Revlon Buys Beverly Hills Cosmetics Firm
On Wednesday, Roy Karrell was balancing his personal checkbook and couldn’t keep track of all the zeros in front of the decimal point. That was after paying cash for a Rolls-Royce Corniche on Monday morning and buying a Malibu estate next to Barbra Streisand’s that afternoon.
He admits it: He’s a very rich man. But just since last Friday.
That’s when he sold his Beverly Hills firm, Visage Beaute Cosmetics, to New York’s Revlon Inc. Neither Karrell nor Revlon will disclose the financial terms of the deal. Suffice it to say, according to Karrell, “it was millions and millions and millions.”
He says he has a five-year contract to remain as president, reporting to Robert A. Nielsen, president and chairman of Revlon’s fashion and designer group.
Not bad for yet another guy who started business four years ago in his garage with money garnered from friends and relatives. He had quick success with his custom-blended eye shadows, face powders, blushers and lipsticks. His initial $20,000 investment landed Visage Beaute in its office and factory space on Civic Center Drive in Beverly Hills. In its first year in department stores, which ended in April, the company had registered $14 million in retail sales.
Formed Own Firm
Once a stock boy behind Bloomingdale’s Elizabeth Arden counter in New York, Karrell eventually found his way to the vice presidency of the Halston and Orlane cosmetics companies. Finally, after forming his own California-based firm, Karrell says, he was in a position to shake up the cosmetics world.
“We are a tiny company by industry standards, but in some of our Nordstrom stores we are the No. 2 resource behind Lancome-- ahead of Estee Lauder, ahead of Clinique,” he says. “We are doing business that is a threat to the Lauders and the Lancomes of the world.”
In fact, Karrell told Women’s Wear Daily, an industry trade paper, that “both Nielsen and Leonard Lauder, president and chief executive officer of Estee Lauder Inc., called on the same day about buying Visage.”
Revlon also owns Max Factor, a California-based cosmetics company with an international market. And some industry observers have speculated that Revlon is attempting to develop a stronger foothold in Southern California because of its proximity to Pacific Rim business.
However, Revlon senior vice president Dan Moriarty says Revlon would have acquired Visage wherever it was based. “Its California character and location are not its selling points. But its success in California stores makes it evident that it will be successful internationally.
“Los Angeles is such a world-class creative capital that it makes sense that Visage grew up in Beverly Hills. But it could have grown up in New York, Paris or Milan,” Moriarty says.
Visage Beaute set a trend toward custom-blended products that influenced some of the largest cosmetics companies in the industry, including Revlon. Charles of the Ritz, a wholly owned subsidiary of Revlon, recently began re-emphasizing the custom powders it has sold since 1927. In June, Prescriptives, a division of Estee Lauder, added individually blended powders to its line of custom foundations. Revlon’s Nielsen was formerly president of Prescriptives.
But it is the lipsticks and eye shadows that set Visage Beaute apart. Consumers can take discontinued colors from other manufacturers to the Visage counter and have them matched. As Karrell points out, many women bring in tubes of inexpensive lipsticks or glosses and have the shades copied in Visage’s richer formulation.
In a typical month, the factory matches more than 4,000 units, Karrell says. “One woman went into Henri Bendel’s in New York and placed a $1,000 order for custom lipsticks,” he adds, noting that custom lipsticks retail at two tubes for $30. “She had 8-year-old Elizabeth Arden shades, Lauder glosses and some $1 tubes she’d bought at a discount drugstore--she wanted them all copied.”
Consumers leave samples of the colors they want matched. “When we’re good, it takes 10 days to fill orders--when we’re bad, it takes three weeks,” Karrell says. He admits that some matches aren’t perfect. “But we urge the customers to send them back until they are.” He notes that of a month’s 4,000 matches, 50 to 100 must be redone to the client’s satisfaction.
Matching Lipstick
Karrell notes that oranges are the most frequently matched lipstick shades and that more women request frosted eye shadows than matte finish.
“Yet the industry will tell you that orange lipsticks are hard to sell and that most women don’t want frosted shadows,” he says.
Visage introduced a skin-care collection last year, but color cosmetics represent the bulk of its business. According to Karrell, most cosmetics companies make their profits from skin-care sales. “It takes two minutes to rub a cream on the hand and sell a $35 product, but with color, it takes 20 minutes to sell it and show the customer how to use it,” Karrell says. “For that reason, most companies train their sales consultants to do the volume business in skin care. We do exactly the opposite and it works for us.”
In Southern California, six Nordstrom stores offer the custom-blend lipstick service. All Nordstrom and selected Bullock’s stores sell the custom powders, blushers and eye shadows.
