GIVE MEMORE!

THE NEW MARKETING MANTRA IN HAIR CARE

HOLLYWOOD’SRED CARPET WHIZ KIDS

INFOMERCIAL-MANIA

DOLLAR STORESCASH IN

THE BUSINESS OF BEAUTYAN ISSUE OF WOMEN’S WEAR DAILY

WWD IS A REGISTERED TRADEMARK OF ADVANCE MAGAZINE PUBLISHERS INC. COPYRIGHT ©2012 FAIRCHILD FASHION MEDIA. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 205, NO. 75. SATURDAY, April 13, 2013. WWD (ISSN 0149–5380) is published daily (except Saturdays, Sundays and holidays, with one additional issue in March, May, June, August, October and December, and two additional issues in February, April, September and November) by Fairchild Fashion Media, which is a division of Advance Magazine Publishers Inc. PRINCIPAL OFFICE: 750 Third Avenue, New York, NY 10017. Shared Services provided by Condé Nast: S.I. Newhouse, Jr., Chairman; Charles H. Townsend, Chief Executive O!cer; Robert A. Sauerberg Jr., President; John W. Bellando, Chief Operating O!cer & Chief Financial O!cer; Jill Bright, Chief Administrative O!cer. Periodicals postage paid at New York, NY, and at additional mailing o!ces. Canada Post Publications Mail Agreement No. 40644503. Canadian Goods and Services Tax Registration No. 886549096-RT0001. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, RPO West Beaver Cre, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615 5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 15008, North Hollywood, CA 91615-5008, call 800-289-0273, or visit www.subnow.com/wd. Please give both new and old addresses as printed on most recent label. For New York Hand Delivery Service address changes or inquiries, please contact Mitchell’s NY at 1-800-662-2275, option 7. Subscribers: If the Post O!ce alerts us that your magazine is undeliverable, we have no further obligation unless we receive a

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CONTENTS 3

FEATURES

DEPARTMENTS

26 Small Screen Dreams The infomercial channel is booming as established players look to solidify their position amidst an onslaught of new entrants.

30 Maximum Volume Hair-care marketers are aiming to transform the way women approach hair-care regimens—and pump up sales to boot.

36 Penny Press As one of the fastest-growing channels in retail, the value-oriented dollar stores are now also the most competitive.

40 Red Carpet Whiz Kids Hollywood’s hottest young hair stylists and makeup artists.

ON THE COVER: Carola Remer at ONE Management photographed exclusively for WWD Beauty Inc by Jonas Bresnan. Makeup by Kaoru Okubo for NARS at Management + Artists. Hair by Dennis DeVoy at Art Department. Styled by Ada Kokosar at Artlist.

The season of statement-making hair styles: Page 18.

CORNER OFFICE8 The Laugh Master Under Aurelian Lis, Benefit’s

humorous ethos has flourished, but the brand’s explosive growth in North America is no joke.

10 Black Book: Brooke Wall The super-chic founder of The Wall Group shares her favorite L.A. haunts.

11 My First Job: Jerrod Blandino Getting creative at Chuck E. Cheese.

BEAUTY BULLETIN14 Pop Rocks Spring’s bright color palette.

16 Launch Window Key products hitting stores now.

18 Singular Sensations Inspired looks from the European runways.

CONSUMER CHRONICLES20 Tinseltown’s Newest Beauty Destination Testing

the waters at Hollywood’s swanky new Walgreens.

24 Shopper Stalker Who’s buying what—and why–on Manhattan’s Upper West Side.

MISC6 Pete Unplugged Pete Born, WWD’s executive editor

of beauty, surveys the global indie beauty scene.

42 Flex Time Ole Hendriksen flips out.

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he book Granularity of Growth was published in 2008, but it is a concept that has become especially ubiquitous today in beauty as growth plateaus in traditional sectors. As a result, marketers are forced to create new opportunities in unexpected places, and many have done so with spectacular results—to wit, Clinique’s Even Better Clinical

Dark Spot Corrector, which blasted open the brightening category in the U.S. Although the stories in this issue of WWD Beauty Inc are very diverse, they have a common thread: The retailers and categories featured are all experiencing explosive growth in a period when single-digit increases are the norm.

Take the dollar store channel of retail, which is growing at a pace faster than Starbucks, reports WWD’s contributing editor and mass-market expert, Faye Brookman. This year alone, two of the biggest players will open more than 1,000 new stores combined, and the channel is expected to continue nabbing market share (and top executive talent) from drugstores and discounters. Brookman explains what this means for beauty in “Penny Press” on page 36.

Another fast-growing and ever-evolving channel is infomercials. The direct-response television business is booming—spending increased 47 percent in 2012 and was up 38 percent in January alone this year—but as many brands are discovering, a big spend doesn’t necessarily translate into big sales. WWD’s West Coast–based beauty reporter Rachel Brown talked to the industry’s most successful practitioners to discover what it takes to win today and the foundation brands are laying for a multiplatform future. The results are in “Small Screen Dreams” on page 26.

Mass-market hair-care brands are also looking for a big win. After years of stagnant growth, the category has been energized in the past 16 months by an onslaught of launches—more than 500 new stockkeeping units alone from the industry’s biggest names. This generation of innovation has a singular goal: to transform consumer’s behavior and convince women to evolve their hair-care regimens into multistep programs that mimic skin care. “The hair-care market is undergoing a massive, long-term transition,” Unilever’s Gina Boswell told beauty financial editor Molly Prior. “Increasingly hair consumers are becoming more sophisticated and understanding that products work as a regimen of wash, care and treatment and they are willing to invest.” The early numbers bear out Boswell’s optimism. Find out how the market is expected to evolve this year in “Maximum Volume” on page 30.

There is another theme running throughout this issue: an emphasis on West Coast brands and leaders. You’ll find Benefit’s Aurelian Lis in “Master Class,” skin-care entrepreneur Ole Henriksen in “Private Lives,” and the hottest young Hollywood makeup artists and hair stylists in “Red Carpet Whiz Kids.” Although he brings a unique sensibility to the industry, Lis’ ideas about beauty are universal. “We all work in the cosmetics industry, which is inherently frivolous by nature, but it makes a big impact on people’s lives,” he says. “It is an awesome job. And very motivating.” I couldn’t agree more. —JENNY B. FINE

EDWARD NARDOZA EDITOR IN CHIEF, WWD

PETE BORN EXECUTIVE EDITOR, BEAUTYJENNY B. FINE EDITOR

JENNIFER WEIL EUROPEAN EDITORJULIE NAUGHTON SENIOR PRESTIGE MARKET BEAUTY EDITORMOLLY PRIOR BEAUTY FINANCIAL EDITORFAYE BROOKMAN CONTRIBUTING EDITOR BELISA SILVA BEAUTY MARKET EDITOR, MASSJAYME CYK EDITORIAL ASSISTANTOLIVIA LANDAU EDITORIAL INTERNKATIE KRETSCHMER COPY EDITOR

ARTBARBARA SULLIVAN ART DIRECTOR

CONTRIBUTORSSAMANTHA CONTI AND NINA JONES (London), MILES SOCHA (Paris), CYNTHIA MARTENS (Milan), MARCY MEDINA AND RACHEL BROWN (Los Angeles), MELISSA DRIER AND SUSAN STONE (Berlin), AMANDA KAISER (Tokyo)

PHOTOCARRIE PROVENZANO PHOTO EDITORLEXIE MORELAND ASSOCIATE PHOTO EDITORJENNA GREENE ASSISTANT PHOTO EDITORERIN FITZGERALD STUDIO MANAGEREILEEN TSUJI PHOTO COORDINATORROBERT COHEN PHOTO FACILITATORJOHN AQUINO, GEORGE CHINSEE, STEVE EICHNER, KYLE ERICKSEN, THOMAS IANNACCONE, ROBERT MITRA PHOTOGRAPHERS

CONTRIBUTING PHOTOGRAPHERSRUVEN AFANADOR, KENJI AOKI, DAN BORRIS, NIGEL DICKSON, BEN HASSETT, HENRY LEUTWYLER, MARK HANAUER, MICHAEL NAGLE, JEFF RIEDEL, PHILIPPE SALOMON, DAVID LEWIS TAYLOR, YASU+JUNKO

BEAUTY INC ADVERTISINGPAUL JOWDY VICE PRESIDENT, GROUP PUBLISHERPAMELA FIRESTONE ASSOCIATE PUBLISHERJENNIFER MARDER ADVERTISING DIRECTORELLIE GHADIMI ADVERTISING DIRECTOR, BEAUTY JILL BIREN WEST COAST DIRECTORCOURTNEY HAZIRJIAN WEST COAST ACCOUNT MANAGERBAVA GUGLIELMO INTERNATIONAL DIRECTOROLGA KOUZNETSOVA ACCOUNT MANAGER, ITALYCHRISTOPHER SANTORELLA BEAUTY SALES ASSISTANT

MARKETING/CREATIVE SERVICES JANET MENAKER EXECUTIVE DIRECTOR, MARKETINGEMILY CORTEZ EXECUTIVE DIRECTOR, CREATIVE SERVICESKRISTEN M. WILDMAN EXECUTIVE DIRECTOR, EVENT MARKETINGMARJORIE KEATING PUBLIC RELATIONS DIRECTORJENNIFER PINCUS DIRECTOR, INTEGRATED MARKETINGFABIO SALLES CREATIVE DIRECTORJULIA DONAHUE COPY DIRECTORALEXIS WARCHALOWSKI DIGITAL DEVELOPMENT DIRECTORBRIANNA LIPOVSKY ASSOCIATE MARKETING DIRECTORJENNIFER BORCK SENIOR INTEGRATED MARKETING MANAGER MICHAEL FOUNTAS MANAGER, EVENT MARKETING ALISSA GROSS MANAGER, INTEGRATED MARKETING JESSICA CASEY MANAGER, INTEGRATED MARKETINGAMANDA MULLAHEY ASSOCIATE MANAGER, INTEGRATED MARKETINGDANIELLE K. STEWART MARKETING COORDINATORCHRISTINA MASTROIANNI PR ASSISTANT

PRODUCTIONGENA KELLY VICE PRESIDENT, MANUFACTURINGCHRIS WENGIEL GROUP PRODUCTION DIRECTORKEVIN HURLEY PRODUCTION DIRECTORJILL BREINER ASSOCIATE PRODUCTION MANAGER

CIRCULATIONELLEN DEALY SENIOR EXECUTIVE DIRECTORJOHN CROSS PLANNING AND OPERATIONS DIRECTORPEGGY PYLE MARKETING DIRECTORSUZANNE BERARDI SENIOR ONLINE MANAGERALISON CHRISTIE ASSISTANT MARKETING MANAGER

FAIRCHILD FASHION MEDIAWILL SCHENCK EXECUTIVE VICE PRESIDENT, CRO SUZANNE REINHARDT VICE PRESIDENT, FINANCE & OPERATIONSDAN SHAR VICE PRESIDENT, GENERAL MANAGER, DIGITALMELISSA BRECHER CHIEF MARKETING OFFICERNICOLE ZUSSMAN VICE PRESIDENT, HUMAN RESOURCESMICHAEL ATMORE EDITORIAL DIRECTOR, FOOTWEAR NEWS & DIRECTOR OF BRAND DEVELOPMENT DEVON BEEMER FINANCE DIRECTORJANET JANOFF BUSINESS MANAGER

NANCY BUTKUS CREATIVE DIRECTOR

PETER W. KAPLAN EDITORIAL DIRECTOR

GINA SANDERS PRESIDENT & CEO

TGoing for the Growth

WWD BEAUTY INC

EDITOR’S LETTER

KEY POINTS FROM THIS ISSUE5

4

1. TUNE IN: The infomerical channel is growing and becoming increasingly integrated with other platforms. PAGE 26

2. REGIMEN CHANGE: Hair-care marketers are trying to grow the pie by transforming women’s habits. PAGE 30

3. VALUE ADDED: Dollar stores are booming, proliferating even faster than Starbucks. PAGE 36

4. GOOD TIMES: Why making people laugh is good for sales. PAGE 8

5. POP TOPS: Bright colors are all the rage for spring. PAGE 14

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iche is going global.That was made clear in March at the Cosmoprof fair in Bologna,

with an exhibition of indie brands, mostly from Europe and the U.S. Housed in one of the cavernous pavilions, the Extraordinary Gallery comprised 26 small companies all looking to score connections with distributors and retailers, usually from outside their home market.

That display of young upstarts looking for opportunity overseas came on the heels of the Personal Care Product Council annual meeting in Florida, during which some of the industry’s key players discussed ways of unkinking trade-snagging government regulations around the world.

Clearly, it’s a global world and brand building is no longer a backyard affair, as it had been in the freewheeling era that was the Nineties, when the U.S.—with its strong specialty-store competition, the arrival of Sephora, and more than 30 multibrand beauty Web sites hungering for new labels—was the cradle of all things indie. Those were halcyon days, when MAC Cosmetics shocked the market, first with Madonna, then RuPaul. Bobbi Brown, with its fistful of lipsticks, Benefit Cosmetics and the motorcycle-riding Kiehl’s all rose to prominence out of a tribe of beauty hipsters.

Those days seem distant and these days seem different, with a change in retail realities. There’s a constant profusion of newcomer brands streaming across the Internet. Karen Grant, vice president and global industry analyst of NPD Group, suggests that the Web offers nascent outfits a national voice without the need for building distribution or managing inventory logistics. Also, a brand can try out a key item, rather than having to float an entire line.

But the digital flow doesn’t seem to translate into significant bricks-and-mortar business, at least not on the scale of the past.

“Especially for indie businesses, it is really difficult to get a foothold in the U.S.,” says Robin Coe-Hutshing, who in her earlier retail career at Fred Segal was the West Coast indie queen, launching virtually every buzz-generating name on the scene. Now she and her business partner, Nicole Ostoya, are busy creating brands. Ostoya was at Cosmoprof tending two booths featuring their brands, like The New Black and Khroma Beauty, in the Extraordinary Gallery.

“There are some unusual opportunities and refreshing opportunities overseas that are kind of retro feeling in a way that doesn’t exist in the U.S.,” Coe-Hutshing says. “There are a number of perfumeries and multi-unit stores that have the ability, and the desire, to do business with niche brands,” she says. She notes that she and Ostoya made a range of contacts at the show and now are in talks with Boots and Harvey Nichols, for instance.

She adds that there’s a kind of “reverse chic” at work, meaning that foreigners see “some magic” in U.S.-made products, just as what comes out of Paris or London “has an exotic appeal to us.”

