Beauty Store Business

MAR 2017

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26 March 2017 | beautystorebusiness.com Shortly after meeting David Stearn, cofounder and chief executive officer of Derma E, and the company's cofounder and chief formulator, Linda Miles, D.O.M., it becomes clear these two successful entrepreneurs are genuinely passionate about what they do—and are really excited about bringing their effective natural skincare products further into the beauty space. With a bubble of posi- tive energy surrounding them, they arrive at our Van Nuys office sharp, atten- tive and ready to share their nearly 80 years of combined business experience. However, the talk is not all business, of course. As our managing editor, Breanna Armstrong, applies their makeup, we learn about their active personal lives too. Stearn talks about his recent two-week stay in Hawaii, while Miles, a doctor of oriental medicine (D.O.M.), dispenses herbal medicine advice to our art director. She also tells us about riding motorcycles and waking up early to feed her horses. It seems that these two business owners have struck that rare work-life balance amidst running a thriving business. Perhaps they have arrived at this place because Derma E's journey and success has been a slow and steady ascent over decades—33 years to be exact—marked by several growth spurts along the way. For the beauty retailer, if you are looking to build your natural skincare offerings, Derma E is a leader in this regard. Already available at Ulta Beauty and in mass beauty outlets, Derma E is now focused on building relationships with indepen- dent beauty retailers. Having started out establishing their brand firmly in the natural products world with independent natural health retailers, it's a familiar place for them and they have dedicated staff, education and resources to support their brand in ways that other natural brands do not. And unique to Derma E, the brand is ethical—in the ingredients it uses, its choice of packaging and the causes it supports—what they call "eco-ethical." But to understand how this natural brand came to be what it is today, it's important to look at its history. THE BEGINNING The makings of Derma E really began more than three decades ago, after David Stearn and his father, Sam Stearn, sold their successful natural skincare business, Nature's Family, which they started 10 years earlier, at a time when health foods and health products first gained traction. Linda Miles had worked for their company as an 18-year-old sec- retary still in college. "When they first started that company, the reason it was successful was because they both cared that the products were efficacious. If you can make a product that works, you have a customer for life," Miles says. It's an idea that Stearn and Miles carried forward in their venture together. "After my father and I sold the company, Linda and I looked at each other and said, 'This is really a lot of fun, let's come up with a skincare product and concentrate on natural ingredients, quality and an industry that will appreciate it and focus solely on that.' So that's how we got started," David Stearn recalls. It was 1984. They focused on the natural products industry and finding distribution in independent health food stores and health retailers. They had success. And that success stemmed from the fact that they started out with an effective natural product featuring a well-studied antioxidant offered at an affordable price point. Antioxidants and other key botanicals and proprietary ingredients have since continued to be what makes Derma E a leading natural skincare line that resonates with natural health and beauty consumers alike. USING ANTIOXIDANTS PAYS OFF As chief formulator, Miles subscribes to the free-radical theory of aging, which pos- its that aging is the result of free-radical damage to cells over time, also called oxidation. The body produces antioxidants to neutralize free radicals and protect cells from damage, but experts say, not enough. Therefore, getting antioxidants topically or from the diet protects against cell degeneration—including skin cells. Derma E focused its first product on quelling free-radical damage. "If you look at any of the theories of aging, it all comes back to free-radical damage. So it makes total sense to focus on antioxi- dants that actually shut down the free- radical damage," Miles explains. And if you look at Derma E's name, you might be able to guess the antioxidant they first included was vitamin E: Derma (for skin) and E (for vitamin E). "Vitamin E was the original, marketable, under- stood antioxidant," Stearn explains. The first product was a jar of vitamin E-rich moisturizing cream. People were amazed at the results it had on their skin, and Derma E was in business. Through education and adding inde- pendent health retailers, store-by-store, Derma E's distribution and sales con- tinued to grow. "We figured the more distribution we got, the sales would take care of itself," Stearn says. And that's exactly what happened. Miles continued to formulate new products featuring well-studied antioxidants, and the com- pany grew slowly and steadily. INVEST IN QUALITY CUSTOMERS FOR LIFE Stearn is a mild-mannered leader who leverages common sense to the company's benefit. He likes to share stories and anecdotes to illustrate business concepts. He relates the timeless Chevrolet/Cadillac business story to us, which originated from a book written more than 25 years ago. At a certain time in General Motors history, the cost difference between manufacturing a particular model of Chevrolet and a luxury Cadillac model was only $300, according to the story. Of course the Cadillac retailed at a much "If you look at any of the theories of aging, it all comes back to free-radical damage. So it makes total sense to focus on antioxidants that actually shut down the free-radical damage." — Linda Miles, D.O.M., Cofounder and Chief Formulator Image courtesy of Derma E French maritime pine (left), the source for Pycnogenol, and activated coal (right)—two key "actives" in multiple Derma E formulas.

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