On this episode of Yahoo Finance Presents, Bobbi Brown Cosmetics founder Bobbi Brown joins Yahoo Finance's Emily McCormick. She discusses launching her new business, Evolution_18, the history of her company and its sale to Estee Lauder, growing her new company during a pandemic, selling products through retail channels, her thoughts on digital sales channels, and her future plans.
EMILY MCCORMICK: Welcome to this episode of "Yahoo Finance Presents." I'm Emily McCormick. And I'm so excited to bring on our guest today, Bobbi Brown. She's the founder of Bobbi Brown Cosmetics and the wellness line, Evolution 18, a best selling author, and world renowned makeup artist. Bobbi, it's great to have you with us.
BOBBI BROWN: Nice to meet you and talk to you also.
EMILY MCCORMICK: You have really done it all when it comes to the beauty, health, and wellness industry. You started out as a makeup artist yourself, launched your own cosmetics line, sold that business to Estee Lauder, and grew Bobbi Brown cosmetics into a billion brand. You're on for more than two decades, launched a wellness company, even opened a hotel and recently filmed a MasterClass series. I'm wondering, as you look at each of these ventures, what guiding principles and experiences really informed each new turn in your career?
BOBBI BROWN: Well, I'm so fortunate because I am not afraid. I am very naive. I don't think things won't work out. And I love trying what I don't know. So I never had a clue what a business was. I learned on the job. And I'm someone that needs to keep going. I just need to keep trying these things. I guess they now call us serial entrepreneurs.
EMILY MCCORMICK: When you think about these new things that you've been trying, one of those was launching Evolution 18, your supplement line. Did you find that it was easier or, in some ways, harder to actually start another business after already having built Bobbi Brown Cosmetics and having that pressure of previous success?
BOBBI BROWN: I honestly think it was easier because of my experience, because I knew what I was doing finally. I didn't know in the beginning. But that said, I launched an indie business without any funding and a very small team. So going back to the basics was interesting for me and, of course, frustrating for someone that was used to having teams of people to get every idea implemented.
EMILY MCCORMICK: Thinking back to Bobbi Brown cosmetics and the sale that took place back in the mid-1990s, what went into that decision to turn over a brand that bore your name to Estee Lauder? And what advice would you give to an entrepreneur presented with a similar exit opportunity?
BOBBI BROWN: Well, I did not turn it over. We sold the company after four years. My husband and I, we had another couple partners. We sold the business. I was a young mother. I was still a working makeup artist. And I was promised to have complete autonomy at this company.
So I stayed as an employee for 22 years, while I also grew the business and my family. And the reason we sold the company is because we knew we could not grow the company at the same speed if we did it alone. But I have no regrets. But I could not be happier that I am now an independent and I am the boss again.
EMILY MCCORMICK: That's right. And as the boss, what is has just been like being the CEO of Beauty Evolution, leading Evolution 18, and being a leader, these past few months especially during a pandemic?
BOBBI BROWN: Well, it's certainly been interesting. Where I launch Bobbi Brown cosmetics at Bergdorf Goodman, we launched Evolution 18 at QVC. And now, we're in Walmart. We also have a direct-to-consumer site.
And what I discovered, being a beauty industry maven, and also a makeup artist, and now a health coach-- I've always believed that what you put in your body has the biggest effect on how you feel, but also how you look. So this is not a beauty company. But it is a company that helps people from the inside out. And honestly, what I learned during this pandemic is I don't care if you're home, I don't care if you're back at work. Everyone wants to feel better. And that is the secret of everything, is feeling good.
EMILY MCCORMICK: What have sales, demand trends, and growth been like at Evolution 18? Because I think, hearing from some other closely held as well as public companies, it seems like this industry that you're in right now really is seeing a boom in demand just because people are being more conscious about their health, given the state of the world right now.
BOBBI BROWN: There definitely has been different challenges, but also different opportunities. So when the pandemic first hit, all of a sudden things got really quiet. We didn't know what was going to happen. And then when people got used to life as we know it now and we turned our marketing to market to people that are at home, it grew, both in-store at Walmart, online, and our direct-to-consumer. So I think that the opportunity is for any entrepreneur to really be able to move quickly, and to be able to realize that, in this day and age, we're going to different things, different time. You've got to speak to the people and understand what they're going through.
