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Beauty Inc issue 09/07/2012

During a recent month, Marla Malcolm Beck, chief executive officer of the beauty apothecary Bluemercury, sifted through some 50 new product launches, only to find one cosmetics brand, Grace Choi, a line based on BB creams.

This story first appeared in the September 7, 2012 issue of WWD. Subscribe Today.

“The thing I want most in this world is to be able to get behind a makeup artist brand,” Beck says wistfully. “When we have a new collection from a makeup artist brand and it is done well, it sells out in two weeks.”


That lament is one frequently heard from retailers’ lips: Where have all the up-and-coming color cosmetics brands gone?

At QVC, the story is the same. “I haven’t seen any significant new innovation or new ideas,” says Claudia Lucas, director of beauty merchandising. “I see lots of brands, but the brands I see mimic what’s already out there. We’re in a slump.”

The dearth of new color brands follows the indie boom of the mid-Nineties, when the industry was awash with eager entrepreneurs bent on building million-dollar businesses. Makeup artists, in particular, such as Jeanine Lobell, François Nars, Bobbi Brown, Laura Mercier and many more, plunged into the business in droves, charming retailers looking for newness and, in turn, the large beauty firms who ultimately acquired them.

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But in beauty, industry dynamics can change as fast as a seasonal color palette. What once was the land of opportunity—with emerging channels such as specialty retail and TV shopping eager for differentiated brands—has grown into a powerful and more risk-adverse retail channel with assortments heavily populated by equally powerful brands.

The numbers paint a similar picture: Big brands rule. In prestige makeup, the top 10 brands account for 78 percent of sales, which totaled $2.8 billion in 2011, says Karen Grant, vice president and global industry analyst at The NPD Group. She adds that, of the more than 200 beauty brands on the market, only about 70 generate sales of at least $1 million. Grant reminds that this trend also held true in the Nineties when indies made their entries en masse.

But what has changed are the names within the top 10. For instance, in the late Nineties, MAC Cosmetics, then a newcomer, ranked ninth on the list. Today, it’s number one. Moreover, brands such as Bobbi Brown, Laura Mercier and Nars all rank within the top 10, says Grant.


These types of brands now dominate specialty retail, a concept that once favored and incubated smaller, lesser-known lines. Newer iterations of the specialty store’s open-sell environment—including Macy’s Impulse Beauty, Dillard’s The Edge Beauty and Sephora at J.C. Penney—feature the grown-up brands from the Nineties, including Urban Decay, Bliss, Stila and Benefit Cosmetics.

Now, some of the most innovative new brands are descendants of mega beauty firms such as Tom Ford Beauty, an ultra-high-end collection created by the Estée Lauder Cos.

Bluemercury’s Beck lavishes praise on Tom Ford’s luxury message, distinctive products, high-quality ethos and fashionable packaging. “It’s not niche, but it’s an example of how you nail a launch,” says Beck. “They did everything right.”

In fact, several observers say designers such as Tom Ford—along with Dolce & Gabbana, Burberry, Yves Saint Laurent and soon Marc Jacobs—are replacing makeup artists as the stewards of color innovation with tightly edited collections.

“The whole notion has been tapped out,” says Allure editor in chief Linda Wells of makeup artist lines. “It’s risky and there are a lot of things that hinge on its success.” Wells, however, says newness abounds, albeit in unexpected places. “These products are around. You just have to dig a little bit. They are in places where you’d least expect them—hotels, surf stores, pastry shops. It’s almost like the food world, where a lot of brands are local and have an artisanal quality, and are sup- ported by smaller, local stores. That’s how they get off the ground.”

One segment within color that’s teeming with new players is the nail polish category, where new brands seem to pop up daily. “The lesson from nail is that color innovation is incredibly appealing. The candylike quality of the nail colors makes them so desirable,” says Wells. She notes that four-year-old makeup brand Illamasqua has successfully applied a similar approach, where color is king among a narrow selection of cosmetics.

