The booming beauty and cosmeceutical industry continues to benefit homegrown L.A. businesses.
Kate Somerville, who opened a skin clinic on then-sleepy Melrose Place three years ago and launched an eponymous product line last fall, has sold half her company to San Francisco-based JH Partners LLC in May.
Somerville, who boasts a bevy of celebrity clients like Kate Walsh and Molly Sims, pulls in about $3 million at her clinic. Her products should do between $8 million and $10 million this year.
“It’s definitely been a whirlwind,” said Somerville, who spent more than a year designing packaging for the products, which she has been developing in her work as an aesthetician for years. “I knew if someone really gave me a chance it was going to be a big thing. I’ve always been really tenacious.”
Somerville has been working with one local investor for several years. JH Partners bought the investor out with the deal. Somerville still owns half of Kate Somerville Skin Health Experts and will remain as director of the business.
“I like to say businesses that are growing reach a different level every time the sales triple,” said John C. Hansen, president of JH. “You have to rethink everything. It doesn’t mean you have to change, but you have to look at the people, distribution of capital and prepare to make some changes in your business.”
JH Partners owns interests in and has helped develop well-known brands including Bare Escentuals, Peet’s Coffee & Tea and Design Within Reach. The private equity firm also recently purchased a stake in the La Perla lingerie company.
Somerville also recently inked a deal for her products to be used at the Beverly Wilshire’s spa. Her products are already used and sold at the Four Seasons Hualalai and more deals with the company hotels appear to be in the offing. Somerville products will also be used at the Trump International Hotel and Tower when it opens in Chicago.
Her products are currently sold on the cable channel QVC, through direct response, on the company Web site and out of the clinic. The first big push will be for a retail rollout, although definitive agreements haven’t been announced yet.
“I definitely think we’ve got every single retailer kind of talking to us right now,” she said. “We don’t know where we’re going yet.”
Hansen said the biggest problem with a mass retail rollout is preserving the one-on-one attention that’s built her brand.
“Her products require some education,” he said. “I’d like to see her distributed in a channel that allows her to continue to educate the customer.”
Spreading Religion
True Religion Apparel Inc. last week opened its seventh retail store in the Houston Galleria. The company, which also operates two outlet stores, began its ongoing retail rollout about 18 months ago.
“We are extremely pleased with the reception of our stores thus far,” said Jeff Lubell, chief executive of True Religion. “We now have a greater opportunity to offer our customers the expanding line of denim, denim-related apparel and our entire collection of licensed products.”
The retail strategy, which has worked exceptionally well for cross-town rival Guess Inc., has yet to pay off for True Religion. Eric Beder of Brean Murray Carret & Co. said it’s just a matter of time.
The company has announced partnerships for a boatload of licensed products in the critical crossover to a lifestyle brand. Those revenues have yet to be realized, as most of the products haven’t yet been unveiled.
True Religion has struggled this year, along with most other high-end denim companies. The pricey market has struggled in the absence of a new jeans fad.
“You have a whole range of people looking for a revelation,” said Ilse Metchek, director of the California Fashion Association. “The trend in itself is still trying to figure out if it’s a high waist, pencil leg, dark or colored. They still haven’t found the hot button.”
True Religion has been criticized for failing to change its denim styles fast enough to keep up with increasingly fast fashion. But even on traditionally impatient Wall Street, more solid sales have pushed the stock up from a $15 trough in May to the $22 range, where it traded last week.
Staff reporter Emily Bryson York can be reached at (323) 549-5225, ext. 235, or at
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