Although American specialty stores and boutiques still support indie brands, the intensity seems to have lessened. “There’s just not the appetite there used to be for niche brands, unless they have the ability to really support the stores by demonstration, sampling, advertising, marketing and a whole host of other

things that cost a whole lot of money. [The indie brands are] just not in a position to gain entry into most of the stores that provide a meaningful amount of revenue,” says Coe-Hutshing

Much of the previous opportunity was wiped out by the great recession, Coe-Hutshing says, but there are some high-octane retail boutiques and venues popping up that are embracing indie brands, such as Woodley and Bunny in Brooklyn. These, however, tend to be local, since it is difficult to re-create the niche magic in multiple locations. “That’s the problem with niche beauty in general,” she says. “It’s hard to be niche and be big at the same time.”

Speaking from her retail experience, Coe-Hutshing says it would be great to have brick-and-mortar stores and e-commerce platforms to support new brands. But the other side of the argument is that the young brands simply have to wise up. “Some of them are not very savvy about the way they approach marketing and marketing themselves,” Coe-Hutshing maintains. “There always have been a handful of good ones and many, many dreadful ones that need redirection.”

The Extraordinary Gallery was designed by Cosmoprof as an experimental showcase to attract buyers and distributors seeking novelties, and not restricted to any particular retail channel or even bound by the orthodox definition of a beauty

product. “[It] is a little bit of a melting pot, a place people can display an idea that can become a cosmetics product, a supplement, a home décor product,” says Laura Zaccagnini, director of international affairs of SoGeCos S.p.A., the organizer of Cosmoprof. Just as the product definition is purposely free-form to create the most fecund atmosphere possible, the idea of retail destination is also kept wide open. “We don’t want to be limited by saying this is a beauty salon product, a spa product or a perfumery product.”

To encourage diversity in the audience, Cosmoprof brought in buyers from Latin American and Japan this year, because Europe “is so saturated with product.” According to Zaccagnini, it worked. “[Exhibitors] didn’t expect so many contacts from so many different parts of the world,” she says. Agreement came on that point from Roger Aoun, international marketing director from the London-based Beauty Lab Co. “What we have done in four days probably would have taken a year to do,” he estimates.

In Paris, Didier Arthaud, founder and chief executive of the naturally based men’s skin and personal-care brand 66 30, agrees with Zaccagnini that the most vexing problem plaguing fledgling brands is a lack of dependable, long-term investment.

He estimates that 95 percent of indie brands disappear. Competition for investment dollars is tough, he says, because it take five to seven years for a young beauty brand to build a bankable reputation. A lot of investors are drawn to Silicon Valley, where “in two to three years they can make much more money.”

But there have been plenty of other inquiries. Arthaud says he attended the Cosmoprof show in Hong Kong last November and “it was amazing.” The intimate niche-oriented format in Bologna also appeals to him. “If you put a niche brand in a supermarket, nobody is going to see it,” he says. In any event, it apparently worked. On a recent Friday evening, Arthaud was having a discussion with a Swedish distribu-tor he met at Cosmoprof. “It’s gone very, very fast,” he says. “We are quite happy, yes.”

6 PETE UNPLUGGED

NThe Survival StakesAs the challenges for small brands grow ever bigger, WWD’s PETE BORN discovers a handful of intrepid indies who are staying the course.

“That’s the problem with niche beauty in

general. It’s hard to be niche and be big

at the same time.”

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urelian Lis studied physics at Oxford, but for him, success in the beauty business isn’t rocket science. “As a brand, you need a reason to exist,” says Lis, general manager, Americas, of Benefit. “Ours is to make our customers laugh.” The success of that strategy is no joke: Industry

sources report the brand, owned by LVMH Moët Hennessy Louis Vuitton, ended the year with global retail sales of $760 million, with North America posting 30 percent year-over-year growth to reach sales of $250 million.

Lis has an unusual background for a beauty executive: Post graduation, he worked on an offshore oil rig in Bombay, before heading to Unilever, where he worked in the foods division. He’s also an entrepreneur, having started and sold Prescribed Solutions Customized Skincare, a brand sold in doctor’s offices. A self-professed nerd who relishes combining the scale of an established business with the energy of an emerging one, Lis’ experience instilled in him a true affinity for beauty. “We all work in the cosmetics industry, which is inherently frivolous by nature, but it makes a big impact on people’s lives,” says Lis. “It is an awesome job.”

What is your assessment of the current beauty environment

and where do you see the most opportunity?

The current beauty environment in the U.S. is quite healthy. Differentiated businesses are doing well, as are service businesses. As a brand, you need a reason to exist. Our positioning is that Benefit is fun and makes customers laugh. You see our tagline—“Laughter is the best cosmetic”—all over our company. It’s the activities we do, such as emergency mascara technicians driving around during fashion week in New York providing emergency makeovers, or Beauty Boosts, which are cute compliments that a customer can receive every morning by saying, “Please send us a tweet,” and they get a compliment back. We’re always asking, How can we differentiate ourselves by making people smile or laugh? As you look in any industry, if you can differentiate yourself you can make a difference and have above-average results.

The other thing is services: With online as an alternative, people are looking for unique experiences. If you have a service element to your business, you can interact with your customer in a much higher way. We do that through brows. It creates a very loyal customer who keeps coming back, but also it’s just a really rich way to interact with your customer.

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The Laugh MasterFor Benefit Cosmetics’ Aurelian Lis, having fun is all in a day’s work. BY JENNY B. FINE PHOTOGRAPHED BY MICHAEL NAGLE

A graduate of Oxford and INSEAD, Aurelian Lis joined Benefit Cosmetics in 2010 as general manager of North America. Lis has a broad background, having worked at companies as

diverse as Unilever, where he focused on strategic, operational and sales capacities for brands including Elizabeth Arden, and Delia’s Corp., where he held the position of chief operating o!cer. Prior to joining Benefit, he founded Prescribed Solutions, a dermatological skin care brand which was acquired in 2009. Lis, who reports to Benefit ceo Jean-Andre Rougeot, was promoted to his current position overseeing North and South America in 2012.

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“We are spending so much time, literally, trying to make people laugh. It is an awesome job. And very motivating.”

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How is South America trending?

We are in three countries. The most established is Mexico, where we’re in Sephora and El Palacio de Hierro. We are in Chile with Falabella and in Brazil with Sephora. We don’t need to be in every store. We don’t want to be the biggest, we want to be the best. In any store where we are, we want to be, if not the top brand, in the top three. In South America we are doing that, especially in Mexico and Brazil. Our strategy is to keep moving forward in a way that we’re doing very well in small incremental units. Eventually they add up to a very substantial and impressive business. How do you see that business evolving over the next

five years?

We are anticipating rapid growth over the long run. The interesting thing about the South and Central American markets is what can you learn from those markets and bring back to the U.S. Is that because of the changing demographics of the

U.S. and what it means for your business here?

Yes. There are differing demographics here. We are interested in being exceptional in the places we’re at. We need to maintain that, whether the entire industry is going up 10 percent or is flat. That teaches you things that hopefully you can bring back. The Latina population is close to 20 percent of the U.S. We have wonderful products that work with all skin types, and as an organization, we’ve become a lot better and more inclusive of all segments of the market.There’s a perception that Benefit is product driven

and fix-it driven. Is that a fair assessment? How do

you fully realize all categories?

There is nothing wrong with having a good definition and people understanding what makes you different from other businesses. The way I would define our products is they are instant beauty solutions. [Our customer is] a young woman who is on her first or second job, in her late 20s maybe, very successful at work. She is working very hard, she gets to the end of the week, she’s got a date, and the fact that she’s been working hard shows. She needs a quick solution. In 10 minutes, we can make her look and feel fabulous. That is our positioning. Is it a fix-it positioning? Yes, although it may be more of a fake-it than fixing it. That is quite a broad positioning. It encompasses amazing concealers, great primers, even mascaras. The point is, they have to be simple, instant. There is usually a yuck-wow, so you can see a huge difference between before and after. And it works. Before Benefit, you founded a skin care line.

I did. It is called Prescribed Solutions Customized Skincare. It is a line of high-performance antiaging products sold through doctor’s offices that can be customized for different skin types. I started it with a business partner, David May. We built it from the beginning, where we were cutting the labels on my kitchen table and getting into doctor’s offices, all the way to about 500 offices when we sold it. Now it belongs to a company called Ferndale Labs, a Michigan-based pharmaceutical company.

How has your entrepreneurial experience informed

your present position?

As an entrepreneur, you are quite resource-constrained and you have a reasonably short time horizon, by comparison to large companies. At the same time, you have a lot of authority and you’re extremely nimble. The advantage of cutting labels on your kitchen table is you may need to change one of those labels. The next batch is changed. Some of our early brochures were printed on ink jet and we would literally go through a variety of versions with our first customers and tweak them and get them better and better and better. In big companies, you can’t do that.

What it comes down to is finding the trade off—trying to keep some of those positive aspects of entrepreneurship in a bigger company.

What motivates a lot of entrepreneurs—and certainly

did me—is the ability to own your own business, own your destiny and run with it, and make decisions you believe are best for the company and also make decisions that come out of your own pocketbook. LVMH, in general, and Benefit, in particular, are structured in a very entrepreneurial way, in that from a business perspective, people do own their own businesses. The U.S. owns the business of making sure the U.S. customer is delighted with the brand. What is it about beauty that attracts you so much?

I’ve got a quirky background. I studied physics. I was an engineer for a while. I worked in foods—in fats, oils, dressings, prepacked salads, even cheeses. I realized nobody wanted to talk to me when I was in the prepacked salad business. Nobody cared. People care about cosmetics. It’s about their identity. They care a huge amount what it’s going to look like on them, whether it works on them. It continues to be the motivating factor. The idea of having a customer that is so excited by what you do is a motivating thing. How would you describe your management style?

The important thing is to develop your team. I believe

that you work with your existing team and invest in your existing people. In a very short time, we doubled the business. Amazing success, but I’m even more proud that we did that with essentially the team that was there. We didn’t come in and change every senior manager position and do a total housecleaning. We tried to unleash the great ideas through the strengths people have. It’s more long term as well. I want people to be in the same company years from now. You need to take that long-term skill-building view to people. Everything else follows—you’ve got good people, they’re in it for the long term, they have authority.What’s the most difficult business decision

you’ve made?

Probably the decision to sell Prescribed Solutions. After you’ve developed and nurtured a business, it is your baby. You know everything about the brand—virtually every area was at some time your responsibility until you got large enough to be able to put people in place. Deciding to sell it was tough. It came when we realized that the only impediment to growth was increasing the size of our sales force. We were looking at some strategic partners who could do that and the partner we came across wanted to own it.

If I reflect back and ask, Was it a good move? Yes. The company continues to be successful. The difficulty

in selling was also because of the commitment to the people you made to get to where you were—the commitment to the employees

who you won over, got on board and believed in the dream you believed in. It’s also true for

the customers. Our second customer was Dr. Pat Wexler and she helped us a lot. I was very careful

when I sold it that the people who were buying it would uphold the importance of them and the

standards I believed they deserved. Fortunately they did.Do you see yourself starting something else

from scratch?

Yes. It’s motivating. It’s easier than people think, probably. It’s a huge amount of work. But it’s not as much about having the best idea. These things evolve. Good outcomes come through a very decent idea plus a lot of hard work, a lot of feedback and listening to the market. The impediment I often hear to starting something new is, “I haven’t had the most brilliant idea ever.” Yes, you need a decent idea, but it’s more about conviction. Are you willing to put the time in? Are you willing to question yourself? It’s always fun to leave open the possibility of starting something new. Having said that, Benefit has a huge way to go. We are just scratching the surface. What drives you?

We all work in the cosmetics industry, which is inherently frivolous by nature, but it makes a big impact on people’s lives. We are spending so much time, literally, trying to make people laugh. It is an awesome job. And very motivating. The creativity of the teams, whether it’s in packaging or promotions or events: You see it and get motivated for another day.

Benefit's whimsical

ethos.

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PleasureAPP: Jamie Oliver’s 20-Minute Meals BAKERY: Joan’s on ThirdI am obsessed with their French breakfast muffins, croissants and coconut cupcakes. 8350 West Third Street; 323-655-2285BAND: RadioheadBOOK: J.D. Salinger’s The Catcher In The Rye and Wine and War by Donald Kladstrup. CELEBRATION RESTAURANT: Osteria Mozza If I’m celebrating, it has to involve Nancy Silverton’s burrata with caviar, orecchiette with bread crumbs, affogato and a bottle of Vespa Bianco.

6602 Melrose Avenue; 323-297-0100CHAMPAGNE: Champagne Krug NV

for breakfast; Jacques Selosse Substance for later in the day.

CHOCOLATIER:

ChocoVivo A unique bean-to-bar concept where you can handcraft

your own pure chocolates.1617 Abbot Kinney Boulevard; 310-463-7878

CLOTHING STORE/EVENING: Maxfield on Melrose 8825 Melrose Avenue; 310-274-8800CLOTHING STORE/SHOES:

Saks Fifth Avenue 9634 Wilshire Boulevard; 310-275-4211CLOTHING STORE/WEEKEND:

Fred Segal on Melrose 8118 Melrose Avenue; 323-651-1800DINER: The Fountain Co!ee Room at Beverly Hills Hotel Epitome of Old Hollywood. I always run into friends at breakfast, and I love that you feel so pampered. No food request is ever denied! 9641 Sunset Boulevard; 310-281-2916FLORIST: Botany FlowersThe Brentwood Country Mart, 225 26th Street, Suite 41; 310-394-0358

Brooke WallAs founder and president of The Wall Group, Brooke Wall represents some of the world’s top hair, makeup and styling talent. No slouch in the chic department herself, the bicoastal beauty executive shares some of her favorite Los Angeles haunts.

