a communications channel for pregnant women and new mothers. Next month, the company will begin selling at 50 beauty counters in Canada. And this fall, Sutherland anticipates that it will begin selling at a major department store in the U.S. She won't say which store it is, but Nielsen hints that it may be Macy's.
For his part, Nielsen is as confident now about the company's prospects as he was when he first met with Mama Mio's co-founders.
"This is the mother of all opportunities," he quips.
Visit Portfolio.com for the latest business news and opinion, executive profiles and careers. Portfolio.com© 2007 Condé Nast Inc. All rights reserved.