By  on October 2, 2009

As a student at Harvard Business School, Marla Malcolm Beck used to drive 30 minutes to Chestnut Hill, Mass., to buy Nars Cosmetics lipstick at Barneys New York. Several years later, while working for a private equity firm in Washington, D.C., she eschewed buying makeup in department stores, favoring instead small boutiques, like the one she went to in Georgetown for spa services that stocked hard-to-find indie brands. One decade ago this fall, Beck, then 29, bought the shop and started what she envisioned as a national beauty apothecary and spa, called Bluemercury. Here, Beck, the company’s founder and chief executive officer, reflects to WWD on Bluemercury reaching its 10-year milestone, and how it circumvented the Sephora Effect and two recessions along the way.

WWD: When you opened 10 years ago, what were some of the first beauty brands that Bluemercury carried?

Marla Malcolm Beck: All of the innovation in the industry was coming from indie brands — Bobbi Brown, Trish McEvoy, Laura Mercier, Remède, Fresh, Kiehl’s and Philosophy. Nars Cosmetics was our first makeup artist line. At the time, none of the indie brands produced enough stock. We used to have to beg Nars Cosmetics for more Dolce Vida, our best-selling lipstick. But because of the scarcity, the clients wanted it more. Now, most of these brands have been bought by big corporations.

WWD: At the time of your first store opening, as you mentioned, the industry was awash with indie brands. Now they seem to be scarce. How do you fill the vacuum?

M.M.B.: I wouldn’t say they are scarce. There are a lot out there. What’s changed is, it’s difficult for a new indie brand to compete at the same technology level. The big corporations bought all the [former] indie brands and put their research labs to work on them. In a lot of cases, that’s been beneficial. You see Nars with its foundation launches this fall — the formulas are off the charts. If you are an indie makeup brand you don’t have access to Shiseido’s labs. The product development coming out of the brands was amazing….Now, where design rules, indie brands are doing a great job. In color cosmetics they can only compete in terms of packaging design.

WWD: As the business has grown to some 26 locations, has your criteria for selecting products changed?

M.M.B.: We are still doing what we’ve always done. It has to be a great formulation with great packaging and it has to be an authentic brand, which usually means the creator is driving it. We went through category gap analysis to find out what were we missing. It was the nail category, so we’re about to add a brand I’ve always loved, Deborah Lippmann. Here you have a category gap filled by an expert. It’s a great example where indie brands can stand. They have to fill a gap in the market. And I have to love it.

WWD: Over the last decade, how have shoppers’ beauty priorities changed?

M.M.B.: Spa services have become more essential. We used to have to explain to our clients what a glycolic peel was. Brazilian bikini waxes also are something that people are more comfortable with. I attribute that to “Sex and the City” culture. All of the sudden people understood what a Brazilian bikini wax was, they saw it as acceptable and started asking for it. We excel in high-advice categories, where people need help learning how to use or apply the product. The client is way more sophisticated today than she was 10 years ago, in terms of knowing what ingredients work.

WWD: What were the driving beauty trends when you first opened, and what have they since been replaced by?

M.M.B.: Kiehl’s was so hot we couldn’t keep it in stock. I had to beg to get my holiday shipment. Bumble and bumble broke the mold with Surf Spray. T. LeClerc’s yellow powder was huge, even though yellow powders had been around for years. Now, the mineral powders have taken over that category. Nars’ blush in Orgasm pink was a top seller then and still is. Foundation has come so far. Back then it was just coverage, and now its treatment with color. The bronzer category also is so much bigger than it used to be. We showed 40 percent growth in foundations and bronzers this year.

WWD: Did you attend fashion week this fall? If so, what looks were you most struck by?

M.M.B.: Absolutely. I’m interested in the idea of fast fashion for cosmetics, or limited edition items that put the fashion into cosmetics. Laura Mercier did a patterned palette for spring. We’ve been trolling for more fashion-based items for spring. Backstage, Bobbi Brown had a nice, new lip formula with an SPF [Lip Treatment Shine SPF 15, due out in May]. From a technology standpoint, lip continues to be interesting. Did I see any makeup trends that bowled me over? No. I’m personally looking for new innovation in hair care.

WWD: You opened several years after Sephora’s U.S. entry. How has your competition changed over the years?

M.M.B.: The same year we opened our first store, Sephora opened two doors down a month later. A lot of our brands migrated to Sephora: Bliss, Nars, Fresh. These were and still are core brands for us. We had to figure out what was different about the Bluemercury experience, which was our concept of friendliness, expertise and sampling. For us, samples are not a reward for a purchase. You walk away with them and try the product first. The client always comes back to us. People said, “Oh, Sephora is going to kill you.” And they didn’t. [A decade ago] the department stores were there, and Bluemercury came along and said, “We are going to be the high advice, neighborhood store.” All of these new distribution channels are a sign of an industry in disruption and maybe a more mature industry, in that it’s becoming hyper-segmented.

WWD: This past year, Bluemercury shifted its growth rate to 10 new doors from 30 per year. Does this mean your priorities have changed?

M.M.B.: We saw the recession at the end of 2007. We recognized it early because we had been through one before. We backed off our growth because we didn’t know what was going to happen and the rents were outrageous. We are opening stores in certain markets, but we are still watching for rents to come down.

WWD: How would you describe your management style?

M.M.B.: I’m extremely strategic and big picture. But, I can get into the details with our staff. When you are building a successful, high-service retail model with great merchandise, it really is about the details. You have to know what makes your brand distinctive, and some of what makes it distinctive is the operating model. It’s the detail that drives who we are.

WWD: Do you have down time? If so, how do you most like to spend it?

M.M.B.: I’ve had to get better at taking down time. I have three little kids, ages 6, 4 and 2 years old. Now I say, “Today I am just going to focus on the kids,” which actually enhances my creativity. At work, I’ve had to segment days when I’m looking at products and how to merchandise and operational days. Balancing that is one of the challenges of being the ceo and the chief merchant.

WWD: If we took a peek inside your makeup bag and travel kit, what would we find? What treatments can’t you live without out?

M.M.B.: Too much stuff. My suitcase is usually half product. If I’m on the train, I probably travel with over 100 beauty products. I don’t like to check my bag when flying, so I’ve gotten really good at shoving as many products as I can into those plastic bags: a 1.7-oz fragrance, two foundations, a moisturizer and a serum.

WWD: Given you now have new neighbors at 1600 Pennsylvania Avenue, do you have any new high-profile customers to divulge?

M.M.B.: Yes, we have senior people working within the administration and relatives [of the first family] using our spa. We’ve always had a high-profile clientele, including the first daughters of the Bushes, and Chelsea Clinton used to shop with us. We are nonpartisan.

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