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BROOKE WALL,founder and president, The Wall Group

BusinessAIRLINE: Virgin AmericaA modern, relaxed and friendly atmosphere where your pets can hang out at your feet. Feels like a living room in biz class!BUSINESS TRAVEL CITY: ParisI can work and play in the prettiest city on the planet, and I always love Karl’s surprise theme at the Chanel shows.CLOTHING STORE/BUSINESS: Barneys in Beverly HillsChrys Wong always helps me. She has a great eye and no-nonsense approach, which I appreciate since my time is limited.9570 Wilshire Boulevard; 310-276-4400DRY CLEANER: Brown’s CleanersPricey, but great attention to detail.1223 Montana Avenue; 310-451-8531MOBILE DEVICE: iPhone 5S and Blackberry BoldRESTAURANT FOR BUSINESS LUNCH: Chateau Marmont I love lunching in the garden and they have the best french fries in L.A.8221 Sunset Boulevard; 323-848-5908RESTAURANT FOR BUSINESS DINNER:

Tower Bar at Sunset Tower HotelCozy atmosphere, great view and I had my favorite dinner ever there with Catherine Deneuve (it was sorta business...)8353 West Sunset Boulevard; 323-654-7100

HIDEAWAY: San Ysidro Ranch I love staying in Jackie O’s honeymoon suite. 900 San Ysidro Lane, Santa Barbara; 805-565-1995STATIONER: Sugar Paper in the Brentwood Country Mart for invites, and Cartier in Beverly Hills for personal stationery.225 26th Street, Suite 27; 310-451-7870370 North Rodeo Drive; 310-275-4272VACATION SP OT: Castiglione del Bosco in Tuscany A 5,000 acre resort in the beautiful hills of Tuscany. The most impeccable rooms. Amazing cooking school, gorgeous winery and close to the sweet little town of Pienza. castiglionedelbosco.com

Health and BeautyDERMATOLOGIST: Dr. Raj Kanodia 414 North Camden Drive; 310-276-3106MANICURIST: April Foreman or Ashlie Johnson thewallgroup.comMASSEUSE: Karen Robinson310-383-5612TRAINER: Core Fusion at ExhaleFairmont Miramar Hotel, 101 Wilshire Boulevard; 310-319-3193

BOTANY FLOWERS SUNSET TOWER

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people in America believed it came from France,” says Pink.

The French Manicure got a boost from Hollywood once again when celebrities went on The Tonight Show Starring

Johnny Carson wearing it. Barbra Streisand was the first one to talk to Carson about the French Manicure and then came Cher. “I want to thank the movie industry. The French Manicure put Orly on the map,” says Pink. “When I made it, the only thing

I had on my mind was to make a living. I didn’t believe it was going to be as huge as it became.” —RACHEL BROWN

HISAYUKI SUEKAWA stepped down as president and chief executive o!cer of Shiseido Co. Ltd. in late March citing health reasons. Shiseido said that chairman SHINZO MAEDA would resume his role as president of the company as of April 1. Maeda was president and ceo prior to Suekawa’s appointment in January 2011...GEMMA LIONELLO has been named executive vice president and general merchandise manager of cosmetics at Nordstrom. She succeeds LAURIE BLACK, who is retiring after 35 years with the retailer....ANASTASIA C. AYALA has been named CEO of Nude Skincare, replacing ANNA

GHEE, who has left the company...CHRISTINE DAGOUSSET, currently executive vice president of fragrance and beauté at Chanel Inc. in the U.S. has been named as the successor to global president ANDREA D’AVACK. Dagousset will return to Paris by January 2014, working with D’Avack in a transition phase, before assuming the role in 2015....JULIE BORNSTEIN has been promoted to chief marketing and digital o!cer of Sephora, assuming the duties of SHARON ROTHSTEIN, who left the company to join Starbucks as global chief marketing o!cer.

The year was 1976. The United States celebrated its 200th anniversary; Steve Jobs and Steve Wozniak formed the Apple Computer Company and Nadia Comaneci flipped her way to three gold medals at the Summer Olympics in Montreal.

Beauty history was also made that year by Jeff Pink, who owned a small beauty supply store in Tarzana, Calif. and the previous year had created a nail brand called Orly. Concerned about a lack of foot traffic and in search of sales, Pink started calling everyone he could think of within a 25-mile or so radius—Hollywood studios, nail technicians and hair salons were at the top of his list—to ask them how he could satisfy their beauty needs. One film director did, indeed, have a nail dilemma. “In the movie industry at that time, they matched nail colors to dresses,” Pink recently recounts. “Every time a starlet was wearing a red dress, he had to put red nail polish on her. If the dress changed to purple, the color had to be changed. During the day, nail polish had to be changed three to four times,” he continues. “The director said to me, ‘I’m spending a minimum of three hours just to change nail colors and, for us, time is money.’”

Pink decided to solve the dilemma. In his store, he carried a white pencil which could be applied under the nails to make them appear clean. If he could jazz that up a bit, he might hit upon something usable for actresses’ nails no matter what color clothing they sported. Although his polish supplier thought Pink’s request was silly, Pink ordered a gallon of white nail lacquer, which he paired with a flesh-toned color and sold to the director. “Slowly, one director talked to another director, and they bought it from me,” said Pink.

As word spread, Pink packaged the white and flesh-colored nail lacquers together and dubbed the product the Natural Nail Look. He decided to bring the product to Paris, where he was doing the nails for the runway. On the flight home, he began to reconsider the underwhelming name, and switched it to French Manicure. “For many years,

ON THE MOVE

The French Manicure

My first job was at the local Orange County Chuck E. Cheese, where, costume and all, I dressed up as the mouse himself. I was 15 and wanted to get a job with my best friend—we were going to be like Laverne and Shirley. We interviewed together, but I got the job

and she didn’t. She laughed it off and didn’t care, but I was the one who was mad because we were supposed to do this together. Still, I took the position and had a short stint wearing the Chuck E. Cheese mouse costume.

A few days after I started, I was put on salad bar duty.

I found art in everything I did. I imagined the salad bar was like a Rose Parade float. I would create these beautiful vignettes with lettuce and vegetables.

I was there for only two weeks. I left to go work in a music store, where I could relish my creativity. You can’t have everything at 15, but that first job made me realize you have to pursue what you want to do.

This year, we’re celebrating Too Faced’s 15th anniversary. Since the beginning, I’ve aimed to create an environment where employees are heard, and feel they matter and make a real difference to the success of the company. But I must admit, I did take my salad bar duties a little too seriously.

Salad (Bar) Days

JERROD BLANDINO,Cofounder and Creative Director, Too Faced

Cher sporting the manicure she made famous.

A teenage Blandino.

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1976

GEMMA LIONELLO

ANASTASIA C. AYALA

CHRISTINE DAGOUSSET

Talk about a world view: While the Personal Care Product Council usually focuses on issues impacting the industry from the vantage point of Washington, D.C., this year’s annual meeting was considerably broader in scope. Topic number one: the harmonization of product and ingredient regulations around the world.

To that end, representatives from 11 industry trade organizations—including China, South Korea, Australia, Canada and the European Union—participated in the three-day event, held at The Breakers hotel in Palm Beach, Fla. PCPC chairman and chief executive o!cer of Elizabeth Arden E. Scott Beattie stressed the importance of the gathered representatives “working together to keep the industry strong and focused” to prevent “regulatory overreach” and e"ect “global harmonization e"orts.”

The message was well received by the 475 attendees, who included L’Oréal’s Karen Fondu, Procter & Gamble’s Patrice Louvet, Coty’s George Cleary, Shiseido’s Heidi Manheimer and Estée Lauder’s Thia Breen. “We can’t be in isolation,” said Breen. “There’s no turning back with this. It’s global.”

Multiple brands were also in attendance, on hand to meet with the many magazine publishers and editors who attend the meeting. Fresh’s Jean-Marc Plisson revealed plans for a new fragrance come September, while Sally Hansen showed a gel polish formula with glitter, also to be introduced in the fall.

12

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CORNER OFFICE

“We need to continue our collaboration with our colleagues abroad. The stakes are high. We are stronger with one voice.”

WWD BEAUTY INC

Jean-Marc Plisson

Heidi Manheimer

Patrice Louvet

Karen Fondu

Julie Strasser

Christophe de Villeplee

Thia Breen

Stephen DubnerMaria DempseyFabio Franchina

Julie Rollauer

George ClearyBob Phillips and Linda Marshall Elizabeth Musmanno

Cosimo Policastro

Lezlee Westine Bernard Cloetta Jerry Vittoria

E. Scott Beattie

Personal Care Products Council Annual MeetingFEB. 25-27, 2013

—E. SCOTT BEATTIE, PRESIDENT AND CEO, ELIZABETH ARDEN INC. AND CHAIRMAN OF PCPC

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BEAUTY BULLETINBEAUTY BULLETIN

POP ROCKSTop to

bottom: Clarins Crystal Lip Balm, $26;

Revlon Baby Stick for Lips & Cheeks, $8.99; NYX Butter Gloss,

$5; Estée Lauder Pure Color Sheer Rush Gloss, $24; Misslyn Hairlights Hair

Mascara, $10.50; Stila Countless Color Pigments, $22; Marc Jacobs Daisy Eau So

Fresh, $75; Blow Pro Smooth You Only Smoother Advanced Smoothing

Spray, $22; Natura Bisse C+C Vitamin Splash, $55.

When fashion brands

like Louis Vuitton and Versus conjured up a Sixties vibe for

spring, it seemed only fitting that beauty follow suit. To complement summer’s mod-

squad mood, brands like Marc Jacobs, Revlon, NYX and Esteé Lauder are ushering in pops of

orange-toned reds and pinks. “Orange has some of the same excitement that red has, but because of the yellow undertone, it has a bit of playfulness

as well,” says Leatrice Eiseman, executive director of the Pantone Color Institute. “But when you use these colors against

a dramatic contrast like black, it gives o! a psychedelic feel.”

—JAYME CYKPhotographed

by George Chinsee

Styled by Tyler Resty

16 WWD BEAUTY INC BEAUTY BULLETIN

GUERLAIN GLOSS D’ENFERInspired by the Sixties pin-up girl, this 20-shade gloss range contains an oil composition to moisturize and provide softness to lips. $30

ORIBE CÔTE D’AZUR HAIR REFRESHERThis mist contains Oribe’s signature complex of watermelon, lychee and edelweiss flower extracts to o!set odor, remove static and revive and invigorate hair. $22

VINCE CAMUTO FIORI Inspired by the delphiniums in Camuto’s own garden, this light summer scent opens with luscious pink grapefruit, with a heart of sheer iris and a base of rich sandalwood. $78

KATE SOMERVILLE SOMERVILLE360° TAN MAXIMIZER THE ENHANCING MOISTURIZER A blend of peptides, black snakeroot, rich oils and butters conditions and moisturizes skin to boost and extend the look of both natural and faux tans. $48

JIMMY CHOO FLASH Blending pink pepper amid jasmine and a base of heliotrope, the second fragrance from the luxury footwear brand is meant to evoke the excitement of getting ready for an evening out. $75

OPI BOND GIRLS LIQUID SANDWith shades named after some of the most iconic Bond girls, this six-piece collection features a matte lacquer formula infused with shimmer to impart the look of liquid sand. $9

NEST FRAGRANCES NEW YORK WHITE NARCISSE BODY & SOUL SPRAY Designed to evoke a field of white flowers, Nest’s newest scent layers top notes of white narcisse with a heart of French mimosa upon white sandalwood. $98

LANCÔME RÉNERGIE LIFT MULTI-ACTION REVIVA-CONCENTRATE INTENSE SKIN REVITALIZER Combining the skin-tightening technology of the Rénergie range with a pairing of biolipids and dipeptides, this gel-textured serum aims to lift, plump, firm and revitalize. $120

CLINIQUE MOISTURE SURGE CC CREAM Clinique’s six-shade ultra-hydrating CC cream contains advanced color-correcting technology to neutralize the complexion and make it appear even. $37

STRIVECTIN-EV GET EVEN DARK CIRCLE CORRECTOR StriVectin’s signature molecule, NIA-114, boosts the e"cacy of vitamin C and helps even out dark circles. After use, 90 percent of women saw dark circles lighten in 14 days. $59

PETER THOMAS ROTH CLINICAL SKIN CARE NEUROLIQUID VOLUFILL YOUTH SERUM Formulated with 19 amino acids, five peptides, three collagens and hyaluronic acid, this helps skin appear fuller. $120

Rounding up April’s most innovative products. BY JAYME CYK

What’s In StoreLAUNCH WINDOW

Celebrating 50 years of Bond Girls

Parlux builds on its

Vince Camuto franchise

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GIVENCHY GENTLEMEN ONLYActor Simon Baker fronts Givenchy’s new men’s scent, the brand’s third major pillar and most mainstream e!ort to date. Notes include green mandarin, vetiver and incense. $78

SLICK KICKOils continue to find a receptive audience among beauty consumers. This spring’s newest run the gamut from a dry oil for hair to a shimmering body version. “Oils have recently surged to become a major player in the U.S. skin-care market, and we think cleansing oils will be the next big thing,” says Priya Venkatesh, Sephora’s vice president of merchandising, skin care.

FIGHT THE BURNAccording to The NPD Group, in 2012, sales of skin care–sunscreen hybrids rose 7.7 percent.

The season’s newest sunscreens reflect that trend, featuring a panoply of antiaging

ingredients. La Mer’s new sun collection features marine peptides to firm skin, while Boscia uses

hyaluronic acid to help retain moisture.

YES TO CUCUMBERS Soothing Natural Sunscreen SPF 30, $11.99

ALTERNA BAMBOO Smooth Kéndi Dry Oil

Micro-Mist, $24PHYTO Subtil Elixir

Intense Nutrition Shine Oil, $38

MOROCCANOIL Shimmering Body Oil

Instant Radiance, $45BOOTS Botanics The

Power of Plants Facial Oil 100% Organic, $8.99

LA MER Soleil de la Mer The Reparative

Body Sun Lotion Broad Spectrum

SPF 30, $85

LA ROCHE-POSAY Laboratoire Dermatologique Anthelios 60 Ultra Light Sunscreen Fluid, $29.99

MURAD Essential-C Sun

Balm Broad Spectrum

SPF 35 PA+++, $25

Boscia Daily Defense Sunscreen Broad Spectrum SPF 50 PA+++, $36

Super shiny at Jil Sander.

Sam McKnight obliged Fendi designer Karl Lagerfeld's request for graphic hair with fox-fur Mohawks, custom-dyed for each model based on her hair color and head shape.

Moncler Gamme Rouge's Arctic odyssey featured polar bears, blizzards and gilded beauties, whose sun-swept cheeks and sculpted hair redefined the idea of ice princess.

As dense steam billowed out from one side of Rick Owens' runway, models emerged from the cloudlike wall with equally as voluminous hair. As WWD wrote, the look was "teased, tousled and often falling in front of the face for a visual that provided a heavenly touch to the clothes."

HAWK EYE

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SKY HIGH

Rick Owens

Fendi

Moncler Gamme Rouge

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WWD BEAUTY INC EYE CANDY 19

Haider Ackermann spoke about strength and fragility when describing his fall collection, but there was nothing dainty about the two-tone hairstyles sported by each model.

