By  on August 20, 2010

Sam’s Club, the nation’s second-largest club chain — behind Costco — has partnered with a skin care firm to offer dermatological-grade, all-natural formulas in an unprecedented merchandising system for the retailer.

This month, 150 Sam’s Club stores nationwide began selling Sophyto, a two-year-old skin care brand founded by Karen Sinclair Drake, who now lives in Naples, Fla. Up until now, Sophyto, which bears a seal by the U.K.’s Soil Association, (where Sinclair Drake founded the line) had been sold in 200 medi-spas and dermatologist offices globally. But through a mutual friend, Sinclair Drake was introduced to members of Sam’s Club’s buying team, and the line’s destiny took on a new life.

“One of our dreams was to be completely accessible,” said Sinclair Drake.

The move is a bold one for Sam’s Club, which dedicates about 3,000 to 3,500 square feet of its average store square footage of 130,000 to health and beauty products, including shampoo, skin care and over-the-counter medications. In beauty, limited stockkeeping units of Olay, Neutrogena and L’Oréal are featured, at times in bulk and two-packs, and at discounted prices and presented on palettes, i.e., metal shelving.

Sophyto, however, will signal the Club’s move into custom-made fixtures, sure to be a bright spot amongst the bare-bones displays. For the first six months, twice-weekly demos will look to drive purchases of Sophyto, a line that stemmed from Sinclair Drake’s frustration of not being able to find natural products for her skin issues.

“It was the single best thing because it forced me to hit the books, and for five years I researched everything on skin biology and cosmetic ingredients. Then I turned to integrative medicine. I took this concept and applied it to research and development and we spent a further two years searching for an organizational standard that would permit these principals,” Sinclair Drake said.

The line launched in 2008 and first gained approval by celebrity dermatologist Dr. Frank Lipman, who includes designer Donna Karan and actress Gwyneth Paltrow as patients.

Sinclair Drake said the firm, which is based in Naples, Fla., still maintains labs and warehouses in Dorset and West Suffex in the U.K., which ship to Europe and Asia, as well as a warehouse in Asheville, N.C., which ships to the Americas.

Sonya Gafsi, senior director of private brands for Sam’s Club, said the club channel overall is ripe for a spalike skin care player “because people are paying to shop there, so there is a heightened focus to present the best in class assortment of merchandise and delivering superior value….For a long time we have been interested in expanding health and beauty. It is an opportunity area that is underdeveloped in the club channel, but it was important to incorporate a holistic vision of wellness, one we want to develop across the club.”

Sophyto, which is based on phytotherapy, appeared to match Sam’s Club’s goal of sustainability and natural vision, whereas others fell short.

“We spent several years talking to partners, then we were introduced to Karen. Her company was a natural fit,” said Gafsi.

Since then, the two camps have been busy rebranding Sophyto, identifying which products to bring to Sam’s members and hammering down a price point.

Primary research with members revealed certain likes and dislikes, said Gafsi, such as many women didn’t want a regimen that was too rigid.

“It’s hard for women to follow a one-, two-, three-step process, especially with a new brand,” Gafsi said.

Two kits were then created. There’s the Phytotherapy Daily Renewal Kit, which includes a Purifying Silken Cleaner, Omega Daily Moisturizer and Anti-Aging Antioxidant Serum. Gafsi said if the items in the kit were purchased individually, they would cost about $125. Sam’s Club will offer the kit for $29.98. A Phytotherapy Anti-Aging Care Kit also is offered, which includes a pH Optimizing Restorative Toner, Anti-Aging Antioxidant Serum and a Marine Peptide Brightening Treatment. Gafsi said if the items in this kit were purchased individually, the cost would be $90. Sam’s Club is selling the kit for $34.98.

Gafsi said the Club looks to be profitable from a volume perspective rather than from a margin perspective.

“Since it was in its nascent stage of a brand launch, we were able to work together what would be a win-win,” she said. “We stood firm that we would not compromise production quality, so the exact formulas that she uses [for derm offices and medi-spas] are the exact formulas we will sell in Sam’s Club.”

None of the items contain fillers, binders, essential oils or dimethicone, and “contain a natural scent based on their ingredients.

“One of the key issues we have is eliminating everything your skin doesn’t need and anything that has the potential to sensitize the skin,” said Sinclair Drake.

And on how formulas look, Sinclair Drake took the same stand. “The whole experience of using this line is very different than most are used to,” she said. “They are used to having some fragranced, thick consistency and having some color. But Sophyto only has what needs to be in there. So the color of the serum is dark brown and you think, ‘What is this?’ But after a few weeks, it makes a difference, just like when you take toxins out of your diet.”

In regard to Sophyto’s new displays, Gafsi said: “The company invested in permanent fixtures to support the product line for an initial 150 Sam’s Clubs. They will all receive a permanent display fixture and a plan that includes heavy sampling for the first six months with twice-weekly in-store demos, sample cards and a digital presence online….It is a first for skin care to have a display.….It is a big step forward for the organization.”

Whether Sam’s Club shoppers will be interested in a new beauty brand remains to be seen, especially since Sam’s offers national brands in bulk units for very competitive prices. But Gafsi maintains that Sophyto’s core proposition “is so true to what women aged 35 to 55 are looking for. They are shopping for organic foods, they take supplements, they exercise and then they are putting synthetic products on their face.” She added that Sam’s has “not commented to our suppliers on [the launch of Sophyto].”

Partnering with Sophyto follows in the footsteps of its giant chain sister, Wal-Mart, which took niche cosmetics brand Hard Candy under its wing last year, swiping it from the prestige market.

Industry watchers are skeptical the new brand will appeal to Sam’s shoppers, but believe that demos may help persuade them to at least try it.

“Just being an unknown brand is going to be hard,” said one mass market beauty consultant. “It’s great to get a deal on something you use everyday, like Olay. But an unknown brand — I think it’s a stretch. I don’t see them beating down the doors for their natural skin care at Sam’s Club. But the demo idea may help.”

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