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Thursday, Mar 28, 2024

First Blush

John Maly, owner and president of Mirabella Beauty Products, is giving his company a makeover. The former certified public accountant is expanding the reach of the Valencia-based cosmetics manufacturing company by moving internationally. He’s also revamping the product line and changing sales tactics. Maly’s involvement with Mirabella sprang from his ownership of Maly’s West, a salon distribution company that he grew from revenues of $2 million to $200 million over 18 years. When Maly still owned the distribution company, a spinoff of a family business, he bought half of Mirabella in 2005. In 2007, he bought the other half of the company from its founder. Earlier that year, he sold Maly’s West to L’Oreal, the distributor’s biggest client. Having previously hired others to handle the daily management of Mirabella, Maly decided to step in early last year and do it himself. Since then, he has focused on making some big changes at the company. Mirabella primarily sells its products to distributors that sell to salon professionals, who then sell to their customers. Maly claims Mirabella Beauty Products is the leading company in the salon-focused cosmetics industry. In March, the company’s products will be sold in 1,100 salons. Since Maly bought into the company, sales increased from about $1 million in 2002 to about $6 million in 2009. While revenues dropped to about $5 million in 2010, Maly projects they will rise to $6.7 million in 2011. Question: What led you to invest in Mirabella Beauty Products? Answer: (Maly’s) had a cosmetic line that wasn’t doing well in our stores and with our salons. We were looking for a new cosmetic line, and a friend of mine introduced me to Mirabella. … He had had it for a year and was doing well with it. He was a friend, and I said, “Sure, we’ll try it.” And so we did, and we were very successful with it. We kind of outgrew them. So what happened was the owner of that company, her husband called me and they basically had to go out of business or they’d have to sell part of it. So I invested in the business, bought half the business. That was six years ago and we moved it to California (from Utah). We were a much larger company and had more operational experience than they had, so quickly we were able to ramp up the inventory and ramp up the sales and marketing efforts of the business. We expanded Mirabella from just the western United States to the entire country over the next five years to all the distributors that we had relationships with. Q: I understand that under your leadership, the company launched its first international venture early last year. Why did you choose to go this route? A: There was a distributor, the manufacturer in this salon industry called Sebastian and they discontinued their cosmetics (line) called Trucco. It was sold internationally, so there’s a lot of distributors around the world that are looking for a cosmetics line to replace their Trucco. There was one of those distributors in Spain. They looked at our brand and really liked it, and so we started doing business with them. We’re trying to really get our international business running. Q: What plans do you have for additional international growth for the future? A: We are going to the largest beauty show in the world in Bologna (in Italy) in March, and we’re hoping to pick up distributors there. All the distributors in Europe will be there. It’s a big show. Paul Mitchell was one of my big product lines at Maly’s. I have a great relationship with them and they were willing to make an introduction to all their international distributors. So, we have several of those people that are interested in our brand. … We’re literally going for whoever’s interested in us. We are putting ourselves out there, and whoever bites, we’re fishing. Q: What other modes of expansion are you pursuing for the company? A: We opened a new distributor in the spa industry. … This distributor is the largest distributor in the country selling to spas. Universal (Companies) is their name. So they’re going to take our product on, and that’s a huge opportunity for us. They launch us March 1. We also are going with a new open sale unit for our products. The way our salons do it now is they basically have a tester unit and, just like a department store, below is the product. So if you’re a client, you can’t walk up and pick the product up yourself. You have to wait for the person in the salon to service you. Sephora and Ulta and people like that have changed cosmetics dramatically so that now you walk in, you want a lipstick, you can pick up the lipstick yourself and go buy it. So that’s what we’re going to. Q: Why the change to the open sale model? A: Right now we believe that one out of every five customers that walks up to a tester unit will actually wait for someone to come and service them. But four out of five will walk up to the tester unit, (and) if no one comes up, they won’t buy anything. In an open sale unit, we think we’ll get all five of those five customers to buy from us, so we think it will dramatically increase our sales in our stores and our salons. We’re rolling it out over time. Q: What changes has the company made with its social media marketing efforts? A: Our products are now available on the Web. And the fun thing is our clients, if they want on our Web site, can also see our newest collection. They can watch videos and see exactly how to apply the products. At the same time, we did YouTube, and of course our Facebook. The fact that we’re doing e-commerce is a new opportunity for us. Q: How do you keep your product line competitive? A: In August 2009, we reformulated 60 percent of our line to make it more natural, to use more organic ingredients. We did that big change about a year and a half ago, but we keep upgrading. We did the same thing to our eye color right now. That launches in March. We discontinued 23 shades and came up with really interesting, pretty colors, and then we’re doing the same thing with our cheek color. Q: Can you explain Mirabella’s business model? Why is it successful to cater to salons as opposed to consumers directly? A: When you look at mass (markets), and when you look at department stores, the competition in those locations is so fierce. But (for) the salons, really it’s not that fierce. The interesting thing is we believe that the salons are the perfect place for cosmetics to be sold. Right now the average woman is getting her hair done and the lady takes the cape off. The first thing you do is you want to put on your lipstick and put on your foundation. The salon should be doing that. That should be part of the service that you offer, and so that’s why Mirabella fits perfectly in this salon environment – because we’re hoping to teach our salons to do that. We have 120 educators around the country that do just that. We actually go into their salons, and do classes. Q: What makes your company stand out from your competitors? What is its niche? A: We go through distributors, and we believe that going through distributors allows our salons a lot better support. There’s somebody that comes into their salon every two weeks from the distributor to check on them, make sure they understand the product, see the newest promotions, all that sort of thing. Also, distributors have stores, so if a salon runs out of a product, they can just go down the street to their local distributor store and buy the product. No one else does that. John MalyTitle: President and OwnerAGE: 47EDUCATION: Bachelor’s degree in accounting from Indiana University in BloomingtonMost Admired: I’m a Christian, so I would say Jesus ChristCareer Turning Point: Selling Maly’s and opening the next chapterPersonal: Married, three sons

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