Wild, windswept-looking coifs were the perfect counterpart to Junya Watanabe's take on the biker jacket.

Luigi Murenu created tightly coiled "caps" of roses that complemented Givenchy's artful mix of aggression and romanticism.

The jeweled veils and ethereally glowing faces at Alexander McQueen perfectly complemented designer Sarah Burton's exquisite Elizabethan-inspired creations.

Alexander McQueen

Junya Watanabe

Haider Ackermann

As dense steam billowed out from one side of Rick Owens' runway, models emerged from the cloudlike wall with equally as voluminous hair. As WWD wrote, the look was "teased, tousled and often falling in front of the face for a visual that provided a heavenly touch to the clothes."

SENSATIONSSINGULAR

WARRIOR CHIC

ROSY OUTLOOK

FINEJEWELS

MOTORCYCLE MAMAS

SKY HIGH

LET OTHERS TAKE A MINIMALIST ROAD. FOR A HANDFUL OF DARING DESIGNERS, INDIVIDUALISTIC BEAUTY WAS THE NAME OF THE GAME DURING THE FALL COLLECTIONS.

Givenchy

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have been to the Walgreens on the corner of Sunset Boulevard and Vine Street in Hollywood twice. Once to behave like a “normal” shopper to assess the store for this story and another time for its opening party last December, where an unusual cadre of celebrities gathered to partake of the sushi that was being passed around to demonstrate just how different this Walgreens is from ordinary drugstores. But I have been to the site of the Walgreens on

many, many occasions. Before it was a Walgreens, it was a Borders, and for a very brief period, I lived in the Sunset + Vine apartments above that Borders. If I’m being candid, I was the least-cool resident of the complex. I lasted less than a year before jumping ship to a leafy neighborhood in family-friendly Culver City.

When I initially thought about Walgreens with a

Look Boutique, its upscale beauty concept, I figured it wouldn’t fit in either. The only other Look Boutique I had visited in California was at a store in Los Gatos, Calif., a tony Silicon Valley community filled with those who have discretionary income to burn on the likes of La Roche-Posay and Kinerase. While Hollywood isn’t for paupers—rents at Sunset + Vine rise above $2,000 a month—its household incomes don’t compare to the $210,000-plus in Los Gatos.

Could the Look Boutique make La Roche-Posay customers out of shoppers with Pond’s-size budgets?

In an attempt to answer that question, I enlisted a friend to come with me to the Walgreens on Sunset and Vine so I’d have a partner in crime with whom to evaluate the store. My friend is 35, and doing pretty well for herself in a finance job. She’s not afraid of

spending a pretty penny for something that really delights her, but she isn’t lavish. She had spent a year in England during college and had heard the new Walgreens had Boots No7, a brand she’d discovered there. (Walgreens took a stake in Alliance Boots last year, and Boots No7 made its Walgreens debut at the store.) She was curious about whether the store resembled Boots, and was also on the hunt for an orangey-red lipstick.

I prepared for our trip by downloading Walgreens’ app onto my iPhone. I was hoping I’d score some deals, so I scoured the available mobile coupons and signed up for deal-alert texts. I didn’t receive any texts in advance, but I had access to a mobile coupon for Yes To products. If there were something I was interested in from the Yes To line, I’d definitely try

20

CONSUMER CHRONICLES

I

WWD BEAUTY INC

UNDERCOVER SHOPPER

Tinseltown’s Newest Beauty DestinationWWD’s RACHEL BROWN heads to the heart of Hollywood, where Walgreens has opened its most ambitious beauty door to date.

Inside Walgreens’ new Los Angeles

flagship.

PHOTOGRAPHED BY STEFANIE KEENAN

that mobile coupon at the Walgreens’ cash register. We arrived at Walgreens at about 3 p.m. I

immediately noticed the patio outside with free Wi-Fi, where people sat working on laptops. It was almost as if I’d arrived at a Starbucks. Walking into the store was equally surprising. An employee greeted us at the door. In front was the bright and clean Look Boutique and to the right was a massive prepared-food area with everything from sushi to octopus salad. “This kind of feels like a fancy airport place,” my friend said, comparing it to duty-free.

Boots No7 occupies prime real estate at the entrance to the Look Boutique. Its black shelving contrasts with the largely white units elsewhere. It also has a cash wrap right next to it, which wasn’t staffed when we got there. We dove into the huge selection—about 270 products in approximately 30 feet of fixtures. I remembered a cream eye shadow I had bought back in 2007. I loved that shadow and had squeezed the tube to its bitter end. Despite the enormity of the selection here, I didn’t see it. I did find, however, Perfect Smoothing Eye Shadow in the same soft purple hue.

In my opinion, the Look Boutique’s greatest assets are its testers. Customers can test virtually every product. I shaded one eye with the Perfect Smoothing Eye Shadow and assessed myself. Sold! That was the beginning of our fun with testers. My friend set out to search for the orangey-red lipstick she’d spotted in an advertisement—the perfect moment for the on-staff beauty adviser to offer assistance. Unfamiliar with the makeup brands at the Look Boutique, which included Vera Moore, ’Tini Beauty, TheBalm, Pür Minerals and StudioMakeup, my friend jumped at the opportunity.

The brand-agnostic adviser plucked lipsticks from each line and tested them on her hand. Narrowing down the field, my friend brushed her lips with various choices. I thought a Vera Moore hit the mark, but my friend wasn’t satisfied—too orange. We abandoned the quest and browsed the rest of the assortment. I sprayed hair spray from B. The Product, which came out in a forceful stream. That caught my attention in a good way: The hair spray wasn’t going to get lost in the atmosphere. My friend scanned more brands she wasn’t previously aware of, Talika, SweetSpot Labs and GlamGlow among them. “How many people are going to come in here and buy this?” she wondered. “It’s hard enough in a beauty store.”

My friend zeroed in on acne-spot treatments, mulling a Vera Moore item when the sales assistant directed us to La Roche-Posay. As an aesthetician, she said she preferred skin-care treatments from skin-care brands. The extensive range of La Roche-Posay products was a little overwhelming. There were tons of items for sensitive skin, acne-prone skin, aging skin and so on. Where we should focus wasn’t clear. The

adviser suggested Effaclar Duo Acne Treatment. It seemed like a good product—we tested it, of course—but when we flipped over a white metal element that concealed the prices, the price was over $30(!).

I flipped over another of those metal elements on a different row of La Roche-Posay products: The majority were from $42.50 to $55. It became obvious why Walgreens covered the prices. They weren’t typical of drugstores. Perhaps sensing our sticker shock, the sales assistant told us that salicylic acid treatments were available in aisle three in the standard personal-care merchandise section. She wasn’t dismissive of our frugality in the least, and I was happy she didn’t give us a hard sell.

The regular beauty aisles were more crowded and had two beauty advisers. But after the Look Boutique, they were sort of uninspiring. With no testers, my

friend avoided the lipsticks because she had no desire to buy one that might not be the right shade. I explored the Yes To selection, putting the Eye Makeup Remover Pads on my to-get list.

We headed to the Boots No7 shelves again prior to finalizing our purchases, where a beauty adviser was now on duty. She handed us samples of Protect

& Perfect Intense Beauty Serum, which she said is clinically tested to reduce wrinkles. She didn’t have to do too much to persuade me. Out of all the Look Boutique brands, No7 was the most attractive to me. It wasn’t crazy expensive and, even though I hadn’t used it in forever, it is a trusted brand outside the U.S. and that gave me confidence.

There was a minor hiccup when we checked out. I hadn’t read the Yes To mobile coupon carefully enough, and it was for shampoo and conditioner. I wasn’t able to get a discount on the Eye Makeup Remover Pads, but I bought them regardless. In total, my friend and I spent roughly $130 on nine items. The next day, I received a deal alert via text to get $1 off Sally Hansen Salon Effects Real Nail Polish Strips. If I had gotten it when I was in the store, I would definitely have bought them. But based on this experience, I’ll be back. I guess you can go home again.

21

THE FACTS

WWD BEAUTY INC

Considered Walgreen’s flagship in Los Angeles and located in the heart of Hollywood, this is store number 8,000 for the retailer. The site is full of history—it once housed the legendary Schwab’s Pharmacy, where Lana Turner was discovered. Measuring 23,500 square feet, the store features unusual drugstore amenities like a sushi bar, smoothie station and more than 700 fine wines. Beauty is well represented, too: The Look Boutique occupies about 1,700 square feet, including prime space for Boots No7.

Walgreens Sunset + Vine

1501 Vine Street

323-467-7916

walgreens.com

@Walgreens

“The Look Boutique’s greatest

assets are its testers. Customers can

test virtually every product.”

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The Euro E!ectWhile U.S. prestige sales outpaced Europe in 2012, the slowdown abroad has implications here.

22 CONSUMER CHRONICLES WWD BEAUTY INC

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restige beauty turned in a stellar performance in the U.S. in 2012, increasing 7 percent to $10.2 billion. Elsewhere, though, as figures provided by The NPD Group show, the picture wasn’t quite as rosy.

“There are two realities,” says NPD’s vice president and global industry analyst, Karen Grant. “The U.S. reality and everyone else.” Although the U.K. had positive results, posting growth of 5 percent, sales in France, Italy and Spain were down. Of course, such figures make sense in light of the economic woes of each country, but their portent hits closer to home. “While we talk about the U.S. doing well, it is a cautionary tale to watch, because we’re beginning to see some slowdown here,” says Grant. “We saw it in the second half and heading into 2013. We’re still positive, but the results in Europe indicate that we might start to feel some of that headwind coming our way. We are going to have to work hard to keep this growth going.”

A category that is particularly challenging in Europe is prestige skin care. While it continues to be vibrant in the U.S., the retail dynamic abroad is very different, where shoppers are opting more for mass market, pharmacy and monobrands such as Caudalie at one end of the spectrum or superluxe at the other, leaving traditional prestige department-store brands challenged. “Prestige brands have a great positioning in the U.S. and the mass market is very different,” says Grant, “but similar dynamics can happen here. Think about the merger between Walgreens and Boots,” she continues. “We can’t think that what happens in Europe can’t happen here. You have to keep fine tuning and recognizing that the competition may be very different going forward.”

Consequently, says Grant, marketers have to be more proactive than ever before if they hope to win in the future. “We have to fight for everything we can get,” says Grant. “We can’t just accept things are challenging and take it lying down. You have to look for opportunity.”

U.S / EUROPE PRESTIGE BEAUTY GROWTH SIZE AND PERFORMANCE

PERCENTAGE OF SALES BY CATEGORY

CATEGORY RESULTS BY COUNTRY

PU.S. $10.2 Billion +7%

U.K. $3.4 Billion +5%

France $3.5 Billion -1%

Italy $2.2 Billion -4%

Spain $1.6 Billion -7%

Source: The NDP Group

Source: The NDP Group

+7%

+10%

+7%

+5%

-1%

flat

-1%

-1%

+5%

+5%

+11%

+3%

-4%

-6%

flat

-3%

-7%

-7%

-9%

-6%

Source: The NDP Group

SKIN CARE

MAKEUP

FRAGRANCE

TOTAL

SKIN CARE

MAKEUP

FRAGRANCE

U.S. FRANCE U.K. ITALY SPAIN

U.S. FRANCE U.K. ITALY SPAIN

34%19% 22% 32% 30%

16%

54%

24%

44%

23%

55%

14%

67%

37%

29%

WWD.COM/BEAUTYSUMMIT

TO ATTEND: kim_mancuso@fairchildfashion.com, 212.630.4212 TO SPONSOR: kristin_mcfadden@fairchildfashion.com, 212.630.4425

I N S I G H T & I N N O V AT I O NMAY 21-22//NEW YORK

S U M M I T 2 0 1 3

BEAUTY

SPONSORED BY

CAROL HAMILTON

L’ORÉAL USA

DEB HENRETTA

P&G BEAUTY & GROOMING

LEONARD A . L AUDER

THE ESTÉE LAUDER

COMPANIES INC.

TINA ALSTER M.D., WASHINGTON INSTITUTE OF

DERMATOLOGIC LASER SURGERY

ORNELL A BARRA, ALLIANCE BOOTS

DREW BARRYMORE, FLOWER

MARL A MALCOLM BECK, BLUE MERCURY

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FANG HUA, SHANGHAI JAHWA UNITED CO. LTD.

ALIZA JABÈS, NUXE GROUP

IAN GINSBERG

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JULIA GOLDIN

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LINDA WELLS, ALLURECHRISTOPHER WEST, MARVIN TRAUB ASSOCIATES

WENDY ZOMNIR, URBAN DECAY

ADDIT IONAL SPEAKERS INCLUDE :

With her kit in tow, ABC makeup artist Lisa Hayes stopped at Ricky’s to pick up a few essentials before work. Citing Urban Decay, Giorgio Armani, Nars and Yves Saint Laurent as her go-to brands, the 28-year-old spends around $15,000 annually on beauty products. “It’s more than the average person, but that’s because I’m working on TV everyday,” says Hayes. “I’m constantly purchasing new products for my clients.” Once a month, Hayes likes to shop various stores to see what’s new. “I love to experiment with new products,” says Hayes, “because not one line has it all and things work differently on different people.” When it comes to her own morning regimen, Hayes keeps it simple. “Just Giorgio Armani foundation,” she says. “I have to be at work at 5 a.m., so that’s it for me.”

SHO

PPER

PH

OTO

S BY

JOH

N A

QU

INO

; PRO

DUCT

S BY

GEO

RGE

CHIN

SEE

24 WWD BEAUTY INC

Before a trip to Miami, Erica Shimon, 31, headed to Blue Mercury to stock up on sunscreen and skin care and purchase an M-61 eye cream she had been given a sample of the last time she was in. “They’re very personable here,” says Shimon. “Sometimes when I go to other stores, they don’t really know what they’re talking about, but here they seem really trained on the merchandise.” No stranger to beauty, the freelance makeup artist spends $3,000 to $5,000 annually on beauty products. When she’s shopping, Shimon likes to use phone apps like Pop Sugar and Beautylish to guide her to new products and stores. But the beauty junkie is not so keen on reading product reviews. “I used to, but not so much anymore,” she admits. “I realized that a lot of them were off. Maybe it’s because I’m in the industry.”

*Pretax totals

CONSUMER CHRONICLES

$94.94*

TOTAL SPENT$699.50*

TOTAL SPENTUPPER WEST SIDE

LAUNCH WINDOW

What’s in Erica’s Bag?What’s in Lisa’s Bag?