EMILY MCCORMICK: Have there been any products in particular with Evolution 18 that have been doing, especially well, especially over the past couple of months?
BOBBI BROWN: Well, I think our collagen powder does really, really well because everyone-- that's a new product. It's not new in our lives. Our grandmothers made chicken soup. And that was the collagen. But now, it's in a powder. So that's been something that people are realizing how easy it is to put into a shake or your coffee. And then we have beauty gummies. And we also have a product called Debloat, which is when you feel a little bit swollen from whatever it is, it helps. And people want things that will help a problem. And digestion, wellness, hair growth, beauty-- they're pretty simple fixes.
EMILY MCCORMICK: And you mentioned this a bit as well, just launching Evolution 18. Originally, direct-consumer, now also still going through your own website, but also through retailers like Walmart and even Kohl's, I saw, actually sells Evolution 18 as well. And what made you decide on these companies to sell the brand through?
BOBBI BROWN: Well nothing in my life is deciding things. I entered Bergdorf Goodman because I met a cosmetics buyer at a party. And that's how I entered Bergdorf Goodman. And I entered Walmart because they reached out to us, and the same thing with Kohl's. I mean, I'm strategic, but not that strategic.
And it was interesting to me. Walmart has such a giant platform that I'm able to reach so many more people not just on selling products to them, but also as someone that likes to empower people, to reach people, and to teach them the importance of eating good food, taking better care of yourself, and being able to care for your families when you feel better in your body.
EMILY MCCORMICK: Who actually reached out to you from Walmart and Kohl's? I mean, what would those conversations actually look like? And what did they say to really try to convince you to go through their companies?
BOBBI BROWN: Well, it was certainly an email. I wasn't the one that answered. Someone on the team did. And then there was someone else on my team that runs the businesses that have the conversations. And we were excited about the opportunity. And as someone that also does things differently, I love being able to offer an affordable product to people because I know that people right now are having challenges.
So you know that really excited me. And certainly, the scale excited me. And we pretty much have two tiers. We have the direct-to-consumer, which is a little higher price and more formulaic. And then we have the simpler formulas that we're able to offer it at a better price.
EMILY MCCORMICK: I think that is what's so interesting, just looking at Evolution 18-- I mean, sold through big box retailers, many of the products that I saw were under $20 per unit. And when you think back to Bobbi Brown Cosmetics, those products available at companies like Nordstrom, Neiman Marcus, Bloomingdale's-- Bergdorf Goodman, of course, being one of the first department stores that you actually sold product to-- many of these department stores have been struggling, even before 2020. I mean, we had Lord & Taylor filing for bankruptcy earlier this year. So with that in mind what do you personally see as being the future of retail?
BOBBI BROWN: Well, the new consumer, or consumer behavior-- where do people buy things? They buy it online. We're also launching an Amazon store in the next couple of weeks. People buy things that are simple and easy. And I don't remember the last time I've personally been in a store.
So I do go, unfortunately, to the post office to return my boxes that don't fit me. But just like anyone else-- and I'm getting really good with cutting down boxes. I feel bad how many boxes I have lined up. But I just think people are shopping differently. And hopefully, one day, people will go back and stores. But I'm excited to be where our customer is.
EMILY MCCORMICK: Aside from the upcoming launch on Amazon, do you have any new channels that you're excited to launch Evolution 18 products through?
BOBBI BROWN: No, we pretty much have a very small, and a very young, and a very willing team. So we're doing a little bit at a time. And for me, it's really important to be able to do what we do well and make some changes. We've had some issues with our best selling products being out of stock, waiting for that to come in. So honestly, it's an interesting opportunity to be able to do things quickly because, when one product's not available, we're able to shift and say, OK, let's bundle those together. Let's do these.
EMILY MCCORMICK: And that's interesting. That's something that a lot of retailers have really been speaking about is inventory and just being able to keep up with demand, especially right now at. I'm wondering, what kind of challenges did you see-- you kind of alluded to those just now with that answer. But I mean, what products were you selling out of? And how did you alleviate some of those pressures?
BOBBI BROWN: Well, we have been out of our vanilla collagen tea for a couple of-- I would say, almost two months. And honestly, I'm not even starting a waiting list because I think we should get it back within a month. But what it did, it gave us an opportunity to create other flavors.
