Soap Company’s Sweet Smell of Success Not Wearing Off
Fred Segal Essentials in Santa Monica stocks 75 brands of luxury soap from around the world, including Annick Goutal of Paris and Italy’s Midani Erbe.
But it’s a funky, fragrant soap made by tiny Primal Elements Inc. in Garden Grove that leaves much of the competition in suds.
Fred Segal owner Robin Coe-Hutshing says customers crowd around the Primal counter to smell, ogle and snap up distinctive bars custom-cut from 5-pound loaves of clear glycerin and embedded with whimsical images such as golf balls, happy faces, leopard spots and TV sets.
The soaps are the creations of husband-wife team Scott and Faith Freeman, who in seven years have built Primal from a storefront operation in Long Beach into a thriving company with more than $14 million in sales.
Primal now has more than 120 employees who make the soaps in a 55,000-square-foot factory in Garden Grove. The high-end soaps, candles and bath gels are sold to thousands of stores worldwide, including upscale retailers Nordstrom and Harrods in London.
Industrywide, sales of fancy bars are sluggish, and a slowing economy could further weaken the $260-million specialty-soap market. But Primal has kept its sales humming by rolling out new soap designs every three months.
“They’re always changing things and making them better,” said Richard Freedman, owner of Noteworthy Inc., a Santa Monica gift shop.
Primal’s sales for its fiscal year ended in April were more than triple what they were two years earlier, according to its founders, who are expecting strong growth in the current year. The Freemans say net profit is 6% to 8% of revenue, which would be roughly $1 million in the last fiscal year. Primal soaps sell for $6 to $10 per bar and account for 70% of the company’s sales.
Faith Freeman, who professes a lifelong interest in product design and aromatherapy, is the creative force, constantly scouring fashion magazines for new trends that can be transformed into edgy soaps. After noticing the sudden appearance of animal prints on apparel lines, for example, she designed a bar decorated with gold-and-black leopard spots.
Not all product launches have been successful. A licorice-scented soap sat on shelves a few years ago, putting a dent in the company’s earnings, Scott Freeman said.
But the strategy of continually augmenting its product line draws praise from Eric Flamholtz, management professor at UCLA’s Anderson School. “The only way to win in this game is to be more creative than everybody else and make them follow your lead,” he said.
The Freemans launched Primal Elements in December 1993 as a small bath-products shop in Long Beach. At the time he was an unemployed building contractor and she was a housewife. They borrowed $100,000 from her mother and added $20,000 in savings to start the business.
Acting on a suggestion from an industry contact, they sold soap bars by the inch, carving them from fragrant, colorful blocks. The relatively novel practice spurred sales and remains a fixture at the company.
When the bars sold so quickly that Primal’s suppliers couldn’t deliver enough soap, Faith Freeman began cooking up large batches at the couple’s Huntington Beach home.
With sales growing steadily in 1996, the Freemans took their soap to a national gift trade show in New York City. They were stunned by the response. “People were backed up in the aisles looking at our soaps,” Faith Freeman said. “We wrote 50 orders on the spot.”
They decided to shutter their Long Beach shop and focus on production full time, opening a factory with the help of a $100,000 loan from the U.S. Small Business Administration.
A year later, Nordstrom buyer Annette Tauber picked up a sample of Primal soap at another trade show. Taken by its “yummy scent,” she stocked it at a Nordstrom store in Dallas. Today, the retailer is Primal’s biggest customer, selling Primal soaps and candles at 55 stores, including several in Southern California.
Still, small shops remain Primal’s “bread and butter,” Scott Freeman said, accounting for 85% of the company’s business.
To cement its relationship with mom-and-pop stores, Primal has turned down requests from more than 400 retailers to sell its goods, lest they encroach on valued customers’ territories.
Under its director of research and development, Frank Asbury, the company introduced a line of quirky candles two years ago, including items that look and smell like chocolate cupcakes and jello molds. Candle sales have exceeded expectations, becoming the fastest-growing part of the business.
Primal also is hedging its bets in case a cooling economy dampens sales of fancy soaps and other luxury items. The company recently rolled out a batch of smaller, less expensive soaps and candles to round out its mix.
