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NEW YORK — The beauty business is focused on the finished product — the item that bears the name of its marketers whether it is Revlon or Estée Lauder.

But the industry has another dimension that often is overlooked — the contract manufacturers who develop the technology that savvy marketers grab to sell to retailers. Without these companies, the industry wouldn’t have innovations such as transfer-proof lipsticks and foam delivery systems for skin care.

At the recent HBA Expo, both beauty marketers and retailers strolled the aisles looking for the resources with the next clever package or must-have formula. Without these companies, the beauty business would be void of innovation.

One company that has been at the forefront of new technology in beauty is Schwan-Stabilo. The company is known for its breakthroughs in writing instruments, but also for its cosmetics pencils that are produced under logos ranging from Revlon to Chanel. The cosmetics division of Schwan-Stabilo accounts for more than 60 percent of total volume.

The company, in fact, is credited with bringing to market the first cosmetics pencil. Dating back to 1927, Schwan’s pencils were first used to mark cutting lines on patients’ skin before operations. Savvy women discovered the pencils were ideal to serve as eyebrow pencils. That led to the Matic and Dipliner series of products. The company’s latest take on pencils is Powder-Magic, the first-ever powder eye shadow with a twist mechanism.

Germany-based Schwan-Stabilo has an international production network that affords quick production times in a cost-efficient manner. Subsidiaries are located in Europe, Asia, South America and the U.S. The majority of the workforce is located in Germany, at a state-of-the-art facility.

Sensing the need for skin care innovation, the company has divided into two segments — color cosmetics and skin treatment. Skin treatment represents a growing opportunity for Schwan-Stabilo, which is working with national brands, but also can devise specialty lines for retailers.

As a contract producer, the company prides itself on forecasting color trends. For winter 2005, Schwan-Stabilo portends a season that is about emotions, individualism and being a nonconformist. The looks are inspired by bohemians, street gangs and honky-tonk entertainment.

With the rush for new and innovative products becoming more important at mass, the caliber of the contract supplier is taking on a more important role than ever in beauty.

This story first appeared in the October 14, 2005 issue of WWD. Subscribe Today.


Traditional advertising vehicles have lost some of their punch in bringing women to stores for beauty needs. Many marketers have turned to increased in-store support or more targeted advertising. That’s the philosophy being used by BTG Cosmetics, manufacturer of the Toma and American Woman brands. Although known mainly for its salon distribution, BTG has been looking to expand in the retail sector. In a unique agreement with Global Media Fund, BTG will devote $12 million to a media campaign consisting of a 50/50 blend of radio and print. Global Media’s News USA Media distribution will develop feature articles about BTG that will reach 10,250 daily and weekly newspapers and news and wire services. There is also a national radio promotion with mentions made of the brands on 6,000 radio stations across the U.S.

These “advertorial”-style messages will introduce consumers to the brand, which has been under the radar with most women until now. “Over the past two decades, Global Media Fund and News USA have represented many of the most successful and powerful companies in the cosmetics industry, such as L’Oréal and Liz Claiborne. They have an unparalleled track record. BTG will be able to penetrate the market successfully and increase our sales to the highest levels achievable,” said Ben Friedman, BTG president.


Other nontraditional marketing avenues are gaining attention again and, not surprisingly, getting celebrity endorsements to rival the retail arena. A case in point is Southern Cosmetics Inc., an Internet direct-marketing company, which just closed a deal with Naomi LLC. As part of the asset purchase, Southern acquired all of the assets of Naomi, a cosmetics company endorsed by Naomi Judd.

With the transaction, Southern plans to focus on products promoting antiaging, health and improved self-image. Catherine Basinger, chief executive officer of Southern, said in a statement, “Our acquisition of Naomi LLC will further expand Southern Cosmetics’ leadership position in the health, beauty and nutraceutical marketplace while deepening and strengthening our relationships with all of our customers. We will be able to significantly expand our current inventory with the addition of the successful Esteem by Naomi Judd product line.”

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