NEW YORK — The world doesn’t need a another mauve lipstick.
That decree is frequently heard from the lips of Physicians Formula’s new chief executive officer, Ingrid Jackel, who since 1997 has ushered the mass market makeup brand into a premium-priced, problem-solution beauty offering.
Jackel’s mission, she asserts, is to innovate, not duplicate.
“The category, in my mind, has suffered from what I like to call acute ‘me too’ syndrome, which seems to have mutated lately into a more severe case of cheap ‘me toos,'” quipped Jackel, commenting on what ails the mass market beauty business. “It only does two things: It lowers overall perception of the cosmetics business — particularly in the midst of a cross-channel shopping phenomenon — and it cannibalizes successful innovation that is actually worth a premium.”
Bent on persuading consumers to trade up, the Physicians Formula offering is heavy on color-correcting products designed to address beauty concerns such as dark under-eye circles, blemishes and uneven skin tone. Its bevy of loose powders, bronzers and concealers seek to distance Physicians Formula from its color cosmetics-focused peers.
Now, fresh from its initial public offering, Physicians Formula is out to shed its niche status by entrenching itself deeper into the mass market and blazing into new channels, including infomercials and international markets.
Jackel confirmed that Physicians Formula plans to unveil a 30-minute infomercial during the first half of this year. The spot, featuring Jackel, will focus on building awareness of Physicians Formula. Jackel acknowledged that the company may someday choose to use the small screen to introduce a new brand, as well.
She added that the company’s robust pipeline could support additional brands, but said the firm does not plan on expanding its portfolio for several years.
On the international front, the company attributes a scant 5 percent of its sales to business outside the U.S., principally in Canada and a small portion in Australia. Physicians Formula is in the midst of drafting an international blueprint that would likely include European markets.
“The whole cross-channeling shopping phenomenon is already embedded in the European distribution,” said Jackel, adding that she also keeps an eye on emerging markets, including Brazil, Russia, India and China. “I want to take the brand to one or two new markets at a time,” Jackel said, adding that many of the company’s competitors, including Procter & Gamble, attribute more than 50 percent of their sales to international markets.
Just prior to the IPO, which was completed in November, Jackel left her post as senior vice president of marketing for the top seat. She said the promotion simply validates the approach of the company’s long-standing management trio, which includes Jackel, Jeff Rogers, who was recently promoted to president, and Joe Jaeger, the company’s chief financial officer.
The team has worked together since 1997, when the company was owned by Pierre Fabre Inc. In November 2003, the Boston-based investment group Summit Partners acquired a majority stake in Physicians Formula. Pierre Fabre retained a minority interest in the cosmetics firm and continued to occupy a seat on its board.
Today, the lean company employs 190 people. Jackel said despite her new title and the company’s public status, there are no plans to change Physicians Formula’s current strategy.
“It’s been working. There’s absolutely no need to change it,” she maintained.
Physicians Formula is sold in some 23,000 mass retail doors. With nearly 100 new products slated for spring, industry sources said the brand is asking for another 2 feet of display space, which would bump its average real estate per store to 6 feet.
The company’s growth plans include penetrating new mass market retail accounts, and, beginning in 2008, the firm expects to expand its presence in color cosmetics categories, including lip and nail care and plant its flag in skin care.
Physicians Formula had planned to delve into skin care in 2006, but aside from introducing one item, those plans were put on hold as the company prepared for its IPO. Jackel said skin care is still part of the firm’s strategic plan for growth and expansion, adding that the product called Derm@Home Mineral MicroDermabrasion System was introduced at the same time as Mineral Wear Mineral Makeup, which quickly emerged as a star.
“We had such tremendous success with our Mineral Wear franchise that we focused all our energy on that priority, and I think we made the right choice, because it’s become a very strong franchise,” Jackel said.
This spring, the beauty firm will phase out Derm@Home and expand the Mineral Wear line with eye shadows, eyeliner and blush.
Jackel — who is frequently spotted at trade shows toting a black portfolio that doubles as her fashion and beauty trend book — will continue to shepherd product development. “I’ve always been very involved in new product development and marketing. It’s my first love,” Jackel mused, adding that her role had progressively broadened over the last three years to include management tasks.
In December, she hosted a product brainstorming session in her home. “I like to take the team out of the office, away from the day-to-day activities,” said Jackel. “This year, I decided to host at my house for a change of pace. It’s a more intimate environment and people feel free to think out of the box when they are not in the setting where they go to work every day.”
For Physicians Formula, the products idea well runs deep. “This is an ever-expanding, self-generating category. Every day, there are problems that we can solve on women’s faces.”
Jackel reflected that, in her view, the role of a ceo is to be “able to communicate and share the passion you have for the business.” Her goal is to make that passion “contagious” and weave it into the company’s corporate culture.
Jackel, who grew up in the Southwest of France in Toulouse, said she was drawn to the romantic nature of the beauty business. “It’s such an emotional business, so the traditional roles of the mass market do not really apply,” she said. “It’s not about how big you are and how much money you have to spend. It’s about the connection you establish with your consumer at a deeper level, with the right products, of course.”
She continued: “What’s ironic is that most people think about beauty as superficial. But to reach a consumer in this business, you need to relate to her inner thoughts and appeal to a variety of her needs. Women are complex beings, so when it comes to fulfilling their needs in categories that are touchy-feely, mathematical models and spreadsheets just don’t work.”
Physicians Formula’s approach seems to be working. The company reported net sales of $68.9 million for the nine months ended Sept. 30, an increase of approximately 20.6 percent from $57.1 million for the same period in 2005. Its 2005 sales totaled $78.7 million in 2005, representing a compound annual growth rate of 22 percent.
Jackel began her career in beauty as an intern at Pierre Fabre. While a business student at Nantes Atlantique Graduate School of Management in France, she wrote her thesis on the company, and later presented it to Pierre Fabre executives in France and the U.S. Immediately following her U.S. presentation, she was offered a job working on the Pierre Fabre’s French skin care brand, Elancyl.
From the start, she has been guided by her drive to innovate mass market beauty. “Innovation is the key to keep this industry dynamic and growing,” she said. “What I have seen in the last few years is a strategy aimed at copying existing product offerings and strategies aimed at commodifying the category through cheaper and lower-quality alternatives. Those strategies, in my mind, are counterproductive. This category represents an affordable luxury, so why would anyone want to trade consumers down?”
Jackel — who maintains a simple beauty regimen of concealer, loose mineral powder, bronzer and mascara — has developed a knack for juggling. Speaking to WWD from the parking lot of the school her five-year-old son attends, she reflected on her career path, saying, “It was such a fabulous business opportunity to take a brand that was originally a regional brand, in an industry of giants, and to make it a brand in the top rankings. That’s something that not everybody gets to do in her career.”
Jackel describes herself as an emotional manager and often becomes energized when talking about the beauty business. She said, “It’s going to be hard not to get an excited answer from me.”