By  on May 8, 2009

Since the preservation of youth is one of the holy grails of the beauty industry, it seems fitting some of the most promising players in the business today are under the age of 40. Although they've created some of the most compelling new brands in beauty, even these wordly wunderkinds couldn't have predicted the global economic crisis or the seismic shift in consumer behavior it provoked. To discover how the young ones are confronting these challenges, we asked five international industry  whiz kids about their approach to growing business in a contracting market.


IDO LEFFLER, 33,
YES TO CARROTS
Perhaps the only executive who would take being called a “yes man” as a compliment, the San Francisco-based Leffl er has based his budding beauty empire on positivism and paraben-free personal care products. The executive, who has a penchant for wearing Day-Glo orange clothing and goes by the offi cial title of “Carrot Lover,” runs Yes To Inc., which now comprises carrot-, tomato- and cucumber-based skin, body and hair care lines. Leffler, who recently became a father, is also working on a baby-care line. Today the brand is sold in approximately 25,000 doors in 29 countries; industry sources estimate its sales in the $50 million range.

MARIA HATZISTEFANIS, 38,
RODIAL
Inspired by her Greek grandmother’s rustic beauty recipes, Hatzistefanis launched Rodial in 1999 with the mission to garner skin-boosting results while nixing the need for needles filled with Botox, collagen and skin fillers. The high-end treatment brand, which taps the antioxidant power of pomegranate, offers an often cheeky take on serious skin care, with product monikers such as Bum Lift and Boob Job. Today, the brand is sold in approximately 350 doors in 20 countries; industry sources estimate its sales in the $7 million range at current exchange.

MAUREEN KELLY, 36,
TARTE
With her Irish roots, Kelly is well-placed to promote the idea green can be glamorous. Dubbing her makeup brand’s positioning as “health couture,” Kelly launched the naturals-packed Tarte in 2000 after being underwhelmed by traditional brands, which she found staid and unhealthy. The line is now sold through retailers including Sephora and QVC. By the end of the year, Tarte will be in about 500 doors in the U.S., Canada and Australia; industry sources estimate its sales in the $24 million range.

ETIENNE DE SWARDT, 38,

ETAT LIBRE D’ORANGE
De Swardt burst onto the beauty scene in 2000 as part of the team behind Oh My Dog! — the now defunct perfume for pooches. His predilection for subversive scents, however, hasn’t evaporated and he launched fragrance brand Etat Libre d’Orange in 2006. Some of his more evocative concoctions include Sécrétions Magnifiques (or Magnificent Secretions, in English) and Putain des Palaces (Whore of the Palaces). Etat Libre d’Orange’s flagship store is located in Paris’ vibrant Marais neighborhood. Today the brand is sold in approximately 90 doors in the U.S., U.K. and France; industry sources estimate its sales at $1.4 million at current exchange.

RAMDANE TOUHAMI, 34,

CIRE TRUDON
Touhami’s age belies lengthy experience in the fashion and beauty industries. He founded L’Epicerie, a concept store, and Parfumerie Générale, a beauty boutique, in Paris, where both have since shuttered. Touhami is now artistic director and buyer for men’s wear at Liberty department store in London, as well as creative director for apparel brands Resistance R.T. and Antidollar. In 2006, he took on the creative direction and running of Cire Trudon, a French candle manufacturer, which has been operating since 1643. Today, the brand is sold in about 180 doors in eight countries; industry sources estimate its sales at $7.8 million at current exchange.


NEXT: The Industry Whiz Kids Answer Beauty Biz’s Pressing Questions >>


Q1: HOW HAS YOUR BUSINESS BEEN IMPACTED BY THE GLOBAL RECESSION AND WHAT HAVE YOU DONE TO ADAPT TO THE CURRENT CLIMATE?


