NEW YORK — Tom Winarick knows a thing or two about bringing a U.S. brand to foreign markets. As executive vice president of Prestige Cosmetics, for example, he pioneered the placement of the line in Boots.
This story first appeared in the March 27, 2009 issue of WWD. Subscribe Today.
Now he’s translating that knowledge into helping other American beauty companies take their wares into international doors via a start-up company called The Strategy Studio.
The timing is right, he maintained, not only because going abroad offsets the sluggish domestic market, but because American goods are hot now in areas such as Europe, Canada, Latin America, Asia and Australia. Demand has further spiked since the election, he noted. “It can be more cost effective to get into those markets using a third-party source who already has the knowledge, the contacts and has already done the legwork,” said Winarick, who’s career in beauty marketing spans 25 years.
In fact, he decided to leave Prestige in February after “defining this clear opportunity in the marketplace,” he said. To date, Winarick is working with four companies ranging from less than $1 million in sales to multimillion-dollar firms in nail, beauty accessories, skin care and color. The retail channels he’s securing distribution in include mass, perfumeries and premium venues.
International expansion is more complicated than many firms assume, according to Winarick. “There are local tax issues, trading standards and market nuances all specific to each country and market. Having the right local distributor is a key to the launch and longevity of a product.” Via his past experience, Winarick has distributor networks in place. In addition, there are far more regulations on foreign turfs. “So much more goes into it because European and some Asian markets are far more stringent and there are regulatory procedures for formulas and registering,” explained Winarick.
With more and more American chains facing tough times and stockkeeping-unit optimization, many small and middle-sized beauty firms are struggling. But, international retailers are clamoring for interesting U.S.-marketed lines. “It is a tough time to be a middle-sized beauty firm in the U.S.,” said an executive for a company that helps create loyalty programs. “Can you even succeed? International might give companies the money to keep afloat until the economy improves.”
In tough economic times, retailers tend to scale back and stick with big brands. Niche players are squeezed out until shoppers start spending again and look for unique items. Walgreens is among the chains recently stating it is undergoing a massive sku-rationalization process.
Most American-grown mass beauty lines have about 10 percent or less of sales coming from overseas. But that number has been expanding in the past few years. In addition to Prestige, beauty lines such as Wet ‘n’ Wild, Milani and Styli-Style have expanded to other countries. Winarick, whose company is based in Miami, said foreign retailers are looking for U.S. brands with a point of view. And some are insisting that packaging or point-of-purchase materials say something about being made in the U.S. One buyer said that while American shoppers seem to be confused with European brands, European consumers will buy “almost anything that says made in the U.S.A.”
Winarick said the turnaround time depends on the type of products and the channel for growth, but that some expansions can be accomplished within six months. He has already placed products in chains such as Boots with measurable success. Beyond helping forge distribution abroad, Winarick continues to be involved with the U.S. market.
“I really have wanted to go off on my own for the past few years. Not sure this is the best time to make the leap, but when the opportunity presents itself, you have to take the chance,” he concluded.