SHOPPER: Lisa HayesDATE/TIME: 3.12.2013, 2:20 p.m.STORE: Ricky’s LOCATION: 472 Columbus Avenue,New York, N.Y.

SHOPPER: Erica ShimonDATE/TIME: 3.12.2013, 1:15 p.m.STORE: Blue MercuryLOCATION: 2305 Broadway, New York, N.Y.

RICKYCARE APPLICATORS,$4

“I never use a brush directly on

somebody’s lips,” says Hayes.

SKINCEUTICALS PHYSICAL FUSION UV DEFENSE SUNSCREEN BROAD SPECTRUM SPF 50, $32“It’s really light,” she says, “but whenever I use this I don’t burn.”

M-61 POWERFUL SKINCARE HYDRABOOST EYE HYDRATING PEPTIDE AND VITAMIN B5 EYE CREAM, $78

KIEHL’S POWERFUL WRINKLE REDUCING CREAM,

$52 Shimon wanted a preventative cream and

liked the addition of SPF.

KATE SPADE NEW YORK

HENRIETTAMAKEUP C ASE,$60

DR. DENNIS GROSS SKIN

CARE ALPHA BETA GLOW PAD

FOR BODY, $18 Shimon says

these give her skin an even

tan while simulataneously

exfoliating.

RÉVIVEMOISTURIZING

RENEWAL CREAM, $175

CREED MILLÉSIME IMPÉRIAL, $155“It’s not too sweet and kind of woodsy,” says Shimon.

TRISH McEVOYFLAWLESS

LIP COLOR IN SEDUCTION, $28.50

“I’m really into a nude pink lip,”

says Shimon.

REN CLEAN SKINCARE GLYCOL LACTIC RADIANCE RENEWAL MASK, $55 Shimon uses this twice a week to keep her skin smooth.

YU BE MOISTURIZING SKIN CREAM CONCENTRATED GLYCERIN FORMULA,

$15.99 Depending on their skin type, Hayes applies this cream to her

clients before makeup.

YU-BE LIP THERAPY, $5.99

“This lip conditioner has

an aromatherapy smell that I love,”

says Hayes.

STILA ALL IS BRIGHT LIP GLAZE

SET, $25 “It’s a great deal

because you get so many lip

glosses for a good price and

range of colors,” says Hayes.

EO GEL HAND SANITIZER IN LAVENDER, $4.99

Hayes says the lavender scent helps clients relax.

CINEMA SECRETS PROFESSIONAL BRUSH CLEANER, $14.99 Hayes likes this because it disinfects and conditions.

KHROMA BEAUTY K24 PRIME GOLDEN MAKEUP PRIMING GELÉE, $14.99 Hayes heard the Kardashians talking about this on E! News and wanted to try it.

ALMAY MOISTURIZING EYE MAKEUP REMOVER PADS, $8.99“These take o! the makeup right away,” says Hayes. “Sometimes, when it’s too moisturizing it can burn the eye, but this leaves no residue.”

KIEHL’S MIDNIGHT RECOVERY

CONCENTRATE, $46“I like that it’s not

so expensive,” says Shimon.

Recognizing Excellencein Luxury ServiceMEET COLLEEN HOVSEPIAN YVES SAINT LAURENT BUSINESS MANAGER NEIMAN MARCUS, SAN FRANCISCO

“Listening equals respect. Being honest equals integrity.”

WHAT INSPIRED YOU TO GET INTO THE BEAUTY BUSINESS?I have a passion for artistry. I like to delight my clients.

ANY ADVICE ON BUILDING RELATIONSHIPSWITH YOUR CLIENTS?Listen. Really listen. Everybody has wants, needs and desires. By listening, I try to fulfi ll that. Listening equals respect. Being honest equals integrity.

WHAT ADVICE WOULD YOU OFFER AN ASPIRINGMAKEUP ARTIST?Defi ne your style. And be nice to everybody. You don’t know what people’s back-stories are, so be kind, be compassionate, do your best and always be honest.

WHO WERE YOUR MENTORS?Wade Bandy was an inspiration for his clean look. And with Kevyn Aucoin, I learned the very fi rst smoky eye.

WHAT ARE YOUR CAREER ASPIRATIONS? I would love to be a National Artist and to create color.

WHAT ARE SOME OF YOUR FAVORITE BEAUTY PRODUCTS?My utmost favorite is Forever Youth Liberator Serum. When I fi rst tried it, my best friend thought I’d had an injection of something. And I do love Touche Éclat, the glossy lip stains, and the Temps Majeur Eye Cream.

HOW WOULD YOU DEFINE BEAUTY?Beauty is uniqueness. All people’s beauty is defi ned by their uniqueness.

DO YOU HAVE A CLIENT EXPERIENCE THAT WAS ESPECIALLY MEMORABLE?A woman stopped in just for a Touche Éclat. I asked if I could put ona little eye cream and she said, “Don’t you try to sell me!” Then when I slipped her the mirror, she noticed her puffi ness was gone. She instantly said, “I’ll take them both!” It was funny.

Colleen Hovsepian has provided outstanding service to Yves Saint Laurent clients at Neiman Marcus, San Francisco, for eleven years.

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26 WWD BEAUTY INC

ess than a minute into a half-hour infomercial for Miracle Skin Transformer, a persuasive male voice intones: “Customers of Sephora, the top retailer in the world, have given Miracle Skin Transformer gold-star status.” Three min-utes later, the audience is introduced to brand founder Sarah McNamara as she’s speaking to customers inside a Sephora.

“That is the first time a retailer has ever partnered with an in-fomercial and, obviously, Sephora is thrilled because they are be-ing mentioned on an infomercial,” says McNamara. However, she adds, “Sephora doesn’t think they are in an infomercial. Sephora thinks they are in a beauty ad.”

“As seen on TV” is becoming as seen, well, everywhere. Once considered a seedy vehicle for hucksters peddling kitchen gadgets and exercise gizmos, beauty marketers like Guthy-Renker, Bare Escentuals, Murad, Philosophy and Mally Beauty have legitimized direct-response television (DRTV) as a sales channel. Prestige re-

tailers and brands have taken notice, and the beauty infomercial business is booming.

As with most gold rushes, those that strike it rich are few. Info-mercials have unique financial dynamics that outsiders frequently can’t make sense of no matter how much they pay for TV time. (Olay, Clinique and Neutrogena have all experienced how tough it can be to crack the code.) Even for infomercial specialists, the financial picture isn’t as rosy as it once was. The digital revolution makes getting a sale over the phone—DRTV’s historical bread and butter—harder and harder, while media costs are poised to rise and competition is fierce.

Still, the cash is flowing. Multichannel marketing-analysis firm Marketsmith Inc. reported that spending on long-form or 28-minute, 30-second beauty infomercials that run in the late night or earlier morning hours when there’s little else on TV in-creased 47 percent to more than $174 million in 2012 year-over-year, with almost 60 new beauty infomercials launched. In Janu-ary of this year, spending on long-form beauty direct-response

THE INFOMERCIAL BUSINESS IS BOOMING, WITH

THE INDUSTRY’S GIANTS SOLIDIFYING THEIR POSITIONS AS NEW

POWER PLAYERS TRY TO ANGLE THEIR WAY ONTO THE AIRWAVES.

BY RACHEL BROWN / ILLUSTRATED BY JOSUE EVILLA

SMALL SCREEN

DREAMS

L

28 WWD BEAUTY INC

television ads climbed 38 percent compared to last year. Short-form infomercials have seen massive growth, too. According to data pro-

vided by Kantar Media to Response Magazine, spending on the 30-second, 60-sec-ond, two-minute, three-minute and five-minute spots that air throughout the day totaled nearly $1.8 billion during the first three quarters of last year. Although the fourth-quarter numbers weren’t out before WWD Beauty Inc went to press, if the spending trends continued, 2012 would mark the most spending on short-form infomercials since the 2008 economic crash.

“The economy is growing. Our current advertisers are continuing to spend—they are introducing new products and supporting them—and we are getting interest from advertisers who may not have been in DRTV before,” says Steve Miller, senior vice president at short-form DRTV media agency A. Eicoff & Co. The agency cited Kantar Media informa-tion to summarize the skyrocketing spending on two-minute short-form spots: It jumped 117 percent from $638 million in 2007 to $1.39 billion in 2012.

On the consumer end, shopping via DRTV is incred-ibly popular. Eicoff collected data from Experian Mar-keting Services’ Simmons National Consumer Study that found TV orders from online, phone and catalog sources rose 17 percent from spring 2011 to spring 2012 and 30 percent from spring 2006 to spring 2012. Consumers spending more than $1,000 annually as a direct result of TV ads increased 26 percent between spring 2006 and spring 2012. During the same peri-od, there was a 35 percent increase in consumers who spent $150 to $199 annually and a 5 percent decrease in those spending less than $50 per year.

Beauty is by far the biggest category in direct re-sponse. In the third quarter of 2012 alone, Kantar Media figures show nearly $621 million was funneled into short-form drug and toiletry spots. The category in second place was household, furniture and appli-ances with a comparatively meager $107 million in spending. In long form, Monica C. Smith, president and chief executive officer of Marketsmith, estimates there are 15 major beauty players spending a total of $2 million a week on infomercials to reach women primarily 15 to 55 years old. By all accounts, it takes outlays of at least $75,000 to $100,000 weekly to make the top-25 list of direct-response spenders.

The money keeps on piling up. Guthy-Renker, the largest direct-response com-pany with some $1.5 billion in annual sales, predicts its media budget will esca-late this year, according to cofounder Greg Renker. (To give an insight into Guthy-Renker’s girth, Kantar reports that the company shelled out almost $69 million on Proactiv Solution short-form spots in the third quarter, exceeded only by varicose veins remedy Livariz’s $70.6 million spend.)

There’s no shortage of entrants into the direct-response space. In February, Mar-ketsmith reports that there were nine fresh shows, including relatively new en-trants like MaxiLift, ElevenSkin and Elastin 3 in antiaging, Color Recover in hair color and Haute Polish in nail. Smith says, “This space is going to explode even more with the consumer product giant entrants. This trend will not go down. You will see more entrants in the marketplace than ever before.”

Granted, the lure of the infomercial is strong. But while they can be unbeliev-ably lucrative, the hurdles are high. The industry standard is that eight out of 10 infomercials bomb, a ratio that has remained the same despite the fact that every-one in the business knows the components of a winning infomercial: an efficacious product that creates a change, before-and-after images that capture that change, compelling testimonials, a captivating founder and perhaps a celebrity or two for good measure, a broad potential customer base, an offer that customers perceive as having value, and sizable margins. (In ballpark terms, margins on beauty infomer-cial products can be as much as 70 percent or as low as 30 percent.)

“If Johnson & Johnson or Proctor & Gamble said to us, ‘You can have the keys to the candy store. We want you to start marketing our products,’ our first questions

would be: Who is the creator of the product and what is their vision? Why did they want to sell [their product?]” says Renker. “That’s the art of what we do.”

“If your product shows before-and-afters and you have great testimonials, that is where you have had success on infomercials. If you don’t have that, this is not your venue for selling,” says Kathy Fields, who, with fellow dermatologist Katie Rodan, developed Proactiv. “We are the acne queens. So, pimple, then no pimple is a great before-and-after.” Rodan adds, “The ingredient that made Proactiv so spectacularly successful was that the brand served a need, not a want. Having a product that is a needed product and not something that is just desired is critical for success.”

Rodan and Fields make it sound simple, but the process of developing an effec-tive infomercial can be onerous. Atlantic Coast Media Group, marketer of Hydrox-

atone, Keranique and Sarah McNamara Beauty New York, spends $200,000 to $300,000 to pro-duce an infomercial, which is on the low end of a cost spectrum that ceo and founder Tom Shipley says is usually around $700,000 to $750,000, but can shoot up to $3 million to $5 million.

To begin, Atlantic Coast will test four or five dif-ferent infomercial scripts to start. “Our goal within the first couple months is to find one or two win-ning concepts and then increase the media spend to see if they have legs,” Shipley says. The company often starts on radio before heading to TV; on aver-age, one out of 20 radio scripts is successful. When those successful radio scripts are translated for short-form TV spots, one out of three are success-ful. “Typically, we are looking for a profit target. We are looking for a minimum rate of return of 25 per-cent on our media investment,” says Shipley.

ROI is commonly understood, but the indicators DRTV experts use to analyze infomercial success are decidedly not. A key indicator is the media-efficiency rate or MER. The MER is the return on a dollar of media spending from the initial order. For example, a .4 MER means an infomercial mar-keter is generating 40 cents immediately when a customer purchases a product for every dollar spent on media. Other important indicators in the financial equation include the cost per order, which covers the cost of acquiring a customer, and the lifetime value of a customer, which factors in the additional revenue from future orders if customers are put on continuity programs.

Tony Besasie, president of media agency Cannella Response Television, points to an MER of 2 as the “fundamental benchmark” of infomercial success. “If you spend $100,000 on media a month, you should expect to see $200,000 in sales that month,” he says. That’s a terrific goal, but Kevin Appelbaum, president and ceo of Tria, says an average beauty infomercial probably generates an MER of .5 or .6.

Infomercial beauty marketers are discovering the MERs of yesteryear aren’t being replicated. “The media environment is now very competitive with increasing rates and decreasing inventory,” says Marina Randolph, executive vice president of direct at Murad. “Beauty infomercials are lucky to get an MER of 1.0 today on the front end.”

With the economy improving, media rates are expected to stay the same or rise. “Rates are a condition of the economic factors of the marketplace,” says Besasie. “If consumers aren’t ordering and consumer confidence is low, the rates need to come down. If consumers are ordering, then there is a demand for media, and rates will increase.”

Throw paychecks for celebrities into the mix and the road to profitability be-comes more arduous. But it’s hard to unearth a DRTV executive who makes the case against celebrities. Fields calls celebrities “channel stoppers.” “Celebrity still works,” she says. It only takes a few minutes of watching Guthy-Renker’s Mean-ingful Beauty infomercial to gauge the importance of star power: Cindy Crawford, Debra Messing and Valerie Bertinelli all make appearances in the opening minutes.

Social media has further increased the value of star power. Although social media is responsible for a tiny fraction of sales—Smith estimates only 3 to 5 percent for

“WHO IS THE CREATOR OF

THE PRODUCT AND WHAT IS

THEIR VISION? THAT IS THE

ART OF WHAT WE DO.”

