Limited color choices prompted Essie Weingarten, founder of Essie Cosmetics Ltd. and manicure enthusiast, to start her own nail polish line.
"I loved getting my nails done as a little girl," Weingarten (pictured) told an audience at ACG New York's Consumer Brands Conference, held at the JWT building in New York on Oct. 23. She was joined by husband and former Essie CEO Max Sortino, to talk about the brand's development and eventual sale to L'Oreal (EPA: OR) in 2010.
Weingarten, who founded Essie in 1989, began with a 12-color line of polishes that she distributed in person to salons in Las Vegas. "Every color had a whimsical, sexy, flirtatious name that women wouldn't forget," says Weingarten. The clever names live on. For example, the fall 2014 collections a cranberry red named, “Dressed to Kilt” and a chocolate brown called “Partner in Crime.”
When Sortino came on board, he saw that the company needed to expand distribution channels and hire sales reps. By the end of the '90s, the company grew to have between 60 and 70 salespeople.
The key for Essie was always maintaining the consistency of the brand. "If you show them something that is yellow one day and green the next, you're not building anything," Sortino says. The company said “No” to consultants who wanted to change its distinctive, white-capped bottles to take up more shelf space, and selected colors carefully, Weingarten and Sortino said.
The company's growth sparked interest from many private investors, who Weingarten felt generally were not bringing enough to the table. L'Oreal called for the first time in 2005. Deal negotiations, which went on for more than 12 months, ended without a transaction. Sortino says he knew that selling to a private equity firm was not for Essie. The company, since it didn't have cash flow or internal problems, was only going to seriously consider a sale to a strategic.
Even in 2008, the company was still growing at double digits. "There was no reason to sell the company," says Weingarten. But when L'Oreal called again in 2009 straight to Essie's office (causing quite the stir among tight-knit company's employees) - the two parties were finally able to resolve matters and close a deal in April 2010. Having L'Oreal as the buyer gave the company huge expansion options, Weingarten and Sortino say.