Classic Cosmetics Inc., a cosmetics manufacturer and private label services company, is expanding its portfolio this year with the launch of a new online private label business and a new skin care line. The Chatsworth-based company was started in 1988 by Ida Csiszar, who worked as a research and development chemist for Max Factor. It specializes in making private label cosmetics for some of the world’s largest beauty companies. Next month, company officials say Classic Cosmetics will extend its reach to target small businesses and entrepreneurs with a new business-to-business website. Through the website, small businesses will be able to purchase eyeshadows, foundations, lip glosses and other products from a catalogue of almost 90 products and place their own brand name on it. The Classic Cosmetics site also will display images of the company’s operations and laboratory. “The (online) business is more for the small guy who doesn’t want to go into the research and development direction but wants to get into their own niche market,” said Stewart Townson, financial controller at Classic Cosmetics. For years, the company has received inquiries from entrepreneurs hoping to utilize the company’s services to build a beauty business, though recently demand for private labeling among the small business sector has increased, Townson said. After witnessing a competitor’s success off of a similar venture, Classic Cosmetics decided to “attack the market” and display what the company had to offer, he said. Kim Piere, director of sales and marketing for the company, said she anticipates a high volume of clients, as the company receives about 50 to 75 inquiries a day for a product catalogue. Prices for the items will range from $8 to $15, she said. In the coming months, the company plans on hiring an additional two or three employees to assist with the new business, Piere said. Townson declined to provide revenue and other financial information for the private company, but said Classic Cosmetics orders increased by 38 percent in 2011; the company is aiming for a 30 percent increase in orders this year. The website will be a major component of that growth goal, he said. Daniela Ciocan, director of marketing for Cosmoprof North America, a business-to- business trade show, said the beauty industry is attractive to entrepreneurs and small businesses because of its healthy profit margins and the low entry costs. The average profit margins on beauty products are a healthy 30 to 50 percent. “If you have a cool idea like a unique application system or marketing idea, it’s fairly easy to parlay that into a business,” Ciocan said. The beauty industry also has a loyal client base. While the economy may have affected consumer spending on luxury cosmetics, they continued to purchase more affordable items at mass market retailers and drugstores such as CVS/Pharmacy and Walgreens, Ciocan said. This year, luxury makeup dollar sales saw an uptick during the first 10 months of 2011, according to a report by market research company, The NPD Group. Sales in U.S luxury makeup increased 8 percent to $2.8 billion this year and units sold also grew by 5 percent to 117 million. Pam Busiek, president and CEO of Independent Cosmetic Manufacturers and Distributors, a Palatine, Illinois-based association for cosmetic companies, predicts the industry will see a wave of innovation from small businesses and startups this year. “Small businesses that are nimble and quick tend to do well,” Busiek said. “Much of the cutting edge ideas come from small businesses.” Classic Cosmetics is planning a bit of its own innovation this year as it gears up to enter the skin care sector, said Csiszar, the company’s president. She said the move will cater mostly to the company’s larger clients. Plans include adding lotions and skin creams to the company’s portfolio of product offerings by the end of the year. The company also is looking into anti-aging serums, moisturizers and eye creams, Piere said, noting the items of the line have not yet been confirmed. As for the future, Csiszar said she has her heart set on launching her own cosmetics line. The project was put on hold to make way for the new online business. Even after 40 years, retiring is not an option, she said. “I’m going to die here. I’m not a work horse. I just truly love doing this.”