29 WWD BEAUTY INC

long-form DRTV infomercials—the audience is crucial to building brand aware-ness. The Twitter audiences of the musicians Guthy-Renker has signed up as Pro-activ spokespeople speak volumes. Justin Bieber has 36.5 million Twitter followers, Katy Perry has 34 million and Adam Levine has nearly 4 million.

Celebrities or no, the profitability of infomercials can ebb if they are on air for prolonged periods. The industry norm is to refresh the creative content about every year and a half. Additionally, if they had the category to themselves when they launched, success attracts competitors quickly (see Bare Escentuals, which is thought by sources to have generated MERs of up to 4 with its initial infomercials, but is far from hitting those numbers of late. Bare Escentuals declined to comment for this story). Ultimately, there may be a point at which an infomercial has touched as many customers as it is probably going to.

The No!No! hair-removal device is a high MER holdout so far. Dolev Rafaeli, president and ceo of parent company PhotoMedex Inc., says its infomercials have maintained an MER of 3.5 since it launched in DRTV in 2008. The company spends about $1 million a week in advertising and has spent about $150 million over the last three years. No!No! requires a towering MER to make its infomercials profitable because it doesn’t rely on additional lifetime value. If an initial purchase is $89.95 plus $14.95 in shipping and handling, that $104.90 is probably all the product is generating in revenues on a majority of customers.

In contrast, sources say that Guthy-Renker’s Proactiv relies on smaller MERs of roughly .6 to .8, but makes its infomercials work based on the lifetime value. Renker breaks down the MER situation by talking about Perricone MD’s Cold Plasma Sub-D jawline, chin and neck products. Guthy-Renker offers two different collections of the antiaging products at $49.95 and $79.95 per month versus $19.95 for its Pro-activ system. “We are taking in more dollars per order [for Sub-D] and therefore we can afford to take in less reorder in the aggregate. On Proactiv, we take in less dollars and, therefore, we need more reorder,” he says.

Not too many marketers have mastered the reorder portion of the business. “The infomercial industry in general focuses too much on acquiring a customer and not enough sophistication is happening retaining a customer,” says Ran-dolph. “A lot of people may offer some small additional benefits, but no one has invested a lot on retention.”

Smith says most people pay for an infomercial product an average of 1.3 turns. “It is between that second and third package where most people drop off,” she says. “A good rule of thumb is that 70 percent of the people will cancel after the first leg and then 30 percent fall off every leg after that.”

The reliance on reorders is partly why skin care is such a sweet spot. Compared to other categories, customers are willing to pay a premium for treatment products and stay loyal to them longer, which ratchets up the lifetime values commanded from infomercials. Many marketers also contend that it’s difficult to starkly present the benefits of hair-care products on air. Hair regrowth is an exception and, appar-ently, so is Guthy-Renker’s Wen line, which Renker says shot from no infomercial sales to $200 million in sales in just 24 months.

“Hair is a commodity. People look at it differently,” says Hillary Solomon, presi-dent and ceo of Ouidad Holdings Inc. “You have to make sure that when you are putting together a show, the viewer is going to say, ‘Wow, this is unique. This is different.’ There has to be a high perceived value. A shampoo and a conditioner would probably be a challenge because it is nothing unique. Wen has had such wild success because they took a commodity category, and they added that never-been-done-before wow factor that really created a lot of value for the customer.”

It’s not just categories that are evolving. The infomercial channel is much more multiplatform than in the past. “For 2013, the name of the game is a more hybrid campaign,” says Murad’s Randolph. “We spent 2012 measuring cross-channel im-pact. This is the year where we are going to integrate cross-channel promotions, including short-form campaigns, national print media, digital advertising, retail support, QVC, social media and e-mail marketing.”

Overall, there has been a surge in online ordering, which accounts for approxi-mately 40 to 60 percent of sales. On the plus side, such orders are cheaper because marketers don’t have to pay for people to answer phones. The downside is that con-

version rates from calls can be as high as 65 to 75 percent, while online conversion rates are generally 20 percent or less. Moreover, it’s tricky to tie online customers to specific infomercials, making gauging their success challenging.

“The 800 number is headed toward antiquity. Every year, we get fewer and fewer 800-number sales,” laments Renker, who continues, “We control over 10,000 800 numbers, and every 800 number is trackable. We know what TV station caused which sale. The problem with online is we don’t know what TV station caused that sale. We become like a retailer that doesn’t know where a sale comes from. The whole DNA of our business is measurable performance for our ads.”

While Guthy-Renker is investing heavily to snag customers online, the primary strategy is aimed at older consumers who are more likely to remain loyal to the TV medium. “We are going to skew older in our demographic because I think women beauty buyers have more extra income past the age of 50, more willingness to spend greater dollars, TV habits reasonably similar to what they had before and, if you look at the bell curve, that’s where the people are,” says Renker. “I’m not going to go for the 20 year old.”

he mind-set towards traditional retailers has shifted, too. Sephora, for instance, stocks Murad, Tria, Ouidad, bareMiner-als and Kate Somerville, all brands that have infomercials. Even Guthy-Renker, which has largely avoided retail, is testing Wen at Sephora. “We want to be more channel agnostic,” says Randolph. “We want to be where the customer wants to shop.” Later this

year, Murad will promote its availability at retail via its short-form infomercials. “Right now, our infomercials sway against getting it in the store because we want the urgency to buy now,” says Randolph. “It is still a higher margin for us to ac-quire a customer through DR than it is through the store.”

But the math can work in the favor of a brand. Smith estimates that for a single DRTV order, infomercial marketers generate three to five retail orders, because it creates brand awareness and education and subsidizes advertising. In a survey of people who watched Murad’s Resurgence infomercial, 58 percent said they would buy it in the store. “There is still a large percentage of people that will never buy on an infomercial because they want to touch and feel a product, and partly be-cause they don’t want to be on auto delivery,” says Randolph.

Rafaeli has experienced how distinct retail can be from infomercials. Three years ago, he recounts that No!No! entered around 110 Showcase stores in Canada priced about $45 more than the infomercial price, and became a hot seller in the stores. “That is mind boggling to us,” he says. “We did some consumer surveys. The rea-son is that people see it on TV, but they don’t buy it on TV. When they see it in the store, they buy it,” he continues. “Direct response accounts for a third of our sales. Indirectly, we think it accounts for everything. By being such a big advertiser, we communicate with retailers.”

Still, Renker maintains that excessive retail exposure is bad for a DRTV brand. It can devalue the brand as customers hunt for sales, and can blunt the urgency to pick up the phone that marketers are attempting to foster. “I don’t think there is a brand on DRTV that has been around as long as Proactiv, and that is all because it has never been at retail,” he says. “When a brand is overexposed at retail, it is dead on TV.”

The Art—and Science—of the InfomercialHigh Ratings: Spending on infomericals has increased exponentially, up 47 percent last year and 38 percent thus far this year.Clear Parameters: The factors that contribute to success are well-known, including an e!cacious product, arresting before-and-after pictures and a compelling founder and backstory.Star Power: Celebrities, called “channel stoppers,” are often enlisted as well, thanks to their instant appeal with viewers.Changing Channels: Once relatively insular, infomerical brands are increasingly omnichannel, as marketers work to harmonize on-air, online and brick and mortar.Broadening the Reach: The success of Wen hair care has marketers looking beyond skin.

T

MAXIMUM

VOLUMEHair by Dennis

DeVoy for Art Department; makeup

by Kaoru Okubo for Management Artists.

Styled by Ada Kokosar at Artlist.

Model: Carola Remer at One Management.

MAXIMUM

VOLUMEHair by Dennis

DeVoy for Art Department; makeup

by Kaoru Okubo for Management Artists.

Styled by Ada Kokosar at Artlist.

Model: Carola Remer at One Management.

HAIR CARE’S MOST

SAVVY MARKETERS ARE

CREATING MULTISTEP

REGIMENS IN AN EFFORT

TO ENTICE CONSUMERS

INTO SPENDING BIGGER

BUCKS ON THEIR

CROWNING GLORY.

BY MOLLY PRIOR

PHOTOGRAPHED BY JONAS BRESNAN

nated by monolithic megabrands that offered something for everyone. We believe that time has passed. Instead, consumers are looking for expert brands with cus-tomized solutions and ranges that address their unique needs.”

The steady flow of new launches in the last 12 months—Pantene Expert Collec-tion, L’Oréal Paris Advanced Hair Care and Clear Scalp and Hair Beauty Therapy included—has transformed the mass-market hair-care aisle, and the hair-care benefits it trumpets. Over the last year, antiaging, scalp health and natural curl have emerged as leading trends, upstaging broader concerns like shiny, healthy hair. The trends mirror a changing consumer demographic, as both aging and more ethnically diverse populations wield more spending power.

Category growth has begun to respond, albeit modestly: Last year, hair-care sales grew 3 percent to $8.4 billion across all channels, excluding salons, accord-ing to Euromonitor International. The antiaging lines—which feature a bevy of speciality products, such as oils, volumizing powders and masks—are helping to drive growth, says Tim Barrett, U.S. research associate at Euromonitor.

“Increasingly hair consumers are becoming more sophisticated and under-standing that products work as a regimen of wash, care and treatment and they are willing to invest,” says Boswell. That insight prompted Unilever to significant-ly broaden its portfolio over the last three years, she adds.

Currently, Unilever is working to encourage regimen-building with new offer-ings, such as Clear Scalp and Hair Beauty Therapy, Suave Professionals Keratin Infusion and Nexxus Youth Renewal, an antiaging line that offers the brand’s first dry shampoo, as well as the Rejuvenating Elixir treatment. Boswell says the new launches “have been winning in the market, and driving more than 50 percent of the category’s total growth in 2012.”

mass-market hair-care brands have their way, shower shelves may soon get a lot more crowded.

The industry is out to convince women to add more steps to their two-part hair-care routine, a strategy that could dramatically boost category growth beyond its current rate of low-single digits. The move is borrowed from skin care’s playbook, designed to educate shoppers that a regimen will yield optimal results. It’s also an at-tempt to reclaim ground from salon brands, which have increasingly proliferated in the mass channel.

“Consumers are starting to understand the treatment process for hair,” says Shannon Curtin, divisional vice president and general merchandising manager for beau-ty, personal care and seasonal at Walgreens. “Premium, salon-inspired items are having great growth,” she adds, naming Pantene Expert Collection and L’Oréal Paris Ad-vanced Haircare in particular. “Customers are looking for an affordable solution to salon trends.”

To that end, hair-care brands are developing an onslaught of niche, salon-inspired lines tailored to specific needs in a concerted effort to move away from a one-size-fits-all approach.

“The hair-care market is undergoing a massive, long-term transition,” says Gina Boswell, executive vice president, personal care, for North America at Unilever, which has a portfolio that includes Nexxus, Suave, TRESemmé, Dove and Clear Scalp & Hair Beauty Therapy, among others. “In years past, the category was domi-

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(1) ROWENTA The German brand will soon bring its high-tech beauty tools—complete with all sorts of bells and whistles—to U.S. soil. Of note: the Curl Active Iron, which has a motorized, self-spinning barrel; the Infini Pro Dryer that automatically shuts o! when set down and the Versa Style Iron, which combines a flat iron, roller set and three curling irons in one tool. Available in May at Ulta. $149.99 to $199.99

(2) GHD The British styling brand’s latest dryer, GHD Air, aims to give amateurs a professional edge. The jet-black dryer features a salon-strength AC motor designed to last longer than the average consumer dryer and to dry hair more quickly. GHD Air, which carries a two-year warranty, also incorporates ionic technology and temperature control to stave o! frizz and flyaways. Available at Sephora and select salons. $225

(3) DRYBAR The express blow-dry outpost doubled as a product lab to create a new line of tools designed by Drybar founder Alli Webb. Tested and refined with the help of nearly 1,000 stylists across 26 Drybar salons, the collection of canary-yellow heat styling tools carry playful, bar-inspired names, including The 3-Day Bender Curling Iron, Smooth Operator Flatiron and Buttercup Blow Dryer. Available at Sephora and Drybar. $125-$185

(4) THEORIEA newcomer to the styling scene, Theorie is bent on infusing its tools with high-end design elements. The blow dryers are handmade in Italy and powered by an AC motor that’s said to cut drying time in half. Other items include the SAGA Touch Titanium Flat Iron, available in black, red, purple and blue, and the Digital Titanium 4 in One Curling System, which includes four interchangeable barrels and relies on metal ceramic heater technology to deliver fast and even heat. Available at select salons, Folica.com and Beauty.com. $150 to $250

(5) R SESSION PRO TOOLSFounders Kevin Ryan and Frank Rizzieri’s recently revamped collection is the culmination of their years of experience styling hair for shoots, fashion shows and celebrities. Rizzieri says they plan to leave basic tools to others, instead creating unique items like the Tidal Waver, a dual-barrel curling iron that reaches 450 degrees and features digital temperature control, and the Mini Pinpoint Flat Iron, a petite iron designed to reach close to the scalp for precious detailing. Available at select Aveda Institutes and salons. $70 to $125

(6) HAIRMAX LASERCOMB This FDA-approved at-home device, available in four models featuring a range of seven to 12 laser modules, is designed to treat hair loss in men and women. It delivers laser light energy directly to the scalp, which is said to jump-start hair follicles and hair growth when used three times a week for eight- to 15-minute sessions. Available at high-end department stores, including Neiman Marcus, and on QVC. $295 to $545

The newest styling tools aim to do more than simply curl or smooth hair. Some of the latest improve hair quality as well, says Janet Taake, senior vice president of merchandising at Ulta Beauty. High-tech add-ons, like digital-thermometer gauges, are prompting many consumers to trade up to newer models. Retail sales for hair appliances, which includes stylers, dryers and trimmers, gained 1.74 percent to 74.6 million units in 2012, says Virginia Lee of Euromonitor International. Here, some new tools that promise to heat up the category. —M.P.

