NEW YORK — Gurwitch Products, the licensee of the Laura Mercier brand, has been sold to Alticor Inc., the $6.4 billion personal products and water filtration company that is the parent of Amway Corp.
This story first appeared in the July 28, 2006 issue of WWD. Subscribe Today.
The parties did not disclose the purchase price. Under the terms of the agreement, the Laura Mercier brand will continue to be distributed in the luxury channel, Gurwitch Products will remain based in Houston and there will be no layoffs as a result of the sale, according to Janet Gurwitch, chief executive officer of Gurwitch Products, and Steve Van Andel, chairman of Alticor.
Gurwitch was founded in 1995 by Janet Gurwitch, who was a former executive vice president at Neiman Marcus. Three years later, in 1998, Gurwitch needed additional funding and Neiman’s bought a 51 percent stake in the company. The Laura Mercier product line includes color cosmetics, skin care, fragrance and bath and body.
“I think this is a win-win for everybody,” said Gurwitch. “Neiman’s has been a fantastic partner. They gave me a great opportunity when it was a very young brand … We are celebrating our 10-year anniversary. Alticor will invest in the brand and take us to the next level.”
The Laura Mercier brand is sold in 24 countries. According to Gurwitch, the brand has a wholesale volume of $75 million and retail sales of $125 million. The projection for next year is a wholesale volume of $85 million and retail sales of $150 million. The brand’s biggest territory in sales is the U.S., followed by the UK. The line is also sold in Japan, South Korea, Thailand, France, Canada and Australia, among other countries. The company is considering an expansion of its sales network.
Gurwitch said the management team at Gurwitch Products will not change. In addition to Gurwitch as ceo, Sharon Collier and Bob Hurtte will remain with the company as president and chief operating officer, respectively.
“We have sourcing expertise in the beauty area [and] significant [research and development] in beauty and other resources, which offers Laura Mercier some very significant areas for growth in the future. We are looking for ways to grow and help support them,” Alticor’s Van Andel said.
Alticor’s products include dietary supplements and water filtration. The cosmetics component represents a significant holding in its portfolio, which also includes Amway Corp., Quixtar Inc and Access Business Group. The latter three are involved in the company’s infrastructure, from manufacturing to research and development, and distribution in over 80 countries and territories worldwide.
Artistry makeup and skin care is Alticor’s largest cosmetics business, with over $1 billion in sales. Other cosmetics brands include NAO Cosmetics and E. Funkhouser.
Van Andel noted the Laura Mercier brand is a “good marriage with the Artistry brand.” He compared his firm with Avon and MaryKay Cosmetics as competitors in the direct-selling channel.
The sale of Gurwitch Products, with Financo Inc. as the investment banker, attracted a number of strategic players. And while Gurwitch herself said she had little contact with potential buyers, she was intrigued by Alticor after a chance meeting.
Gurwitch, who lives in Houston, was in Manhattan one day when she unexpectedly walked by Roger Colman, a resident of Grand Rapids, Mich., and the head of acquisitions at Alticor. They chatted for an hour, and while the conversation didn’t clinch the deal, Gurwitch said it made her think about the opportunities available, should Alticor buy the company.
“This deal is indicative of how the channels are changing. Alticor needed to enhance what it was doing and it wanted a position in the luxury market. Alticor has an international presence and sells both in this country and in Asia. Laura Mercier has significant growth potential and Alticor appears able, willing and desirous to invest in that,” observed Joyce Greenberg, managing director at Financo.
“We are confident that Alticor will be a strong partner for Gurwitch Products and will support the continued growth and success of its Laura Mercier brand. Laura Mercier will continue to be an important part of the cosmetics assortment at both Neiman Marcus and Bergdorf Goodman,” said Burt Tansky, Neiman Marcus Group president and ceo, in a statement.