A number of the most interesting indie brands bubbling up are taking an edgier, more artistic stance, says Misha Anderson, co-owner of the salon-apothecary Woodley & Bunny, naming Kjaer Weis, Rouge Bunny Rouge, Belmacz and Ellis Faas as examples. The latter is the namesake line of Dutch makeup artist Ellis Faas, who “has pushed boundaries as a makeup artist” and funneled that into a cosmetics collection, says Anderson, who sells the line at Woodley & Bunny. “When it’s given some attention, it does well,” says Anderson of the line. In general, she tends to give new brands three to five years to make a go of it — an unusually long time. Anderson, who distributes some lesser known brands to other retailers, says the economy has prompted many retailers to favor bigger brands. “Being a [brand] incubator is a risk,” she says. For retailers on the hunt for new lines, she poses the question: “Is it an innovative line that you are going to get behind, or is it an innovative line that you expect to sell itself ?” She adds, “It’s a real issue in retail: How do you support a brand that no one has even heard of?”

“There aren’t any breaks anymore,” says Marcia Kilgore, founder of Soap & Glory, FitFlop and the Bliss spa business, which she sold to LVMH Moët Hennessy Louis Vuitton in 1999. To succeed today, Kilgore quips, “you have to have a rich uncle or you have to focus on one product.” In Europe, her Soap & Glory skin-and body-care brand — which industry sources estimate generates about $110 million — offers a full assortment of color items as well. However, in the U.S., where it is sold at Sephora, it’s positioned as a bath and body range with one sole color product, Sexy Mother Pucker Lip Plumping Gloss. The category is simply too crowded to import more, says Kilgore.

Reflecting on the changes that have taken place since she launched Bliss in 1996 and introduced Soap & Glory a decade later, Kilgore says: “There isn’t that incubation period, because no one is feeling generous in this economy. It’s more competitive now in terms of [the fact that] you have to produce a certain amount of money per square foot or you’re out on your ear.” She also can’t help but wonder if she and her peers had more of a stomach for sacrifice and hard work. “My TV was the size of an iPad for many, many years,” she says with a laugh.


Survival, say entrepreneurs, demands a little bit of luck and lots of funding. Those who have successfully launched their own brand estimate the cost of creating a cosmetics line today ranges between $200,000 to $500,000 for a tightly distributed line, and those figures do not include sampling, merchandising or marketing expenses.

But capital challenges can sometimes lead to big ideas. Jeanine Lobell, who founded Stila, recalls that the exorbitant cost of packaging forced the company to opt for paper over plastic. The decision was radical at the time, but it sealed Stila’s positioning as a quirky, rule-breaking makeup artist line. “I like to say, ‘Necessity is the mother of all invention. It forced us to be different,’ ” says Lobell.

For companies just getting started, funding seems to have all but dried up, say brand founders. As Kilgore points out, investors seem to have their eyes on bigger, faster-growing industries, like technology. “I mean, how much did Instagram sell for, $1 billion? Who wants to get into funding 500 stock-keeping units of lipstick?” asks Kilgore.

“For most, it’s close to impossible to find funding,” agrees Carisa Janes, who founded Hourglass Cosmetics in 2004 and continues to run the business independently without a financial partner.

“It’s more than just having a good idea and putting your name on something,” says Janes, who also was one of the original members of Urban Decay’s creative team. “It requires a combination of financing, industry experience and a point of view.” As for what turns retailers’ heads in today’s environment, Janes says: “There needs to be a unique selling point that is clear and defined.”

Janes has been on both ends of success and disappointment. In the late Nineties, she helped develop a cos- metics brand called Body & Soul that launched at Barneys New York. As it began to expand to additional retailers, financing became an issue and the brand failed. As a result, Janes says she takes a cautious approach to building Hourglass, introducing only about four new products a year, each a first to market.


So, what garners retailers’ attention? “You know it when you see it,” says Lucas at QVC. “I had a brand in a couple weeks ago that introduced a white liquid eyeliner in a pen form. We’ve seen a lot of that in black, but not white. I thought, That’s different, that’s edgy. And then the company showed us how it uses the product in editorial shoots.”


Lucas says she and her team couldn’t keep their hands off it, and the product—whose name she is keeping close to the vest—will likely launch on QVC’s airwaves soon. Lucas has high hopes. “When my team starts to want to play with makeup, we know we’re onto something,” she says. “We’re a tough crowd.”