Tool Time

PHOTOGRAPHED BY GEORGE CHINSEE

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(1) ROWENTA The German brand will soon bring its high-tech beauty tools—complete with all sorts of bells and whistles—to U.S. soil. Of note: the Curl Active Iron, which has a motorized, self-spinning barrel; the Infini Pro Dryer that automatically shuts o! when set down and the Versa Style Iron, which combines a flat iron, roller set and three curling irons in one tool. Available in May at Ulta. $149.99 to $199.99

(2) GHD The British styling brand’s latest dryer, GHD Air, aims to give amateurs a professional edge. The jet-black dryer features a salon-strength AC motor designed to last longer than the average consumer dryer and to dry hair more quickly. GHD Air, which carries a two-year warranty, also incorporates ionic technology and temperature control to stave o! frizz and flyaways. Available at Sephora and select salons. $225

(3) DRYBAR The express blow-dry outpost doubled as a product lab to create a new line of tools designed by Drybar founder Alli Webb. Tested and refined with the help of nearly 1,000 stylists across 26 Drybar salons, the collection of canary-yellow heat styling tools carry playful, bar-inspired names, including The 3-Day Bender Curling Iron, Smooth Operator Flatiron and Buttercup Blow Dryer. Available at Sephora and Drybar. $125-$185

(4) THEORIEA newcomer to the styling scene, Theorie is bent on infusing its tools with high-end design elements. The blow dryers are handmade in Italy and powered by an AC motor that’s said to cut drying time in half. Other items include the SAGA Touch Titanium Flat Iron, available in black, red, purple and blue, and the Digital Titanium 4 in One Curling System, which includes four interchangeable barrels and relies on metal ceramic heater technology to deliver fast and even heat. Available at select salons, Folica.com and Beauty.com. $150 to $250

(5) R SESSION PRO TOOLSFounders Kevin Ryan and Frank Rizzieri’s recently revamped collection is the culmination of their years of experience styling hair for shoots, fashion shows and celebrities. Rizzieri says they plan to leave basic tools to others, instead creating unique items like the Tidal Waver, a dual-barrel curling iron that reaches 450 degrees and features digital temperature control, and the Mini Pinpoint Flat Iron, a petite iron designed to reach close to the scalp for precious detailing. Available at select Aveda Institutes and salons. $70 to $125

(6) HAIRMAX LASERCOMB This FDA-approved at-home device, available in four models featuring a range of seven to 12 laser modules, is designed to treat hair loss in men and women. It delivers laser light energy directly to the scalp, which is said to jump-start hair follicles and hair growth when used three times a week for eight- to 15-minute sessions. Available at high-end department stores, including Neiman Marcus, and on QVC. $295 to $545

She anticipates the category will continue to grow at a 2 to 3 percent clip in 2013, but that the post-wash segment, comprised of conditioners and treatments, is well outpacing that growth so far this year, gaining 8 percent year to date, not-ing “We are tapping into this growth area with our latest launches of Suave Pro-fessionals Moroccan Infusion Moroccan Argan Styling Oil and TRESemmé Plati-num Strength Renewing Deep Conditioning Treatment.”

Unilever’s staunchest competitors, namely L’Oréal and Procter & Gamble Co., have also kicked their innovation programs into high gear.

Karen Fondu, president of L’Oréal Paris USA, says the brand’s new Advanced Haircare intends to move hair care away from a commodity category to a true beauty need in consumers’ eyes. The collection—which was five years in the mak-ing—consists of five clinically tested regimens of shampoo, conditioner and hair treatment. The latter is billed as a critical step. The ranges, namely Total Repair 5 (restoring), Smooth Intense (frizz fighting), Power Moisture (hydrating), Color Vibrancy (color protection) and Triple Resist (strengthening), launched in Janu-ary and could ring up $100 million in sales in its distribution of 35,000 doors.

Fondu says the line is “encouraging women to adopt a three-step hair-care rou-tine of shampoo, condition and treat to help hair look gorgeous and reach its opti-mal health. The successful launch of Advanced Haircare is significantly contribut-ing to the growth of the category, which has been banal for several years.”

P&G’s efforts also are focused on regimen building. The company, which launched 150 stockkeeping units across hair care and color in January alone, is working to fill what it sees as underserved but growing benefit spaces, including antiaging, men’s, multiethnic and treatment products, according to Walter Geiger, P&G’s vice president and general manager, North America, hair care and color.

The company’s latest launches include Pantene Expert Collection, Head & Shoul-ders Old Spice 2-in-1, Head & Shoulders Damage Rescue, the relaunch of Herbal Essences and the reintroduction of Vidal Sassoon Pro Series.

It’s an aggressive lineup, acknowledges Geiger, adding they all have purpose. “All of our innovations have a very clear target audience and consumer profile,” he says.

Speaking specifically about Vidal Sassoon, for example, Geiger says, “We are sa-lonifying the mass retail aisles in the U.S. We are building on Vidal Sassoon’s 85 percent awareness and reemphasizing his positioning of salon genius and making our very best technology available at retail. Vidal Sassoon wanted to democratize hair care.” He explains that all the products within the brand—including shampoo, conditioner, styling, treatment and color—are designed to work together.

P&G’s Pantene Expert range also is designed to encourage consumers to widen their regimen to wash, condition and treat. He called out Age Defy Ad-vanced Thickening Treatment as a standout item in the Pantene Expert range. “It’s meeting a new need that’s building the category and recruiting a new cus-tomer. She’s trading up from current Pantene and she’s using an additional step in the regimen,” says Geiger. Items in the Pantene Expert Collection are priced

between 200 and 250 percent above Pantene’s base line. “All of our Pantene launches are off to a great start,” says Geiger. “There is not a

single innovation from Pantene that is not performing at or above our expectations.”P&G also saw an opportunity to appeal to consumers’ love of nostalgia with the

relaunch of Herbal Essences, a move that returns to the brand’s iconic Nineties’ translucent floral packaging. Also back are the original scents, albeit in formulas free of sulfates and silicone. The brand reshot its eyebrow-raising TV commercial, too, (the newest iteration features spokesmodel Nicole Scherzinger, screaming “yes, yes, yes” in the airplane bathroom), which first aired during the Grammy Awards. Following the commercial’s premiere, Herbal Essences, using the hashtag #first-time, was the number-one twitter trend for a 45-minute stretch, says Geiger.

He hints that more launches are slated for this summer. “We have innovation in spaces that are really pushing the envelop,” says the executive.

New introductions from megabrands—including Clear’s Ultra Shea and Pan-tene Pro-V Truly Relaxed and Truly Natural—have also enlivened the multicul-tural hair-care category. Category leader Soft Sheen-Carson says several of its big-gest launches this year—particularly Dark and Lovely Au Naturale, which marks the brand’s entry into the natural hair segment, Dark and Lovely Go Intense! Color, a high-pigment colorant infused with olive oil, and Optimum Amla Leg-end, a line formulated with amla oil to repair damage, are off to a strong start. Together, they’ve generated 800,000 YouTube views and Facebook impressions after six weeks on the market, according to Nicole Fourgoux, vice president, gen-eral manager of Soft Sheen-Carson. “These new items are selling faster than plan, trending at two times the sales level as anticipated,” says Fourgoux.

Products for textured hair are increasingly merging into the general market assortment at many retailers.

“Multiethnic has been a big delight in terms of growth,” says Curtin of Wal-greens. “It’s part of our core assortment and we did add more space to natural curl. As more hair types start to emerge, this will be an area where we’ll see more growth. It’s not just about relaxers anymore.” She notes that Walgreens calls out products for women with textured hair by style, such as natural curl and sleek and straight. “The Shea Moisture brand has been one of our most popular lines,” says Curtin.

The hope is that all the activity across hair care—and the collective call for regimen-building—will bolster growth well beyond the low-single digits in the years ahead.

“The category is advancing from one where the guest simply used to grab her item and go, to one that is an inspirational beauty experience she wants to ex-plore, be educated about and try new things in,” says Christina Hennington, vice president of healthy and beauty at Target. “This new mind-set is creating even greater demand for newness, innovation and improved technologies in antiaging, scalp health and product efficacy.”

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36 WWD BEAUTY INC

AS DOLLAR STORES SHED THEIR DOWDY IMAGE WITH MORE UPSCALE BRANDS

AND AN IMPROVED SHOPPING EXPERIENCE, CONSUMERS—AND THE COMPETITION—

HAVE TAKEN NOTICE. BY FAYE BROOKMAN / ILLUSTRATION BY J.D. KING

PENNY PRESS

FOR AN INCREASING NUMBER OF CONSUMERS—MORE THAN HALF OF ALL AMERICANS,

IN FACT—SHOPPING IN DOLLAR STORES IS MAKING MORE SENSE THAN EVER BEFORE.

NO WONDER. ONCE CONSIDERED DUSTY, DARK AND CRAMPED, THE MORE THAN 30,000

DOLLAR OR VALUE DOORS ACROSS THE COUNTRY HAVE UNDERGONE A MAKEOVER,

ADDING BRAND NAMES AND PRODUCT CATEGORIES THAT ARE RENDERING THEM A BIG-

GER THREAT TO DISCOUNT AND DRUGSTORES.

AN IMPROVED BEAUTY SELECTION IS PART OF THAT OVERHAUL, INCLUDING BRANDS

LIKE COVER GIRL, L’ORÉAL PARIS AND SALLY HANSEN. WHAT SUCH BRANDS ARE DISCOV-

ERING IS A RETAIL CHANNEL GROWING AT A PACE FASTER THAN STARBUCKS. DOLLAR

GENERAL, FOR EXAMPLE, ONE OF THE SECTOR’S TOP PLAYERS, WILL ADD 635 STORES

creo

this year to its 10,500 units and remodel 525 more. That translates into opening, remodeling or relocating three stores per day. Family Dollar, another giant, plans 500 more units in 2013.

The top-three dollar chains—Dollar General, Family Dollar and Dollar Tree—ac-count for 21,000 doors that ring up more than $56 billion a year, while retailers like 99 Cents Only, Deal$, Fred’s Super Dollar, closeout king Big Lots and Five Below comprise the remainder. A new value-store retailer will open next fall in the St. Louis market called Here Today, founded by former Save-A-Lot executives.

here’s no denying the growth opportunities. “We believe we are well-positioned for future growth,” said Dollar General’s chairman and chief executive officer Richard Dreiling last year, noting the firm is forecasting 2013 sales to increase 10 percent to 12 percent.

Industry consultant Allan Mottus points out, “You don’t find drugstores and discount stores promising that.”

In fact, Deloitte reports that dollar stores have ef-fectively nabbed market share from discount and drug

merchants over the past four years. The dollar channel expanded from 1.5 percent of total consumer product goods sales in 2008 to 1.8 percent three years later. Drugstores declined from 25.2 percent to 24.1 percent and discounters from 49.4 percent to 48.5 percent.

That trend is expected to continue. “Shoppers continue to face financial stress.

You can’t be a marketer and ignore dollar stores anymore,” says Mottus. Not many beauty companies are ignoring the signs. Although beauty as a cat-

egory currently accounts for less than 2 percent of sales, it produces better profit margins than 80 percent of the other goods in the store, say experts. Virtually ev-ery mass brand, including L’Oréal, Cover Girl, Maybelline, Sally Hansen, Kiss and Wet ‘n’ Wild, has added dollar stores to their distribution over the past two years. Personal-care brands from Procter & Gamble and Unilever are well represented, too. While many traditional mass brands don’t want to discuss venturing into value stores for fear of irritating the likes of Wal-Mart or Walgreens, store visits reveal the same brands that are sold in nearby mass merchants on full display. For their part, shoppers see no shame in frequenting dollar stores. Judith Engle, for example, buys her TRESemmé hair spray and Nice ’n Easy hair color at her upstate New York Dollar General for the simple reason that it’s convenient. The 60-something retired mother likes to stretch her budget, but also has to drive 20 minutes to a drugstore, an hour to a department store. Engle buys paper towels and other household needs at Dollar General, so “why not mascara,” she reasons.

The store near her opened in a shuttered supermarket—the only one in town—so Engle also purchases fill-in groceries. She’s not alone: Dollar chains are bank-ing on the existence of food to inveigle people to buy more full-price, high-margin goods such as beauty and personal care. “Tide and Cheerios are the gateway to beauty [purchases],” says Candace Corlett, president of WSL Strategic Retail, who says the channel’s transformation from “tchotchkes” to well-known brands has established respectability in consumers’ eyes.

A 2012 report by The Hartman Group called “Topography: Mapping the New Consumer Pathways” came to a similar conclusion, noting “The allure of the bargain, the thrill of the hunt, an influx of food and beverage products, all account for con-tinued dollar stores’ success even in the face of post-recession economic recovery.”

While the recession drove a lot of shoppers to the channel, attracting penny-pinching shoppers who wanted to buy smaller sizes of their favorite brands, a con-

Dollar General 2012 Sales: $16 billion

Store Count: 10,500

Headquarters:

Goodlettsville, Tenn.

Known for: New formats with fresh layouts, updated fixtures and improved assortments. Aggressive expansion strategy with plans for 11,000 stores by the end of 2013. Seventy percent of stores are in rural markets, but the chain is planning to penetrate more urban areas, including in California.

Dollar Tree Sales 2012 Sales: $7.3 billion

Store Count: 4,671

Headquarters: Chesapeake, Virginia

Known for: Keeping prices to a $1, unlike Dollar General and Family Dollar. Dollar Tree concentrates its beauty assortment on a brand called Colormates.

Family Dollar2012 Sales: $9.3 billion

Store Count: 7,600

Headquarters: Matthews, N.C.

Known for: Upgraded new stores with 500 more health and beauty-care items. New format improves category adjacencies for easier shopping. Recently inked a deal with McLane Company to facilitate convenience foods. Consumables, including beauty, account for 69 percent of total sales versus 65 percent three years ago. Former CVS exec Mike Bloom is expected to increase beauty and grooming selection. Plans 500 new stores in 2013.

Five Below2012 Sales (fiscal year):

$418.8 million

Store Count: 244

Headquarters: Philadelphia

Known for: An exciting format targeted at tweens and teens. Five Below is considered a cool place to shop. Cosmetics has made a comeback in the merchandise mix after taking a back seat to novelties and candy. Now a public company, Five Below is scheduled to open 60 new stores in 2013 with an ultimate goal of 2,000 doors.

Fred’s Super Dollar2012 Sales (fiscal year): $1.95 billion

Store Count: 713

Headquarters: Memphis, Tenn.

Known for: Close resemblance to a drug chain and for filling in market holes where drug chains have closed. Many stores even have pharmacies. Last year, Fred’s opened a prototype smaller than its typical 16,000-square-foot format to aid in launching into smaller communities. Fred’s has a well-developed ethnic hair-care presentation.

99 Cents Only2012 Sales: $400 million

Store Count: 315

Headquarters: City of Commerce, Calif.

Known for: Well-heeled clientele known to frequent the stores thanks to locations in or near a!uent California towns, including Beverly Hills. 99 Cents Only is often considered the Cadillac of dollar stores.

