Meet Houston's Reigning Beauty Business Queen
Emily Wilkinson - Houston Business Journal
Janet Gurwitch is the founder and former CEO of Houston-based Laura Mercier Cosmetics.
Janet Gurwitch decided at the age of 40 she wanted to be an entrepreneur. And she was going to build a cosmetic brand around a top makeup artist, even though she didn't know any and despite the fact that she was color blind. And she was going to do it in Houston, even though it was not a hub for the beauty industry. And no one was going to tell her no.
Gurwitch has been a go-getter since she was rejected for a job at Foley's offices in downtown Houston after college, and she hopped on a plane in Mississippi and flew to Houston to tell executives why they made a mistake. She got the job, and today that rejection letter is framed in her home office in River Oaks.
Gurwitch's career took her from Foley's to Neiman Marcus, where she might have been the next CEO if she hadn't quit to found Laura Mercier Cosmetics, a top-selling beauty brand that was sold to Michigan-based Amway for multimillions. Today, she's in the private equity world, where she invests in mostly beauty brands, and says she's looking for the next big thing.
Tell me about starting your own company. My career is three parts. The first part was retail. I came to Houston many years ago for Foley's Department Store and joined their executive training program. I left as a senior vice president and went to Neiman Marcus in Dallas and was executive vice president — that really was the gamechanger. I met so many entrepreneurs from Giorgio Armani to Prada to David Yurman, and it hit me at the age of 40 that I wanted to do my own thing. So I left the corporate world at the top of my career and people thought, "She's crazy." But when I was at Neimans, as great as my life was in that position, I really wanted to do something that was mine. I really wanted to create my own culture and my own brand.
How did you team up with Laura Mercier? I called the beauty editors of Harper's Bazaar, Vogue and Allure, and asked, "Who are the world's top makeup artists?" They made a list for me, but they were mainly men. I definitely wanted a woman, and Laura was one of the few women (in the business) and had a melodic name. I met her and she had never created any makeup, but she knew what she liked. So between the three of us — we hired a consultant from Mary Kay — we went to a lab and created Laura Mercier.
Why did you sell the company? Neiman Marcus Group, which owns Neimans and Bergdorf, bought 51 percent of Laura Mercier in my third year. They had only invested in my company and Kate Spade. So their deal was they had to own 51 percent.
The same family had owned Neimans and Bergdorf for decades, and it never entered my mind they would sell it. In my 10th year, they got a phenomenal offer in 2005 and they did sell. Then Kate and I both had to sell. So I sold Laura Mercierin 2006. But it was a great thing. We sold to Amway, I stayed for two years, and often the entrepreneur doesn't enjoy the next step. I took a year off, went to Italy, rented a villa, did all sorts of fun things on my bucket list.
How did you get into private equity? I remembered that I really loved working. My partners, who had owned Neimans, started a private equity fund calledCastanea Partners. They live in Boston. In 2009, they asked me if I would join them to do another cosmetics company, and we bought Urban Decay Cosmetics. It was a transition for me to be on a board, but I loved it. We sold it in 2012 to L'Oréal. I decided I liked private equity and joined them as an operating partner. Now, I get to live in Houston, which is very important to me, but I go to Boston a lot. Then, we invested in Drybar, and that's been fantastic. It's been so much fun; it's been really disruptive. I'm an investor, as well as my part with Castanea. Today we have 43 Drybars, and our goal is to dominate the top 10 cities in the U.S. We have two shops in Houston, in Uptown and River Oaks, and hopefully we'll have a third in 2016.
What's the biggest mistake you've ever made? I've made many mistakes. I don't know how you can do it without making them. Not in my career, but at Laura Mercier, I did sell 51 percent of my company, not that I had a lot of options. When you need money, you need money. Today it might be easier to get money for a young brand; there is a lot of money for startups. So if I could re-do that, that would be my biggest mistake.
What's your day-to-day? I travel a tremendous amount because I choose to live in Houston. I don't know much about midstream, upstream and downstream, but I love living here. I'm definitely a Houstonian, and you can travel from here pretty easily. I travel two to three times a month. But when I'm here, I'm working on either Drybar or companies I'd like to invest in, doing due diligence. I don't have to just do beauty brands, but right now, the beauty sector's really hot. The synergistic buyers are paying high multiples, so it's something I'm really looking at.
What's been the biggest change in your industry? Obviously the Internet; it's changed dramatically. You can control your message so much better and you don't have to pay for Vogue advertising, which you can't afford as a young brand. Instagram, for example. It's phenomenal. With Laura Mercier, she did Madonna, she did Sarah Jessica Parker. I would be alone in a hotel with them, and all I could do was call my mother and tell her. I never took a photograph. It never entered my mind to even ask them. It's very different now. Today I could have taken the photograph, put it on Instagram, and the customer would know she really was the makeup artist to the stars.
What do you think of Houston's entrepreneurial scene? Houston has a nice entrepreneurial scene, but Austin seems to have a little bigger scene. Because I'm not in the industries that (traditional) entrepreneurs in Houston are in, I'd be more of an outlier. A lot of people call me to look at their business model, and I'm eager to do that, but usually, they're from Austin.
What trends are you seeing in the beauty world? Millennials are much more interested in proper skin care, whereas a few decades ago, we were suntanning and sunburning.
Also, Korean skin care is starting to be very big in the U.S. The Korean marketplace is known for its great skin care, so we're starting to bring some brands from over here.
What's a professional goal you have yet to achieve? I love learning. Private equity has given me the opportunity to work with young entrepreneurs. I would love to continue what I'm doing and invest in consumer products, not just beauty, that have potential for a big euphoric rise. I would love to take one public if I could. That would be fun.
This interview has been edited for length and clarity.
Closer Look: Janet Gurtwitch
Founder and former CEO of Houston-based Laura Mercier Cosmetics; Operating partner, Boston-based Castanea Partners
Hometown: Hattiesburg, Mississippi
Education: Bachelor's from University of Alabama
Mentors: Former Foley's CEOs Michael Steinberg and Lasker Meyer
Greatest achievement: "I created a brand, and it worked."
Looking to invest in: "Another great brand. I would love a Texas brand."
Manufacturing tidbit: Laura Mercier's No. 1 product, tinted moisturizer, was made at a lab in Conroe for many years.
Fun fact: Gurwitch is a minority investor in the Houston Astros.
Advice for entrepreneurs: "Go for it."