The Merle Norman Studio in the bustling Del Amo mall in Torrance is not the familiar plain-wrapped cosmetics store that dots the shopping landscape. The store--modern, open and airy with pale wood and soft lights--is sporting the new look of Merle Norman. Gone is the dated stainless steel of the '70s, the last time the company made itself over.
The new prototype store is attracting lots of young customers and holding its own against the competition like the new MAC store around the corner. Surprisingly, teenagers, eager for skin-care products, account for most of the new business. Manager Melinda Fox says teens tell her, "I've never heard of you. How long have you been here?"
Like, 68 years. But Merle Norman, like other older cosmetic companies such as Avon and Helena Rubinstein, is having to retool to stay competitive with such young upstarts as Stila and MAC and cosmetics superstores like Sephora.
While Avon has gone upscale with a store in Trump Tower in Manhattan, and Helena Rubinstein has moved into funky Soho in New York, L.A.-based Merle Norman has remained true to its original formula--franchise outlets with personal service. In the next few years, all of the 2,000 studios throughout the United States and Canada will undergo a metamorphosis to look like the company-owned store in Del Amo that Fox hopes to buy next year.
Merle Norman is admittedly a tiny player in the massive $6.2-billion prestige cosmetics, fragrance and skin-care business. It went public in 1969, but the family bought it back four years later, in order to stay true to its original mission: to provide cosmetics to women primarily in small towns. In a time of self-service at drug stores and impersonal service at department stores, Merle Norman is still about free-standing stores, service and relationships.
"Merle Norman is highly underrated," says Stevie Wilson, contributing editor to beautybuzz.com, a Web site that covers cosmetics. "The quality is as good as some department store lines. The difference is that the Merle Norman sales staff is highly trained in the products."
Merle Norman Chief Executive Arthur Armstrong hates the cliche that the company is getting a face lift.
"We try to evolve, not change," Armstrong says. "We're still a deep believer in the underlying philosophy." Make a good product, find good franchise operators, let them be independent and treat employees as if they are family.
Still, the business is about makeup. A few years ago, Merle Norman introduced younger, fresher color collections to be more inclusive for different ages and tastes.
"What I saw for fall was wonderful," says beautybuzz.com's Wilson.
The chain's strength is in its individual store owners, who set the tone for their markets. Says Armstrong, it's the single mother in a small town in Texas who is sending her son through college. It's the store owner in North Carolina who celebrated her 35th year with a street-closing ceremony hosted by the mayor.
"In some parts of the country, she may be the richest woman in town," he says.
The highest-selling studio is in Birmingham, Ala. Dallas is the biggest market. Because the company is private, it's hard to measure profits, but it is safe to say that the studio owners are successful enough to find the business worthwhile. Operators buy products from the company, which provides free training, information and advice.
In some locations, the studios are the only place to buy makeup besides the grocery store, drugstore or Avon lady. Says Armstrong, "Our competition is the Mary Kay lady driving around in the pink Cadillac."
Although the small-town market has been the company's bread and butter, the parochial image is something the company has had to fight. The company's new message is, "This is not your mother's Merle Norman," explains the chief executive.
Customer Linda Whittington, 51, has done her own campaigning. The Redondo Beach administrative assistant has been using Merle Norman products, almost exclusively, since she was pregnant with her son, John, 26 years ago. Whittington tried talking daughter Patricia, now 16, into the products two years ago when she began to use makeup.
"She refused," recalls Whittington, who was accused of using "old lady stuff."
Slowly Del Amo studio manager Fox cajoled Patricia into at least trying the skin-care products and a few lip colors.
Today, Patricia uses only Merle Norman. What's more, she brings her girlfriends to the Del Amo mall for prom make-overs.
"They think she's spoiled rotten, and she is," says Whittington, who gladly spends the equivalent of department store prices on her daughter's Merle Norman cosmetics and skin care.