By  on July 6, 2007

Klinger Advanced Aesthetics and its product line, Cosmedicine, have split into two companies.

Trueyou.com, the company that owned Klinger and Cosmedicine, has sold the famed spa business, formerly known as Georgette Klinger, to focus on Cosmedicine, a skin care range sold exclusively in Klinger spas and in Sephora stores.

"It's very difficult and it takes a lot of energy and resources to create a skin care line from scratch and to develop a spa business," said Jane Terker, president of Cosmedicine. "We found that we couldn't properly or adequately support both. We want to build the business where we can concentrate our resources," she added, referring to Cosmedicine.

Husband and wife team Joseph and Angela Krivulka bought the 11-spa chain from Trueyou.com in May for an undisclosed sum. Both have backgrounds rooted in the pharmaceutical industry and, in 2004, Joseph Krivulka cofounded Triax Pharmaceuticals, which has a therapeutic focus in dermatology.

The Krivulkas plan to funnel their interest in pharmaceuticals into the Klinger business and transform the units into medical spas that include cosmetic dermatology, skin care, hair care, body treatments and retail. The Klinger Advanced Aesthetics nameplate will be replaced with Georgette Klinger Aesthetics, Spa, Salon and Cosmedical Centres. The new owners also plan to introduce cosmetic dentistry and other services geared toward aesthetic improvement.

Under its previous owner, Klinger and Sephora opened a side-by-side retail concept in NorthPark Center in Dallas, which allowed the two businesses to funnel shoppers back and forth from Klinger's service-driven spa to the product-laden Sephora. Klinger's new owners said that at present the companies have no more side-by-side concepts planned.

Klinger will continue to carry the Cosmedicine line, but plans to redevelop and reformulate its own Georgette Klinger product offering, according to the firm.

After all, products offer a higher margin than spa treatments. In a spa retail environment, the universal markup is generally two times cost, while treatment margins are approximately 30 percent, said industry sources.

Several weeks ago, the Cosmedicine business, which was headquartered in Klinger's Manhattan flagship, located at 501 Madison Avenue, moved to temporary office space at 23rd Street and Park Avenue.The line, which was introduced in February 2006, relies on over-the-counter-grade pharmaceutical ingredients and is rooted, as Terker says, "in science and measurable results." To that end, at the outset the company recruited Johns Hopkins Medicine to consult on the clinical trials and quantitatively measure product benefits.

This summer, Cosmedicine will introduced three new items that build off its star product, Medi-Matte, a lotion designed to reduce oil. They include Medi-Matte Tint, Healthy Cleanse for Oily Skin and Medi-Matte Oil Control Spray.

"We will continue to use a scientific lens in terms of the claims we make," said Terker. "Cosmedicine is true science based on results. That's where the market is going." She added that currently there are many claims in the beauty industry "that border on the absurd."

Before it sold the chain Trueyou.com sought to reposition the spa — known for its facials — as a one-stop shop for beauty and cosmetic enhancement. Executives would not comment on sales, but industry sources estimate that each Klinger unit generates about $5 million annually. The company declined comment on that estimate.

The Cosmedicine range generates an estimated $15 million to $25 million in retail sales, and is expected to grow to about $80 million to $100 million over the next five years as it expands to doctors offices and internationally, according to industry sources.

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