NEW YORK — A German leader in beauty hopes that American retailers are ready for something different.

This story first appeared in the January 15, 2010 issue of WWD. Subscribe Today.

With U.S. merchants editing duplicate stockkeeping units and brands not holding up on balance sheets, Germany-based Cosnova hopes there is room to inject newness into the market with its Essence color cosmetics. “The timing is right because there hasn’t been that much newness in the U.S. market and we think we can add excitement to a business that has been relatively flat,” said Howard Schwartz, general manager of Cosnova Inc.

Success of other European imports into U.S. mass retailers has been mixed, but Schwartz believes Essence has the pedigree to make it click on American soil. Essence is the number-one value cosmetics brand in Germany and the leader in units sold, according to Cosnova. In addition to Germany, Essence is sold in 32 other countries. “We have very loyal consumers and, based on our success in other markets and tests here, we feel we have a big opportunity in the U.S.,” said Schwartz.

America is the latest on its radar and the firm tested its color products last year in Ulta and is rolling them out chainwide with an endcap program. All Ulta stores should have Essence by April, according to Schwartz. He said the company is excited “to be associated with Ulta, which is a high-profile and innovative national account.”

What makes Essence stand out from existing competition in the U.S, said Schwartz, is not only a quick turnaround time for edgy fashions (versus large brands, where new items can take years to launch), but also high quality at reasonable prices. Recently, for example, Essence was one of the first to market with a variety of carbon black products to accomplish the very dark look popular on runways for eyes.

From a pricing standpoint, the collection of nail, eye, lip and face items all retail for less than $5. Although the range in Europe includes skin care, only color cosmetics are slated for U.S. distribution. The company believes the 150 sku’s sold here can achieve retail sales of $100 million in the U.S.

With Ulta as a starting point, Cosnova hopes to extend its reach in America. Ulta has been a fertile incubator for many brands, aiding in the retail store growth of Bare Escentuals and Smashbox.

Another point of differentiation for Essence, said Schwartz, are limited editions launched throughout the year. Schwartz said the items, which are not available once they sell out, are so popular that consumers hit the Web site “thousands of times,” to see what is coming in the pipeline.

Essence is targeted to a young and trendy audience, predominately 14 to 25, but has attracted older consumers as well in test marketing. “This line is all about incremental sales,” said Schwartz. “People don’t come in saying they are going to buy a new nail color. They see our product in the store and they want it to match a new outfit or to be in style.” Schwartz thinks the vibrant eye and nail items will be the briskest movers for Essence.

He added that, since many mass marketers currently look alike, lines such as Essence provide a “point of differentiation.” He also said the pricing in this economy is a motivating factor. “Shopping in a recession has people shopping for value. We find once they try our items, they like them and return to the store to buy them. We help drive traffic. We build the category by driving incremental purchases,” Schwartz explained. Research does reveal that beauty shoppers are often trading down and — if they are pleased with value choices — may not return to brands they favored before the economic downturn.

Cosnova also operates a freestanding store selling Essence products outside of Frankfurt, where concepts and new ideas can be tested.

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