It’s safe to say when Essie Weingarten is ready to sell her nail polish company, Essie Cosmetics, there will be no shortage of offers coming from consumer companies and investment firms alike.
This story first appeared in the April 16, 2010 issue of WWD. Subscribe Today.
“I open about three envelopes a day with offers,” said Weingarten earlier this month over lunch. “I did that just this morning.”
Not that she is even considering such an option — at least not now. Instead, Weingarten, 60, continues to pour her creative energy and business acumen into the Astoria, Queens-based firm she founded 29 years ago. With that comes the opportunity to travel the world as her range of 300-plus nail shades enters new regions of distribution (Weingarten just returned from Germany where Essie entered more than 400 Douglas stores), attend fashion shows to inspire upcoming color choices (Chado Ralph Rucci’s use of browns and earth tones will influence Essie’s fall color collection) and whip up partnerships to expand the brand outside of salons (2009 saw Essie partner with J. Crew, NBC Universal and Jell-O.)
As one of the industry’s largest players, Weingarten said the company generated $150 million in retail sales in 2009. And, sales are up 30 percent in the first quarter of 2010. Even during times of financial uncertainty, she explained, a manicure is accessible and important.
“Getting your nails done is a commitment to yourself. It makes you feel good. And, we can all afford it,” Weingarten said.
Essie’s success is in line with the sales increases seen in the overall nail category.
According to Kline & Co., total U.S. sales of nail polish reached $319 million at the manufacturer level in 2009, up 14.3 percent from 2008. The last time the category achieved this level of growth was in the late Nineties, said Kline — growth that was spurred by fast-dry/one-coat polishes and strong color trends, such as Chanel’s Vamp. For the past several years, Kline & Co. said, natural nail looks and the prevalence of low-priced nail salons hurt the category, until now.
The professional nail category is dominated by three brands: Essie; privately-owned OPI, and Colomer-owned CND. Orly and Deborah Lippman also play in the category, and new nail polish brands seems to pop up every month, each aiming to meet a niche. There’s Mirage Cosmetics’ Sinful Colors, which is sold in both professional and mass market stores; Priti, a naturally positioned nail brand, and Zoya by Art of Beauty, also a natural line. Salons are also increasingly making their own lines, such as J.Sisters and Rescue Beauty Lounge in New York.
Keeping Essie ahead of the pack, said industry watchers, is its overall appeal and potential for growth.
“It is surely a $1 billion brand,” said Alexander Panos, a managing director of TSG Consumer Partners, the New York-based private equity firm. And, Essie fits the description of what he said defines the ultimate brand.
“It can be in many categories, namely eye, lip and face. That’s the Holy Grail for any brand. ”
Essie’s main category is nail polish, though it does have tools and lotion ranges, as well as several lip gloss items.
Whether Essie would fit best in prestige, specialty retail or the mass market would depend on the buyer, said Panos.
Essie is sold in more than 250,0000 salons, spas and beauty destinations in about 101 countries. The firm launches six new colors every 90 days, as well as two trend looks or partnerships a year. Expanding the brand outside of salon and professional distribution is a focus: Nordstrom now uses Essie in its spas and during Nordstrom in-store manicure events. Partnerships have been key, too. In the spring of 2009, Essie partnered with Jell-O when they were promoting two new sugar-free Jell-O flavors, and in turn launched two nail polish colors, Strawberry Acai and Raspberry Goji. The J. Crew partnership began last summer and to date has brought about 14 colors, in addition to five shades with Crew Cuts, J. Crew’s kid’s division. And, a deal with NBC Universal last year brought about the nail polish, Starter Wife, timed to launch with the USA Networks T.V. show of the same name starring Debra Messing.
While there are no plans to create any sublines — 10 years ago a distributor line called Max, named after Weingarten’s husband, was created though it was pulled after four years — Essie is diverted to some mass chains. Admittedly, there are opportunities to grow the business, such as legitimately entering the mass market, but Weingarten said taking “baby steps” has served the company well.
Jani Friedman of Demeter Group, a boutique investment bank, said Weingarten could triple her business by expanding to mass, a move she does not anticipate impacting Essie’s salon business.
“It would be more like, ‘Oh, I can get my favorite salon brand at Safeway,’” said Friedman.
Born Esther Weingarten, she attributes her success in beauty as simply a “gift,” believing if she is feeling a certain desire for a color, other women, from those in the know to the masses, are too.
“It’s gut. It’s not market research. As a woman, I feel I know what women want.”
Perhaps the biggest perk of her job is traveling, which serves as inspiration for many of her colors and collections. It also enlightens her on foreign beauty rituals. Like when she visited Lebanon last summer to celebrate the entry of her products in the Middle East and learned how when women pray there, as is customary three times a day, they remove their polish each time — and then reapply it.
“Maybe we can make that global?” quipped Weingarten, who hails from Hollis Hills in Queens, and now lives on Manhattan’s Upper East Side.
Essie got its start in Las Vegas in the early Eighties when Weingarten believed the market was ready for more than the reds, pinks and browns salons offered. It was back then that Weingarten’s knack for naming colors began. Some of the first include Bordeaux, Blanc, Baby’s Breath and Ballet Slippers, colors still in the line today.
And, color choice says a lot about who you are.
“If you wear Ballet Slippers, that says everything about you. It’s like a nod between women,” Panos said of the sheer pink shade. “People are very loyal to Essie, and that’s gold in the brand-building business.”
Sometimes Weingarten has an easy time coming up with a new color name; sometimes a name inspires a color, or the other way around. Sometimes, she said, she has a bunch of great names she’ll give to her art director, with the idea that a campaign can be built around them, then color development follows. She has a drawer full of names just waiting to be used.
Friedman said of the Essie shade range, “What they do best is offer as many shades of pink as possible, like Ralph Lauren does in paint color.”
While it’s easy to conclude that nail polish could seemingly be inserted into any region, manicures and pedicures are really a reflection of culture, not lifestyle, Weingarten learned. To that point, Weingarten recalls one of the most difficult regions to break into: Italy. “I hate to say it, but the culture there is that the woman is in the kitchen, home and cooking. She can look beautiful with her hair, jewelry, makeup, a scarf, clothes. But when it comes to her hands, she is cooking.” Over the past eight years, Weingarten said she was able to penetrate the market, claiming the Italian woman is now “successfully manicured.”
And since there is always something new, Weingarten was excited to talk about the brand’s items for spring and summer. There is the Resort Collection, the Wedding Collection and The Summer Collection, as well as a new line of antiaging hand creams, called Ejuvenate.
What clearly makes the brand special is Weingarten herself.
“She started it 25 years ago and built it brick by brick,” said Panos. “She really understands women, and she is an icon for independent women. She is a great asset to the brand.”