Dream built on the right foundation
By Rebecca Knight
Published: February 15 2011 22:01 | Last updated: February 15 2011 22:01
As a girl, Mally Roncal spent hours beside her mother’s elegant dressing table watching as she carefully powdered her face, dabbed rouge on her cheeks, delicately lined her lips and spritzed herself with perfume. “I was always attracted to glamour and beauty,” says Ms Roncal. It was perhaps the formative experience of her childhood. Ms Roncal, 39, is the founder of Mally Beauty, a New York-based cosmetics company, which last year had sales of more than $50m.
Mally Beauty sells more than 92 products – from a set of blushers named Partylicious to a compact of eye shadows called City Chick Smolders – all pledging to help give everyday women the kind of polished appearance seen in glossy magazines.
Over lunch at a fashionable Greek restaurant in midtown Manhattan, Ms Roncal has a livewire personality but speaks in serious tones when discussing her business. She admits her life’s work is not noble or high-minded but also insists it is not frivolous, since cosmetics play an important role in women’s lives.
Ms Roncal herself has film star good looks: a honeyed mane, dewy cheeks and perfectly plumped pink lips. Raised in upstate New York as the only child of Filipino immigrants, her upbringing was typically Filipino, she says – “our house always smelt of fish sauce” – but her parents embraced the idea of her “achieving the American dream”.
They were both doctors and Ms Roncal, too, was earmarked for medical school. But when she arrived at Marist College in Poughkeepsie, New York, she soon switched her focus to fashion design. After graduation, she moved to New York City to work for Kalinka, the designer. The pay was meagre but it was her entry to a world of celebrities and designers, including Phil Bickett, a former model who later became her husband.
Ms Roncal also worked part-time at the Shiseido make-up counter at Barney’s, the luxury department store, where she studied the ingredients on product labels and pored over trade magazines.
“It was my calling,” she says. She also took every make-up artist job going, from unknown rappers making videos to small-time models on photo shoots. “I never said no to a job. But after a while, I realised this is my business and I had to learn how to negotiate.”
At 24, Ms Roncal signed with Jim Indorato, the hair and make-up artist agent, and spent 10 years travelling the world to do make-up for private clients, including supermodels, singers and actresses.
Getting started: in their own words
Mally Roncal and Don Pettit have complementary perspectives on how to build a company:
●On hiring. “At first it was hard for me to hire other people. I am a perfectionist. But I realised that to grow as fast as we were growing, we needed help. I’m now more able to let go – I know that my employees can do it.”
●On customer service. “I am the face of the brand. I answer every e-mail and I listen when customers give me suggestions. It’s all about communication, so I give my website a lot of time and attention.”
●Know your stuff. “You need a deep knowledge of your category, but you have to know the rules you can break ... You need to find a point of difference.”
●Keep your options open. “You need to be able to go to Plan B when Plan A fails. Find a way to get through setbacks productively.”
She was making a lot of money but wanted to start her own business. After all, she knew the world of cosmetics: she had insight into the products, she had relationships with stores, and she had expertise.
Mr Bickett quit his marketing job, they pooled their savings, and friends and family chipped in so her start-up capital was about $800,000. In 2002, they teamed up with Don Pettit, a cosmetics industry veteran, who joined as chief executive to add some different business experience.
“Part of what I bring to the party is a way to channel [her] energy and vision into viable, user-friendly products,” says Mr Pettit, speaking by phone while on vacation.
For two years, Ms Roncal, Mr Bickett – now creative director – and Mr Pettit honed the business plan, developed product ideas and pitched to potential investors. Mr Pettit’s reputation and industry connections – as a founding manager of Jane Cosmetics, which was eventually sold to Estée Lauder – helped win Mally Beauty contracts with big suppliers even though it was just a small start-up.
He also helped Ms Roncal on formulating suitable lines. “We intentionally focused on products that are in ‘high loyalty’ segments, such as mascara and concealer ... Lipsticks are one of the lowest loyalty products,” he says.
Ms Roncal was also thinking about her market. QVC, the home shopping network, was where she wanted to unveil Mally Beauty, whereas traditional cosmetics launches usually targeted retailers such as Sephora or luxury stores such as Neiman Marcus or Saks. At the time, QVC had a homey, unglamorous image.
But Ms Roncal knew many women wanted advice on applying make-up and that would be the key to sales.“I wasn’t just selling a product – I was selling a technique and teaching new ways to apply make-up,” she says. “To me, selling on television was the future of make-up, even though people in the cosmetics industry and my friends in the fashion world thought we were out of our minds.”
In 2005, Ms Roncal introduced a line of eight products packaged in ballet slipper-coloured boxes. During her 60-minute launch show, the merchandise sold out with 20 minutes to go, making it the most successful launch on QVC until then. The high-end department store Henri Bendel signed her to an exclusive contract. “We came out of the box on fire,” says Ms Roncal. “We were selling, and it felt easy.”
Perhaps a little too easy. Ms Roncal rushed out a line of lipsticks and eye shadows and secured a second slot on QVC. But this time she flopped because the products “didn’t have a story or a meaningful difference”, she says. “It was humbling, and it scared me.”
She and Mr Pettit, who has a third of managing equity in the company, then raised about $1m from an angel investor to develop differentiated products, including a professional-grade eyeliner and a concealer. They persuaded QVC, where sellers’ success is judged by dollars per minute, to give her another shot. This time, she sold more than 100,000 pieces.
In its first year, the company brought in $5m. Last year, sales – which mainly take place on QVC America and QVC UK – grew by nearly 100 per cent. QVC will always be a pillar of its sales but “infomercials” are increasingly important as a way to tell a story about the product.
Ms Roncal and Mr Pettit have a very close partnership, he says. “We disagree at times but we are highly agreed on the strategy to date, which is to build a direct relationship with loyal users.”
Neither of them has an exit plan, so far. “We’re not sitting around wondering how we can sell this business,” he says. “We don’t have capital pressures and we have a lot of options for continuing to grow this for as long as we want. That said, it doesn’t mean we wouldn’t entertain a joint venture that would improve the brand and serve our user base.”
Copyright The Financial Times Limited 2011.