The Blush Is Still on Mary Kay as Firm Celebrates Its 30th Year : Cosmetics: In direct sales, the company is second only to Avon. Foreign expansion is the current priority.
As a new widow unable to obtain a bank loan, Mary Kay Ash beat the odds when she successfully started her cosmetics firm with $5,000.
This month, as it celebrates 30 years in business, Mary Kay Cosmetics Inc. continues to impress the business world.
The privately held firm remains the nation’s second-largest direct-sales cosmetics company--behind Avon Products Inc.--with sales of its trademark pastel-pink products reaching $610 million last year. Sales totaled $406 million five years ago.
Ash, now chairman emeritus, built the company on enthusiasm--and a lot of pink Cadillacs and diamond bumblebee jewelry showered on her successful saleswomen, whom the company calls beauty consultants. She says she’s proudest of the opportunities Mary Kay has offered women over the past three decades.
“My only objective in starting the company was to give women a chance that I had never had,” Ash said, recalling her own problems in getting Mary Kay off the ground.
“In the early ‘60s, a woman could not borrow money. If I had gone to a bank to try to borrow the initial investment for this company, they would have laughed me out the front door,” she said in a recent interview.
Ash started the company with $5,000 on Sept. 13, 1963, as a “50ish” (she doesn’t give her age) retiree. Her husband had died a month before the company was to open, so her three children stepped into the void.
Son Richard Rogers, then 20, took over the financial workings of the fledgling company and now is its chairman.
“The ace in the hole I had in starting this was that I had spent 25 years in direct sales,” Mary Kay Ash said. “Richard, on the other hand, had a business acumen that none of us realized he had.
“My job is motivation, and seeing to it that the concerns of the women in the company are met.”
To that end, Ash has an open-door policy in her elegant Dallas office and long has been involved personally with her employees: dispensing advice and Thanksgiving turkeys; baking thousands of cookies for her numerous teas; and making sure that the 7,000 letters she gets each month are answered by mail or phone.
“She really is sort of almost deified by her people,” said Jay Hescock, executive vice president of the Direct Selling Assn. in Washington, D.C., which inducted Ash into its hall of fame in 1976.
“I have to say that I was kind of skeptical when I first met her,” Hescock said. “The bleached blond hair, the kind of ‘God first, family second’--I really wasn’t sure that that was all for real. It didn’t take long for me to be convinced that my skepticism was wrong.”
Even her rivals have nice things to say. Dick Heath, chief executive of BeautiControl Cosmetics Inc., another direct-sales cosmetics company in Dallas, calls Ash “a top-notch, quality individual.”
“She . . . stands for the virtues and qualities that I think we’d like our city to stand for,” he said.
“All I did was the same thing Mama does when she says, ‘Come on, honey; come on, you can do it; you can do it!’ And that’s what we have simply done, to encourage them to success,” Ash says. “I consider these (sales) people to be my daughters.”
And she does mean daughters. Mary Kay has $92 million in automobiles on the road, she said, and only one man has ever won the distinctive blush-pink Cadillac.
Ash claims her company has more female employees than any other in the country earning more than $50,000 a year. One national sales director earned $800,000 last year and is expected to top $1 million this year, company officials said.
As for Ash and Rogers, who took the company private in a 1985 leveraged buyout, Texas Monthly magazine this month put their net worth at $320 million.
The course of Mary Kay Cosmetics, though, hasn’t always been rosy.
In 1989, the company decided to stop testing its products on animals after it was skewered in a series of “Bloom County” comic strips. The next year, Mary Kay swapped lawsuits with BeautiControl.
Ash says she sees her company as a vehicle for women’s empowerment--despite the sugary image that may be projected by the company’s pastel-pink products and elaborate pep rally-type annual seminars that draw tens of thousands of saleswomen to Dallas each year. She says her company is based on the Golden Rule, with the motto: “God first, family second, career third.”
“In our company, we give you a chance to prioritize your life. Most women want to be a good wife and a good mother, but you’d like to have a career, too,” she said.
These days, Mary Kay is turning its priorities toward international expansion.
Mary Kay operates in 19 countries and has 325,000 salespeople worldwide, about 15% of them abroad, according to Gerald Allen, president of Mary Kay International.
Last year, $160 million, or 14%, of the company’s retail sales, came from foreign sales, Allen said. He said the company eventually hopes to derive between 55% and 60% of its revenue from overseas sales. That would be roughly the same percentage as Avon, which had $3.8 billion in sales in 1992.
