NEW YORK — Wella AG is trying to inject a little color.
This story first appeared in the May 31, 2002 issue of WWD. Subscribe Today.
The German beauty company, which has amassed a $1.5 billion fragrance business in the past decade, is reportedly seeking to enter the color cosmetics and treatment arena in a major way by discussing a possible joint venture with the owners of the hip young cosmetics brand, Tony & Tina Vibrational Remedies.
At least these are the reports that are swirling around the market. There was no comment from executives at the German hair care company in Darmstadt or at its beauty subsidiary, Cosmopolitan Cosmetics, and its U.S. branch, Intercosmetics Inc. But sketchy details have been seeping into the market.
If the deal could be made, it would allow Wella and its Cosmopolitan Cosmetics subsidiary to enter into a club now occupied by Estee Lauder, LVMH Moet Hennessy Louis Vuitton, L’Oreal and Shiseido. All of these companies have spent the last few years acquiring trendy young indie lines and makeup artist brands. This has ranged from MAC, Bobbi Brown Essentials and Stila at Lauder to Blissworld, BeneFit, Hard Candy and Urban Decay for LVMH to Kiehl’s and Shu Uemura for L’Oreal and Francois Nars and Zirh at Shiseido.
What is different about the Wella proposition, according to reports, is that the creators of Tony & Tina — Anthony Gill and Cristina Bornstein — would also head up an effort to develop cosmetics lines for many of Cosmopolitan’s fragrance brands, beginning with the recently purchased Escada Beaute.
According to reports, Wella’s Cosmopolitan and its Intercosmetics U.S. wing have acquired a 72 percent stake in Tony & Tina. The remaining equity would be held by the three founders — Gill, Bornstein and Andrew Auwerda, president. The Tony & Tina brand would be housed in a newly formed company, reportedly called Noon in China, that would form the joint venture between the indie partners and Wella’s beauty subsidiaries.
According to reports by industry sources, the trio would report to Werner Hofmann, senior vice president of Cosmopolitan. He would serve as chairman of the joint venture, with Auwerda remaining as president and chief operating officer and Gill and Bornstein continuing as co-creative presidents of Tony & Tina and vice presidents of creative and marketing for the joint venture.
In order to acquire such a large stake in Tony & Tina, Wella would have to buy out the holdings of a number of investors. The largest piece, or 45 percent, is held by a group called Palisades Private Partnerships. The remaining pieces are held by individuals. Financial details were not disclosed, but sources estimate the valuation of Tony & Tina is $11 million.
The Tony & Tina brand had a wholesale volume of $6.5 million last year and is expected to do $8.5 million this year, with a distribution consisting of about 200 department store doors in the U.S. and 400 internationally. The largest accounts include Nordstrom, Sephora, Bloomingdale’s, Marshall Field’s, Parisian and the U.S. branches of the German perfumery chain Douglas.
It is not clear which brands the new color team would tackle after Escada. But Cosmopolitan has a host of fragrance brands, including Ellen Tracy, Montblanc, Dunhill and Ghost. Among its other fragrance brands, the Anna Sui color license is held by the Japanese company Albion, Rochas has its own development team and all creative developments for the Gucci brand are done in partnerships with the licensor.
According to reports, Wella’s intention is to develop a color and skin care business that would one day rival the fragrance volume, which is estimated as ranking sixth in the world.
Bornstein and Gill entered the business as a pair of professional artists in 1997 who launched Tony & Tina with the concept of color as a therapeutic healing force. The couple recently published a how-to book called, “Color Energy: How Color Can Transform Your Life.”””