Appeared In
Special Issue
Beauty Inc issue 03/09/2012

Sometimes, good-bye means hello.

This story first appeared in the March 9, 2012 issue of WWD. Subscribe Today.

No sooner had Dan Brestle bid farewell to the beauty industry during his final speech as chairman of the Personal Care Products Council, then he was sitting in an interview chatting about the new life he had already begun as an adviser to a private equity group, GF Capital, or as he put it, “the adult supervision in the room.”

His career transformation parallels the industry’s grander redefinition in this age of global cohabitation. That was reflected to a degree in the agenda and the makeup of the crowd as PCPC held its annual meeting in Naples, Fla., on that morning of February 23. During his speech, Brestle had highlighted many of the dynamics that are funneling change. After he recounted the events of his four-year tenure as chairman, Brestle left the industry with some final thoughts.

For one, he pointed out how the industry has changed its thinking about the rest of the world and how that viewpoint needs further expansion. “I challenge the multinational companies to view the regulatory environment through a global lens,” he declared. “By multinational, I’m not just talking about the usual suspects, but any company that sources its raw materials and/or components from around the world. Whether your headquarters are in the Americas, Europe or Asia, your direction and resource assistance to all the national trade associations should be clear and consistent.”

He then tipped his hat to the executives from the 20 international associations who attended the meeting and warned, “Companies would be naïve to think that that’s enough. Human nature, unfortunately, always gets in the way. Whether it’s the ‘not invented here’ mentality, job security or the always present ‘our country is special’ obstacle. The consistent theme for all companies should be to sell as many products as possible with the same ingredients, the same packaging, following the same regulations around the world. Companies must either create internally or fund externally some form of global oversight and coordination to ensure their interests are consistently represented around the world.”

This may sound routine, but it is the tip of a large-scale departure that PCPC has made in the last five or so years to start joining hands with foreign organizations in hopes of harmonizing government regulations and eliminating roadblocks to overseas markets. During the Eighties and early Nineties, the general meetings of the then Cosmetic, Toiletry & Fragrance Association most often focused on domestic controversies. Debate over the vexing issues of Europe tended to stay in Europe—at least until the problems came here.

Brestle, who was succeeded as PCPC chairman by Elizabeth Arden chief E. Scott Beattie, went one step further: pricing. “Consumers are traveling more than ever before, and your ability to control product pricing around the world will be challenged. When a consumer can buy a product in one country at
full retail and sell it for a profit in her home country, it creates a whole new definition of diversion.”

Later, he took time to reflect on issues like the nature of creativity. In his new role with GF Capital, Brestle has put the cosmetics industry behind him, although his career-defining employer for 34 years, the Estée Lauder Cos., is just downstairs from GF’s 46th-floor offices in the GM building in Manhattan. “What I’m doing is moving up four floors,” he wryly observed. Now, instead of fretting over the flagging misfortunes of this season’s gift-with-purchase, he’s learning about the vitamin supplement business with Airborne, one of GF’s acquisitions. He’s also learning about home furnishings with Jonathan Adler and about mouth protection at Bite Tech. As well, Brestle sits on the board of Applebee’s IHOP.

But sitting in the ballroom of the Ritz-Carlton in Naples, the questions facing the beauty industry were inescapable. Bonnie Fuller had just wrapped up a panel discussion on innovations and trends. That session had followed a humorous and provocative presentation by ace trend spotter Jeremy Gutsche.

“Sometimes the fortunate business is the one that has that brilliant creator—the Carol Phillips, the Estée Lauder, the Steve Jobs,” Brestle said. “Sometimes they tend to be the worst people in the world to work with because they are just a pain.”

On the other hand, “I would argue that the people that come after the founder are as important as the founder,” he added. “Estée Lauder is Estée Lauder because of Leonard Lauder. Estée had this dream,” he continued. “Leonard’s genius is taking this company and exploding it around the world.” But these people only come around once in a generation, don’t they? “Estée and Steve Jobs are once in a generation, but there are an awful lot of inventive people who have good ideas and different ways to slice an apple.” Brestle maintained that the industry is on the cusp of another wave of emerging indie brands, similar to the deluge of upstarts in the late Nineties. “I have probably talked to or seen in the last six months five different concepts—‘I’m going to be the next Bobbi Brown or the next Estée Lauder.’ Maybe it’s the economic times. A lot of young people are trying to do it themselves.”

He maintained that the financial environment is ripe. “People are looking to private equity as a way to do it,” he observed. “In the cosmetics business, there has never been a better time.”

And he insisted there’s nothing standing in the way of the itchy and restless youth. “You are seeing brands coming out all over,” he continued. But he does see pitfalls. “Unfortunately, from my standpoint, too many of them think that TV and online is the sole answer. That’s a little naïve because of the personalities involved. What Leslie [Blodgett] does on TV, everybody can’t replicate.

“Online is an easy business to get started,” he continued. “But you’ll never grow to major proportions unless you have alternate distribution. The thing that Leslie did that is probably the most noteworthy, she built a big brand at a prestige level through a mass medium. She went from there to the stores.” One factor necessitating a bricks-and-mortar distribution is the age-old desire by consumers to go into a store and fondle the merchandise. Or as Brestle put it, “There’s been a squeeze-the-tomato mentality in our business forever.”

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