38 WWD BEAUTY INC

VALUE ADDEDROUNDING UP THE MAJOR PLAYERS IN THE DOLLAR-STORE CHANNEL. —F.B.

T

The sweet spot, however, is those from house-holds making less than $50,000. Of the primary households shopping dollar stores, 66 percent fall into that range, while Bloom said Family Dollar’s prime shopper earns $40,000 a year or less and is often a single mom in a household with kids.

Deloitte Research identifies three buckets of dol-lar-store shoppers. While there are those that fit the stereotypical image of someone waiting on a pay-check and filling in with small purchases from dollar stores, there’s also what the research company calls “rural, fixed income.” Engle, the upstate retired con-sumer, falls into that bracket—she uses dollar stores for convenience and value.

Then there are suburban moms, who become born-again dollar consumers, according to Deloitte. That fits the description of Branchburg, N.J., resident Heather Sanchez, who says she heads first to Five Be-low when her daughter wants fun beauty items. “My shopping habits have changed in the past few years because of the economy and three kids in college,” says Sanchez. “The dollar stores aren’t dirty or full of bad merchandise, so why not at least start there?”

And it just might be Sanchez’ college-age offspring who help bolster support for value stores. “Many kids get introduced to dollar stores in college for their ra-men noodles,” says Corlett. Millennials, a group not as channel-focused as Baby Boomers, see no shame in shopping budget stores, either.

Latinos also skew slightly higher in incidence of shopping the channel. Surprisingly, the Hartman research found almost equal shopping incidence be-tween men and women.

Despite the appeal of the demographics, one mar-keter who asked not to be named says he plans pene-tration into the channel with a slightly different offer than what he sells drug and discount stores. “Sure, I

worry about what Wal-Mart might think, but we give those partners the à la carte version, while dollar stores are the drive-through,” he explains.

Be that as it may, the success of dollar stores has prompted other channels to react with greater value, especially in beauty. Wal-Mart’s 15,000-square-foot Express format is a development that retail analysts think could compete with Dollar General and Dollar Tree, while Target created a value presentation of $1 items right at store entry a couple of years ago. And if the current sales curve is any indication, expect the competition to become ever-more fierce when it comes to where the buck will finally stop.

vergence of several market forces over the past four years has further altered the landscape. Consolida-tion in the chain drugstore industry opened up myr-iad opportunities in terms of nabbing top personnel and locations. Stores vacated by the closing of chains such as Drug Fair in New Jersey offered dollar stores new sites in better locations in larger towns and cit-ies. Upscale Cranford, N.J. is a prime example—Dol-lar General now sits in a former drug chain site.

The shrinking drugstore channel also provided fertile ground for executive recruitment. One of the most high profile is the defection of Mike Bloom, the former executive vice president of merchandising and supply chain at CVS who is now president and ceo of Family Dollar, a position he assumed in 2011.

“With Mike Bloom there, you knew they’d be more interested in beauty,” said Markwins International president Bill George shortly after Bloom’s appoint-ment, and he was right. Last year, according to Family Dollar documents, the retailer added 500 more health and beauty items to its mix. Dollar General’s Richard Dreiling was formerly chairman and ceo of Duane Reade and before that he was executive vice president and chief operating officer at Longs Drug. “You’ve got people from Longs Drug, Duane Reade and CVS run-ning the stores now,” says one beauty executive, “so it isn’t surprising to see beauty get more important.”

Granted, Dollar General has a way to go when it comes to improving the visual presentation in some stores. But progress is being made. Gone are tubular fluorescent lights, dingy floors and crowded shelves. The same is true at Family Dollar, where a new pro-totype has improved category adjacencies. “You see the influence Mike [Bloom] has had,” says David Pina, the creative director at InStyle, an alternative fragrance company hoping to add a fragrance option in 2014 for dollar stores.

“The stores, such as Family Dollar, are being redesigned and are less cluttered,” agrees Corlett. Fred’s and Five Below are also earning high marks. A Fred’s that opened late in 2012 in Foley, Ala., features lighted shelving, wider aisles and im-proved signage. “We have conducted extensive qualitative and quantitative re-search into what our customers and our competitors’ customers want in a shop-ping experience,” says the retailer in a statement. “We feel Fred’s Super Dollar has the ideal size, product mix and store flow to accommodate customers who are looking for a quick in-and-out shopping trip, or those who want a full-on bargain-hunting shopping experience.”

The phrase “full-on bargain hunting,” is not one mainstream brands necessarily want to hear. And some national brands are sold for less in the value channel. A recent visit to a Family Dollar found Cover Girl Lash Blast Volume Mascara for $6 (suggested manufacturer’s retail price $8.95) and Suave Naturals advertising at 90 cents versus $1.79 at Walgreens.

But most beauty items are sold at the day-in day-out suggested price: Engle’s Nice ’n Easy hair color costs the same at Dollar General as at her drugstore. While a few chains, such as Dollar Tree, adhere to the dollar pricing, the major powers sell items as expensive as $20 and up. The value often is in food, where special sizes or options are created for dollar stores. In addition, while there are closeouts in beauty and grooming, most stock is current.

Marketing experts say that the value shopper can support higher-priced offer-ings. According to The Hartman Group, 50 percent of shoppers who hit bargain-basement formats earn in excess of $100,000 or more per year.

39 WWD BEAUTY INC

“Sure, I worry about what Wal-

Mart might think, but we give those

partners the à la carte version,

while dollar stores are the

drive-through.”

Ka-Ching! The Appeal of the Value ChannelExplosive Growth: Dollar stores are proliferating faster than Starbucks—literally. Dollar General is adding 635 stores this year, Family Dollar, 500.Improved Shopping Experience: Dusty shelves and dark, cramped aisles have given way to stores that are brighter, cleaner, easier to shop and in more convenient locales.Dollar Is a Misnomer: While some beauty products are discounted, the majority are sold at suggested retail prices. Other categories, such as food, provide the value proposition.Wide Consumer Base: While the majority of customers have HHI’s of $50,000 a year or less, a!uent shoppers are increasingly drawn to the channel as well. Ditto Latinos and men.Let the Battle Begin: Mass merchandisers like Wal-Mart and Target have taken notice, and are increasingly implementing their own value-driven strategies.

Hair Stylists

STEPHEN SOLLITTONOTABLE RED-

CARPET MOMENTS: Amy Adams at the Oscars and BAFTA Awards,

Hailee Steinfeld for the Academy Awards and Screen Actors Guild Awards in 2011, Rebecca Hall for the premiere of The Town in 2010 CLIENTS: Amy Adams, Hailee Steinfeld, Rebecca Hall, Gillian Jacobs and Noomi RapaceBRAND CONTRACT: None SIGNATURE STYLE: Light, pretty and natural makeup looks.GO-TO PRODUCT: Benefit Get Bent Mascara in Black

ADAM BREUCHAUD NOTABLE RED-

CARPET MOMENTS: Alicia Vikander at the Oscars, Karolina Kurkova

for the Vanity Fair Oscar party, Anne Hathaway for the Kennedy Center Honors gala in 2011, Jessica Chastain at the Venice Film Festival in 2011CLIENTS: Bryce Dallas Howard, Karolina Kurkova, Kirsten Dunst and Lea MicheleBRAND CONTRACT: NoneSIGNATURE STYLE: Softly-sculpted fresh skin and groomed brows. GO-TO PRODUCT: Dior Eyeshadow

BEAU NELSON NOTABLE RED-

CARPET MOMENTS: Kristen Stewart at the Oscars, Nicole Richie for

the Golden Globes, Jessica Chastain for the Toronto Film Festival in 2011 CLIENTS: Kristen Stewart, Lily Collins, Nicole Richie, Anna Paquin and Natalie PortmanBRAND CONTRACT: Nelson is cofounder of the Beauté Cosmetics brand. SIGNATURE STYLE: Classic looks that are modernized with contemporary takes on color and texture. GO-TO PRODUCT: Giorgio Armani Designer Lift Foundation

CAROLA GONZALEZ NOTABLE

RED-CARPET

MOMENTS: Kerry Washington at the Oscars, the

Golden Globes and the London premiere of Django Unchained CLIENTS: Kerry Washington, Jaime King, Rashida Jones and Naomie Harris BRAND CONTRACT: NoneSIGNATURE STYLE: Glowing skin and bold color choices for the eyes and lips. GO-TO PRODUCT: Giorgio Armani Fluid Sheer in #2

KRISTEE LIU NOTABLE RED-

CARPET MOMENTS: Gloria Reuben at the Oscars, Bella Heathcote for the Vanity Fair

Oscar party, Angela Sarafyan for the 2012 premiere of The Twilight Saga: Breaking Dawn – Part 2CLIENTS: Gloria Reuben, Bella Heathcote, Isabelle Fuhrman and Angela SarafyanBRAND CONTRACT: NoneSIGNATURE STYLE: A light hand and flawless skin. GO-TO PRODUCT: Giorgio Armani Luminous Silk Foundation

RED CARPET WHIZ KIDSMEET THE RISING HAIR AND MAKEUP STARS OF THE HOLLYWOOD BEAUTY SCENE. COMPILED BY RACHEL BROWN

Gloria Reuben

Alicia Vikander

Amy Adams

Kristen Stewart

Kerry Washington

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JENNY CHO NOTABLE RED-

CARPET MOMENTS: Amanda Seyfried and Jennifer Garner at the Oscars, Amanda

Seyfried at the Screen Actors Guild Awards and the Critics’ Choice Movie Awards, Carey Mulligan at the Grammy Awards CLIENTS: Amanda Seyfried, Rosie Huntington-Whiteley and Carey Mulligan BRAND CONTRACT: Suave SIGNATURE STYLE: Slightly undone, textured hair and loose waves.GO-TO PRODUCT: Suave Professionals Moroccan Infusion Oil

TAKISHA STURDIVANT- DREW NOTABLE RED-

CARPET MOMENTS: Kerry Washington at the Oscars,

the Independent Spirit Awards and the London premiere of Django Unchained CLIENTS: Kerry Washington, Lucy Liu, Amber Riley and Gina Torres BRAND CONTRACT: NoneSIGNATURE STYLE: Curls and messy waves. GO-TO PRODUCT: TRI Aerogel Hair Spray

MARA ROSZAKNOTABLE RED-

CARPET MOMENTS: Zoe Saldana and Nicole Kidman at the Oscars,

Emma Stone at the Golden Globes in 2011CLIENTS: Emma Stone, Zoe Saldana and Mila KunisBRAND CONTRACT: NoneSIGNATURE STYLE: Polished, yet e!ortless-looking hairstyles. GO-TO PRODUCT: Bobby pins and bungee cords from Boots

CREIGHTON BOWMANNOTABLE RED-

CARPET MOMENTS: Samantha Barks at the Oscars, Dianna Agron at

the 2012 Metropolitan Museum of Art Costume Institute Gala, Melissa Leo and Helen Mirren for the 2011 Oscars CLIENTS: Helen Mirren, Jane Krakowski, Heidi Klum, Renée Zellweger, Evan Rachel Wood, Bryce Dallas Howard, Kelly Ripa and Christina AguileraBRAND CONTRACT: NoneSIGNATURE STYLE: Beautiful, approachable hair with a modern twist.GO-TO PRODUCT: Klorane Dry Shampoo

ALEX POLILLO NOTABLE RED-

CARPET MOMENTS: Alicia Vikander at the Oscars, Rooney Mara at the New York premiere

of Side E!ects, Cate Blanchett at the 2012 Metropolitan Museum of Art Costume Institute GalaCLIENTS: Rashida Jones, Alicia Vikander, Rooney Mara, Ashley Benson, Kristen Wiig and Gemma ArtertonBRAND CONTRACT: NoneSIGNATURE STYLE: Hairstyles that are either romantic and ethereal or graphic and clean.

GO-TO PRODUCT: Bumble and bumble Surf Spray

Hair Stylists

RED CARPET WHIZ KIDSMEET THE RISING HAIR AND MAKEUP STARS OF THE HOLLYWOOD BEAUTY SCENE. COMPILED BY RACHEL BROWN

Nicole Kidman

Jennifer Garner

ington

Kerry Washington

Samantha Barks

Rooney Mara

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42 PRIVATE LIVES

F

Flex Time

WWD BEAUTY INC

JAYME CYK discovers how skin-care entrepreneur Ole Henriksen gives new meaning to raising the bar. PHOTOGRAPHED BY MARK HANAUER

or Ole Henriksen, flipping out is all in a day’s work. As is flying through the air, twisting, twirling, doing splits and executing a flawless Iron Cross on the

rings. Henriksen, the skin-care entrepreneur and celebrity facialist who sold his namesake brand to LVMH Moët Hennessy Louis Vuitton in 2011, is an avid gymnast. “Part of keeping a youthful and vibrant appearance is about good posture, a strong body and a flexible body,” says the preternaturally youthful Henriksen, who has outfitted his backyard high in the hills of Los Angeles with uneven parallel bars and rings to facilitate his lifelong passion.

“As a little boy, I dreamt of becoming a trapeze artist,” says Henriksen. “I wanted to join the circus and travel the world.” Growing up in the Danish countryside, gymnastics was very much encouraged in school. Henriksen excelled at the sport. “I turn 62 this year,” says Henriksen, “and I can tell you, even at this stage of the game, I feel no difference in my body and physical strength from when I was a young kid.”

In addition to his hour-long, five-days-a-week backyard workout, Henriksen completes 300 push-ups a day to maintain his upper body strength. “I’m very focused on coordination and balance,” says Henriksen. “[Gymnastics] is great for your skin, too. When you think about it, the oxygenation goes to every part of your body.”

In fact, some of his best ideas have come while hanging upside down. “So much of fitness is antigravity,” explains Henriksen. “That creates synergy in products for me. What I aim to do is create formulations with antigravity properties to lift and define the facial contours,” he continues. “The beauty of textured skin is that it’s mature and has beautiful expression lines. That reminds me of the beautiful fluidity and flexibility of a gymnast’s body. So I take my products to the max, just as I take my fitness to the max.”

While Henriksen has traveled the world establishing his brand and continues to be heavily involved in the business post-acquisition, he hasn’t given up on that circus dream yet. “Watching professional gymnasts, their bodily strength and elegance, I’m awestruck,” he says. “I know I cannot go out and emulate them, but it does inspire me to go on and on,” he continues, adding with a laugh, “When I do I retire, I’ll apply to join Cirque du Soleil in Las Vegas.” No doubt they’d snap him up.

IT’S YOUR CHANCE. EMBRACE IT.

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