Are Cosmetics Recession-Proof? Mary Kay Thrives in Bad Economic Times
Thousands of women were recognized for expanding their businesses at the Mary Kay Cosmetics Career Conference's awards nights in Dallas this past summer because, contrary to almost everything else in the current economic downturn, lipstick sells in tough times.
In the first six months of this year, more than 200,000 recruits signed up to sell Mary Kay products. There are now 2.5 million independent sales consultants selling $2.5 billion worth of mascara, moisturizer and other beauty products globally.
"People still want to buy lipstick," CEO David Holl told "Nightline." "They may not want to buy as many lipsticks or as much of the skincare line, but you clearly see that if you have a value product that is just a little bit lower price point, that our sales force and their customers jump on that for sure."
Mary Kay's success is based on personalized attention, competitive prices, a fun way to shop and convenient delivery. Courtney Armstrong was a big seller in East Texas when "Nightline" first profiled her in 2009 and she says the recession hasn't slowed her down since then.
"I know the economy's kind of hurting a lot of people, but really we haven't seen that in Mary Kay," she said. "I have more customers now, more consultants now that I've been working with and it's really been an incredible year. We increased over the last year and added over a hundred new women to my team in the past year."
Armstrong and her team sell enough make-up to keep her in one of those famous pink Cadillac SUVs – her second, and she's positioned to earn a third.
"A lot of women are looking for a back-up plan," Armstrong said. "They're concerned about stability of their job, the stability of their husband's job. So they're looking for a back-up plan. A way to make extra money."
Company founder Mary Kay Ash, who started the business in 1963, joins a long list of other famous female entrepreneurs who have turned a simple idea or product to a branded empire.
| Estee Lauder |
She started out selling her chemist uncle's skin creams and persuaded Manhattan department stores to stock her products. By 1948, she had secured counter space at Saks Fifth Avenue and her products spread to other stores.
Turning her company into an international empire, Lauder was the only woman on TIME magazine's 1998 list of 20 most influential geniuses of the 20th century.
The New York-based company, which makes Clinique, Bobbi Brown and MAC Cosmetics, announced in August that its total revenue rose 13 percent to $8.81 billion from $7.8 billion last year.
| Essie Weingarten |
Weingarten started out with just 12 colors, which ranged from classic red to mauve shades, and each carried unconventional names such as "Baby's Breath" and "Bordeaux" -- two colors still in the Essie line today.
Over the years, Weingarten has turned the company she founded into a global luxury brand at the comestic counter. Essie Cosmetics now offers over 300 different nail colors, as well as a line of nail treatments, nail accessories, spa products and lip gloss.
It's estimated that the company generated $28 million in sales last year.
L'Oreal, the world's largest cosmetics company, acquired the nail polish maker in April 2010. Essie Cosmetics remains headquartered in New York City.
| Gabrielle "Coco" Chanel |
Taking some of her inspirations from men's fashion and tailoring them for women, Chanel's designs were considered innovative because they allowed women to be freed from the corset.
By 1926, American "Vogue" likened her "little black dress" to the Ford, referring to its popularity as a closet basic. After closing her salon during World War II, Chanel made a come back into the fashion world in 1953, and the Chanel suit, made of tweed fabric and trimmed with gold buttons, became a status symbol.
Her fragrance, Chanel No. 5, has now been on the market for 90 years. According to cultural historian Tilar Mazzeo's book, "The Secret of Chanel No. 5: The Intimate History of the World's Most Famous Perfume," someone buys a bottle every 30 seconds.
| Liz Claiborne |
By 1985, it was the first company founded by a woman to be listed in the Fortune 500. Now the company's retail has expanded to women, men and children's wear, shoes, handbags, luggage, home décor and fragrances.
Its design and marketing umbrella includes other well-established brands: Juicy Couture, kate spade new york, Lucky Brand and Mexx.
According to BusinessWeek.com, Liz Claiborne Inc.'s total revenue in the past year is $2.5 billion.
| Anita Roddick |
More than 30 years later, there are more than 2,600 Body Shops operating in more than 50 countries worldwide.
More than 300 products now carry the Body Shop label. The Body Shop was one of the first companies to ban product testing on animals and was outspoken in other environmental and human rights causes. Roddick sold the Body Shop to L'Oreal in 2006.