Environmental conditions for indie brands may not be as favorable as in years past, but the entrepreneurial spirit thrives. Here, influential indies, both established and emerging.




Ellis Faas: Makeup artist Ellis Faas based her brand on the colors that the body naturally produces, from the peachy color of a freckle to the cloudy purple hue of a bruise. She designed the elongated, bullet-shaped packaging for portability. The line is sold at Space NK, Sephora and Woodley & Bunny. Prices range from $30 to $90.


Hourglass: Hourglass’ founder, Carisa Janes, fuses skin-care technology with high-quality makeup to minimize the visible signs of aging. Based in Venice, Calif., Hourglass launched in 2004 at Barneys New York and has expanded its distribution to 330 U.S. specialty stores, including Bergdorf Goodman, Space NK and Sephora. Prices run from $25 to $65.


Illamasqua: This richly pigmented British cosmetics brand looks to empower people to explore their alter egos through color. Launched in the U.K. in 2008 and in the U.S. a year later, Illamasqua is sold at Selfridges, Bloomingdale’s, Harvey Nichols and Sephora. Prices range from $14 to $62.50.


Jouer: Based on a “no makeup artist required” philosophy, founder and creative director Christina Zilber created Jouer to provide mix-and-match customization and portability. Jouer launched at Henri Bendel in 2008 and is now in select Nordstrom and Skins 62 stores. Prices run from $14 to $65.


Sunday Riley: After establishing her skin-care brand, Sunday Riley moved into color cosmetics in 2011. Using the same potent botanicals found in her treatment products, Riley’s aim with color is to create makeup that improves the skin and is suitable for a wide spectrum of skin tones. Sold at Barneys New York, Space NK, Bergdorf Goodman and Sephora. Prices range from $26 to $58.



Ardency Inn: LVMH alum Gilles Kortzagadarian and his partner, Stephane Siboni, have created a line aimed at music and makeup fans alike. Launched at Coachella in April, the collection offers highly pigmented, buildable color cosmetics. Modeled by emerging musicians, the brand aims to bring together two types of artistry. Ardency Inn is available at and will launch in Sephora in February with an additional 40 products. Prices range from $19 to $29.

Ciaté: CharlotteKnight,celebrity nail technician and energetic British entrepreneur, developed Ciaté to address the needs of both the at-home manicurist and the professional nail tech. A pioneer in textural nail lacquers, Ciaté launched in the U.K. in 2007 and came to the U.S. in January. Retail doors include Sephora, Nordstrom, Bloomingdale’s, Lord & Taylor, The Bay and Kitson. Prices run from $15 to $30.

Giordano Beauty: Makeup artist Susan Giordano launched her namesake brand and store in May. Giordano, a favorite of magazine editors and Hollywood stars, wants to create approachable glamour and transform runway colors and textures into easily wearable items. The line consists of makeup and specialty skin and fragrance items. It is sold at the Giordano Beauty boutique and on Prices range from $18 to $60.

Laqa & Co.: In 2010, Georgina Hofmann launched Laqa & Co. as a canvas for emerging artists who express their work on its packaging (and receive a percentage of sales). Inside every box is a leaflet explaining the brand’s mission and where to find the art for purchase. The line currently consists of nail and lip items, and eyeliner launches early next year. Sold at Colette Paris, Kirna Zabête and small beauty boutiques. Prices run from $15.45 to $20.95.

Grace Choi: Grace Choi’s interest in skin care began as a researcher at Weill Cornell Medical College when she was tasked to develop a gentler way to adhere electrocardiography technology to skin. Based on her research, Choi became interested in skin care and in May launched Porcelain Skin BB Cream. Categorized into pink, yellow and olive skin tones, the BB cream Choi formulated is universal for all skin types, she says. Porcelain Skin BB Cream is sold on The price is $34.

Whip Hand Cosmetics: Detroit-based makeup artist and aesthetician Riese Lauriat was constantly mixing pigments on shoots to make signature shades when she decided to create her own line. She abandoned the idea of private-label manufacturing when she saw how undifferentiated most of the products were, and instead decided to source the line in her hometown to generate jobs and produce something truly unique. It was launched in May on Prices run from $9 to $40.