IDO LEFFLER
It’s a combination of challenges and opportunity. As a young, emerging brand we have an amazing opportunity to grow in a market where people are looking for value. They’re looking for newness and for exciting things while maintaining a budget. We’ve made some minor adjustments and we’re making sure we’re not overzealous. We also take a little more time to make certain decisions, which we might have taken more quickly in the past. We’re looking at marketing plans and the things we’re spending incremental money on and asking, ‘What delivers a direct return to the brand?’ ‘Can we use that money in a way that makes the experience better?’ People, including myself, are asking themselves more and more, ‘Do we need to live beyond our means on excess credit or can we live without having to spend the world?’ More people are now looking for things that give them more than just a product. They want a brand experience and a personal experience. I call it ‘the love experience.’ When you love something you stay with it for life. We’re thinking about what we can do to make our value and offer better. Rather than taking away, we’re asking how we can give more. Now is a time when people are looking for things to fall in love with.

MARIA HATZISTEFANIS
We’re growing at a 50 percent rate over last year, which is amazing. That’s because we launched new accounts and new products. If you have a well-developed philosophy and your product has a unique positioning, you’re going to do well. Our products are very specific and they solve specific problems, which is what customers want. They want something that makes them feel better. Rodial started very small and still doesn’t have external investors. We’ve grown organically and we’ve always been careful with our fixed costs. We only spend what we need, which has really helped us, as we haven’t had to make huge cutbacks. If you’ve always been careful with fixed costs and expenses it becomes second nature. A company that’s backed by private equity and is used to having huge expenses might not be used to that. We froze recruiting in non-sales positions, as our sales team has to grow in line with new accounts. We’re not hiring for other office positions — we try to get everyone to take on more work. We’re subcontracting where we can. For instance, we’re launching a new Web site and there was a question over whether we would hire someone in-house for the design and maintenance. We decided it was better to outsource, since if things get rough it’s easier to end a contract than to make someone redundant.

MAUREEN KELLY

We haven’t yet been impacted, but we’re bracing for a blow. It’s more about anticipating what could come around the corner and bracing for impact. Overall, we’ve been making our budgets. The climate is similar to what it is for big businesses, but since we’re smaller we’re more nimble and can react more quickly. Big machinery can go slowly. We can implement changes that can affect our business in a positive way quickly. We haven’t seen a tremendous softening as green beauty has not seen a big impact. When dollars are tight you want to feel good about the money you’re spending, if you have any. Our packaging uses post-consumer recycled [materials] and we use soy ink, which the consumer appreciates. We did it because we care, but it was a gamble that we hoped would pay. In this economy, it’s paying off. We’re calling out value more. We didn’t speak about value in the past, as we’re a prestige brand, but customers want to feel like they’re getting value, even if they can afford to spend. It’s not about discounting, but there are ways around that by being creative. We did a campaign — Be Good To Your Mother Earth — where we sold a bag of products worth $62 for $35. Customers know it’s a great deal, but you don’t get that bargain-basement discount feel.

ETIENNE DE SWARDT

We do feel the situation. Niche and independent perfumeries are not as affected as the department stores. There’s more pressure on us from suppliers as some cannot extend credit because they are suffering from tight cash flow and treasury. It’s also difficult to be paid in advance by small perfumeries. So funding stock is more and more difficult. It’s an opportunity for us, as the crisis will reshape the landscape. It’s a revolutionary period during which we can set ourselves up for tomorrow. As niche brands, we can react more promptly and we can shape the future. We are six people, not 600 to transform, so we can take advantage of potential new opportunities.

RAMDANE TOUHAMI
For us it’s still good. We are still growing at plus-30 percent for the first three months of the year. In beauty we have not yet been impacted. We also do candles for churches and, strangely, that’s been impacted. So, we are selling our church candle business, which represents 20 percent of our turnover. It’s impossible to tell what’s going to happen next month. It’s harder for big brands. We are so original. We still have products that sell well in stores and we’re still exciting. Since people are staying at home more, they’re buying candles for their homes. We have to work 10 times harder. We are more present in stores, we visit our clients more and do a lot of training. We’re also launching a new cheaper line and offering smaller sizes. I wasn’t planning to do smaller sizes for Cire Trudon but we will for Christmas. For people who can’t afford a 50 euro [$66] gift, we needed one for 30 euros [$40]. We’re also doing candles for hotels. Crisis or no crisis we were going to act the same.


NEXT: How Do You Manage Effectively Through Crisis? >>

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