So we just approved three other flavors. Hopefully, we'll get them in before the holidays. So fingers crossed. And we have to be flexible. And I know a lot of people in business are not able to be flexible, especially if you have things you promised to retailers. We are able to be a little bit more flexible, which is good.
EMILY MCCORMICK: Pivoting a bit to just speak about your experience as a makeup artist yourself, I'm wondering-- you launched your career well before the heyday of YouTubers, online makeup gurus, and now Instagram and TikTok stars who really have been trying to build their own names on these online platforms. And I'm just wondering what you think of this whole influencer phenomenon that we're seeing now, and whether it's made it easier or harder to grow to the level that you have in your own career because of the accessibility of the internet.
BOBBI BROWN: Well, I think both. I think, first of all, it's easier because you have a platform to reach people. When I launched, if I wanted someone to know about something, I had to do an interview with a journalist. Or eventually, I became the beauty editor of the "Today Show." I did have that platform.
But today, you could sell your products on Instagram. You can go on Etsy. There's so many things you could do. I think the challenge for a lot of these young entrepreneurs that want to get noticed is sometimes, what is your point of difference? And by the way, if it's growing so fast, just this huge growth, how do you know really what to do? How do you learn? Things that happen so quickly have only one place to go. So I think that building businesses slowly makes the biggest difference.
EMILY MCCORMICK: Are there any individuals or brands that are up and coming in particular that you really have your eye on and that you think are doing compelling things right now in this space?
BOBBI BROWN: No, there's so many. And I am someone that supports other beauty founders. And even if we have very different tastes, very different aesthetics-- a friend of mine just launched a company. His name is Mario. It's Makeup By Mario. He has been Kim Kardashian's makeup artist. He has just launched this week. And I've been following him and encouraging him.
Victoria Beckham has a line of cosmetics. And she's going back to talking about posh with her new lipsticks. And there's many more. So I think it's interesting. And I think, for someone who believes in the power of being an entrepreneur, I love and I learn watching other entrepreneurs.
EMILY MCCORMICK: And just looking at where Bobbi Brown Cosmetics is now-- I know you departed from the company several years ago now. But what do you think about where Estee Lauder has taken it? Is there anything that you would change about the direction that you've seen unfold from the outside now?
BOBBI BROWN: I have to be honest. It's been four years since I've left the brand. And I don't really look at it. I don't go backwards. I'm someone that goes forward.
I wish them well. I hope what they're doing is working. I don't know. I honestly have nothing to do with anyone at the company. And people still, on Instagram, reach out to me-- why did they discontinue this? Why did you do this? How do I get this back? And so I'm constantly telling people, I'm not there anymore. And I'm someone that believes that, once you walk away from something, it gives you an opportunity to do something else.
EMILY MCCORMICK: And now, I'm looking at the new ventures that you are working with, do you envision a similar exit for Evolution 18? Or do you plan to keep it more closely held, potentially grow the business internally with the team that you have now? What's your vision for this company now?
BOBBI BROWN: Well, it's such a baby brand. And I always tell entrepreneurs, creating a brand is like having a baby. You have this baby. You've got to figure the baby out. You have to nurture it take care of it.
And then you have to just teach it things and grow. So I am not looking to exit this business. I have been contacted-- we are self-funded. I've been contacted by many, many people that want to invest and help us. And at the moment, we're not looking for it. But we're open to the right partner at any time.
EMILY MCCORMICK: And Bobbi, before I let you go, I have to ask, any new projects we should know about coming down the pipeline? What are you most excited to be working on right now?
BOBBI BROWN: Well, I am launching my second season of a podcast with iHeart called "Beyond the Beauty." And I'll be talking to makeup entrepreneurs and like-minded people. I'm really excited about that. And the hotel, believe it or not, is growing. We've figured out a way to have weddings in the parking lot, and really working to make sure people are safe. And again, you have to shift. You have to do things differently. And you have to shift.
EMILY MCCORMICK: And do you have any desire or any thoughts of going back into cosmetics once any non-competes with Estee Lauder are expired?
BOBBI BROWN: I'm someone that doesn't plan or think about things. But I'm also someone that never says never to anything.
EMILY MCCORMICK: All right. Well, we will leave it at that. Bobbi Brown, founder of Bobbi Brown Cosmetics and CEO of Beauty Evolution. Thank you so much for joining us today.
BOBBI BROWN: Thank you, Emily.