The cosmetics industry has always been intrinsically linked to celebrity. The beauty houses spend millions securing the latest en vogue star to head their marketing campaigns. Likewise, the growth in celebrity branded fragrances has been highly lucrative over the past decade. But while Kylie and Britney may well have made a tidy sum from their offerings, attaching credibility to a new cosmetics brand is a tough challenge, and one that’s vital to get right if you expect any longevity to its success. It’s something Grace Fodor and renowned make-up artist Jemma Kidd placed at the centre of their business plan when launching the Jemma Kidd Make Up School range.
Building on the success of her well-established make-up academy in Notting Hill, Jemma joined forces with Grace to create a brand which put education at its core. Jemma’s reputation as one of the world’s leading make-up artists was already well cemented which meant the whole company brand could be centred around the professional talent and expertise she had to offer. “Rather than set up a business that merely designs, retails and manufactures cosmetics, we’ve really focussed on the intellectual property of the brand,” says Grace. “We’ve got step-by-step classes in every product. It’s about simplifying cosmetics and understanding the relationship real women have with their make-up.”
Grace began working with Jemma through a prospective deal with Boots. Having run and sold her own consulting business she brought two decades worth of branding and communications experience to the project. “Boots commissioned me to do some research on possible talent-based brands that it could launch in its stores and Jemma was one of them,” she explains.
Going it alone
Grace recommended the Jemma Kidd brand to Boots but after much deliberation the pair decided to develop the range on their own. “One of the fundamental reasons for not doing the deal with Boots was that we saw the business as an opportunity to create a new global cosmetics brand. For us to achieve that, we needed to extend our distribution possibilities.” Despite the decision not to launch under the Boots umbrella, the pair still kept the chain on board with a deal for the company to stock the range. The agreement was in place from the outset which meant the company had its first stockist before they even put together a business plan.
“It all happened very quickly,” says Grace. “From a blank piece of paper to developing every single product took 10 months. Having a distribution agreement in place made it much easier to raise the money because we were raising it against an opportunity rather than a concept.”
A far cry from the organic growth of Grace’s consulting firm, the business of manufacturing cosmetics is a cashflow nightmare. Supplies and the production process are almost all paid for before the end result can even hit the shelves which means a massive outlay is needed before a single penny of revenue comes in. Grace and Jemma raised an initial £500,000 from friends, family and personal contacts to fund product design, development and stock. At the time of launch, in 2006, the team consisted of just three. “We did everything ourselves right down to writing the copy for the packing and all the step-by-step guides. It was 24 hours a day, seven days a week.”
The Jemma Kidd Make Up School range launched in Selfridges and Boots that year and by spring it was in Bergdorf Goodman in New York. At the end of 2006, Jemma and Grace were supplying premium end department stores in LA, San Francisco, Australia and Hong Kong. “The global ambition was always in the business plan, it just happened a lot quicker than anticipated,” says Grace.
Guarding the brand
As the popularity of the brand grew, so did the requests from retailers, which presented its own interesting dilemma. The high-end department stores were requesting a premium extension to the range while Boots wanted funkier cheaper products. The issue led to one of the toughest decisions Grace and Jemma have had to make so far – to remove the range from Boots. “We had this pull at both ends and it worried me,” explains Grace. “When you’re developing a consumer brand you have to do everything you can to protect and manage that value. We lost 65 stores and £3.5m at retail, but it was all very deliberate. Brands that get their distribution wrong or over licence themselves pay a price. To guard a brand you need continuity. We were, and still are, a very embryonic company and we just couldn’t risk confusing the brand.”
Back home, Boots was replaced with Space NK but in the meantime American chain Target was interested in working with the company. Realising the existing range wasn’t quite the right fit for a store Grace describes as “Asda meets Debenhams”, a diffusion range was launched. The JK Jemma Kidd line is a high-fashion, cheaper range aimed at 18-30 year-olds. The range was launched in 1,600 Target stores in 2008 and over in the UK it’s now sold via online fashion outlet ASOS. The move allowed the original Jemma Kidd Make Up School range to stay positioned in the premium environment while the JK line gave the company the mass distribution it needed to start making a profit.
The company will record its first year of profitability in 2009 - £1.3m on revenues of £5m and retail sales of £17m. Despite the recession hitting consumer confidence hard this year, the Target deal was just too potent to allow a dip in the company’s fortunes. Shoppers may be spending less but going from 60 to over 1600 stores has given Jemma Kidd Make Up School Stateside gravitas. The JK range is also about to launch in Mikyajy, a Middle Eastern beauty retail chain which will eventually add another 177 stores to the mix. But despite growing demand for the products the issue of brand protection is still top of Grace’s priority list.
“We’re very niche and trying to find accessible mass retailers is difficult. They all want to have the latest brand exclusively so whoever we partner with means we’re excluding someone else. We’ve had a lot of attention over the past few months which is very exciting but we’re weighing our options before we make any decisions.”