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Hard Candy Crosses Over to Mass

Hard Candy has traveled in many circles: Fred Segal, Sephora, Space NK and Duty Free shops across the world.

Hard Candy’s lipstick items.

Hard Candy has traveled in many circles: Fred Segal, Sephora, Space NK and Duty Free shops across the world. Now, the brand that was founded in 1995 by Dineh Mohajer with a funky pale-blue nail polish, is entering Wal-Mart, re-created for the masses to be sold exclusively at the retail powerhouse.

This story first appeared in the August 14, 2009 issue of WWD.  Subscribe Today.

Once known as the beauty brand that broke all the rules — its fashionable, trendsetting nail polishes had names like Trailer Trash; packaging married cool and girlish charm; print ads, shot by David LaChapelle, were irreverent and fantasylike — Hard Candy has experienced a roller-coaster sales and distribution cycle over the past nine years.

In the mid-Nineties, after landing in 800 stores, branching into color cosmetics from nail polish and generating about $12 million in wholesale sales, Hard Candy was sold to LVMH Moët Hennessy Louis Vuitton in 1999 for under $10 million. But just three years later, thanks to copycats, a tough market and a lack of focus, Hard Candy’s spotlight began to fade and the brand again changed hands, this time to Falic Fashion Group, a subsidiary of Duty Free Americas, of Hollywood, Fla. The purchase price was reportedly under $1 million. Over the past seven years, Hard Candy’s distribution shrank to several hundred select prestige outlets, as well as to Duty Free shops, with estimated retail sales between $7 million and $10 million, according to Falic.

In September, it appeared news was afoot, as products on Hard Candy’s Web site were marked down 75 percent, sparking a flurry of speculation that the business was being shuttered. Today, Hard Candy’s Web site is under construction. At the time, Jerome Falic, chief executive officer of Falic Fashion Group, said its core color assortment had been phased out and new strategies were being explored.

Apparently last year mass retailers came knocking, he said earlier this week, believing the brand would fill a gap on the cosmetics wall. So Falic began contacting manufacturers he thought would be interested in taking on a major revamp of the brand for mass distribution — yet maintain its prestige image. NuWorld Beauty, a beauty contract manufacturer based in Carteret, N.J., was ultimately tapped to make the brand, which is slated to hit 3,000 Wal-Mart stores by the end of the year. Stu Dolleck, president of NuWorld, said he thought Hard Candy had the magic and lure it did from more than a decade ago, and the legs to become a major brand again. A partnership was formed.

“The overall approach was to take this prestige brand, which is fun, avant-garde and edgy, and create it in the same way as if we were going into any prestige outlet. It still has the same graphics, brand presentation, componentry and formulas as if it were going to an elite store,” said Dolleck.

The new line consists of 261 items ranging from shimmer lip glosses (Plexi Gloss, Lip Tattoo), baked eye shadow duos (Kal-eye-descope), glitter liquid eyeliner (Walk the Line), volume mascara (Ginormous Lash) and eyeliner pencils that double as hair sticks (Take Me Out Eyeliner). Prices average $7. Several iconic Hard Candy items will return, such as the Fortune Telling Lipgloss and the Eye Candy sliding compact with glitter eye shadow and coordinating glitter eyeliner, according to Lauren Kahn, Hard Candy’s senior brand manager, adding that the brand has exited its current retail partners and that sephora.com is clearing out its existing Hard Candy inventory.

Carmen Bauza, vice president of Beauty for Wal-Mart, said it seemed as if she had given birth to the new line, seeing that she and Wal-Mart’s entire beauty team had created and executed its entire development.

“The customer will feel like she is in a candy store,” said Bauza of the new items, which “fills a gap in the marketplace, mainly with 18- to 35-, 40-year-old women, as well as the young at heart. They’re very familiar with the brand. I know Hard Candy very well and felt it was the right choice based on our knowledge of the customer.”

Wal-Mart, she continued, will “lean on the equity of the brand and leverage the recognition that the brand currently has and its existing cachet” which continues to live with consumers. Overall, she views Hard Candy as a “destination brand” that will build on Wal-Mart’s existing prestige beauty business, such as fragrance, where it offers many of the same brands sold in department stores.

“Retailers don’t just need another brand,” said Dolleck. “They’re eliminating duplicative brands and inventories. Hard Candy will look nothing like the brands around it.”

Industry sources expect Hard Candy to be merchandised in four to eight foot sets, as they speculate Hard Candy is taking over space left vacant by Max Factor, which is exiting the U.S. marketplace by the end of this year. The items could generate as much as $50 million in sales the first year, sources said.