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May 15, 2006 9:55 am

The subtle art of selling hope in a bottle

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Joel Ronkin started his career as a corporate litigator but now spends his working days thinking about perfume and anti-wrinkle cream.

As chief administrative officer of Elizabeth Arden, the global cosmetics group, Mr Ronkin oversees the company’s US fragrance division.

“It’s a sexy industry; it’s hope in a bottle,” says the New York-born executive. “I was happy practising law, but I always thought there was something I would enjoy even more.”

While he has no regrets about making the jump from the legal world, Mr Ronkin, who majored in biology as an undergraduate at the University of Miami, admits that he is not the typical beauty industry executive.

“For everything I’ve done I’ve never really been the typical person,” he says. It was one of the reasons that led him to consider executive education.

In 1999, Mr Ronkin joined what was then French Fragrances, the Florida-based perfume and cologne company that owned such brands as Halston, Geoffrey Beane and Paul Sebastian. The company was also the primary distributor of Elizabeth Arden branded products.

In October of the following year, the company agreed to acquire the Elizabeth Arden brand from Unilever.

The deal, which formally closed in January 2001, transformed the company overnight. Its annual revenue soared from $400m to $800m, and its staff went from 400 US employees to 2,200 workers in 14 countries.

During the three years after the acquisition, Mr Ronkin worked as the head of human relations, but he wanted greater involvement in the business.

He was assigned to oversee Elizabeth Arden’s opportunistic sales group, a three-person team that sold the company’s products to deep-discount retailers such as Marshalls, TJ Maxx and Perfumania.

“This group had three very senior people, so it was seen as a low-risk training ground for me,” he says.

As it turned out, the group under Mr Ronkin’s watch was very successful, so in the summer of 2003, Scott Beattie, the chief executive, sent him to get more training.

“If I was going to take on a bigger leadership position in the company, it was important that I did some of the finance and accounting courses – background that I didn’t otherwise have,” he says.

After researching various management programmes, Mr Ronkin decided on the advanced executive programme at Northwestern University’s Kellogg School of Management.

The programme, which lasted four weeks, featured courses on accounting, finance, marketing, supply chain operations as well as classes on organisational development, public relations and crisis management.

While he gained concrete financial know-how from the programme, he says the most valuable lessons he learned were to do with his business mindset.

“I left believing that every day I would pull out my notes on how to deal with different situations, but for the most part it doesn’t work like that,” he says. “What the programme does is help you think about how to approach new ideas and how to address whatever business situation occurs.”

For example, he remembers his professors at Kellogg stressing the importance of how companies identify their customers. “From that I’ve seen us go from being just a fragrance and cosmetics company to being all about beauty whatever the category may be,” he says.

“When you define your mission and customer more broadly, it opens opportunities on how to differentiate yourself from other businesses.”

Just who is the Elizabeth Arden customer? “It is a somebody – generally a woman – who wants to feel better about herself through looking better,” he says.

Yet in the industry, Elizabeth Arden is considered a “mature” cosmetics company, catering especially to older women.

In early 2005, the company introduced Prevage, an anti-ageing face cream that it
created with Allergen, the pharmaceutical company that makes Botox. Mr Ronkin says that Prevage and similar products are especially popular among ageing baby boomers.

“It’s great for us,” he says, “They have a lot of disposable income, they’re living longer, and they’re aware of their appearance and are concerned about it.” One of the challenges of running a mature cosmetics company however is branching out into new areas – men’s grooming products, for instance.

“The generation of men a little bit younger than the baby boomers is comfortable shopping for themselves for fragrances and skin treatment products,” he says. “Men’s grooming is an area we’ve got to get stronger in.”

The company is also trying to appeal to younger women. Through the 2002 signing of Welsh actress Catherine Zeta-Jones, who is in her 30s, Elizabeth Arden has had some success in attracting a younger clientele.

“It’s no longer the brand that young women see as their mother’s rather than their own,” he says.

The company is also trying to boost its youth quotient through its fragrance line. Elizabeth Arden’s most famous perfume, Elizabeth Taylor’s White Diamonds, which launched in 1991, is the best-selling celebrity fragrance of all time.

But Ms Taylor, who had her Hollywood heyday in the 1950s and 1960s, is not a recognisable star among young women.

Elizabeth Arden has signed other new faces tailored to the 18-28-year old female demographic. For example, Curious, the signature scent of Britney Spears, the blonde and bubbly 20-something pop singer, was the company’s best-selling fragrance at top department stores last year.

The company has also recently signed Mariah Carey, the R&B singer, and Hillary Duff, the actress-cum-pop star, to its roster.

However, the market for celebrity perfumes has become increasingly crowded, with many other fragrance companies getting into the game. “It’s tough,” admits Mr Ronkin.

“What we’re having to do is think of celebrities in different walks of life.” The company recently signed Danielle Steel, the author of popular romances, to launch a fragrance in September.

“She wasn’t the typical celebrity pop star. In our minds she is the authority on love and romance and we thought that her readers truly identify with her in that regard.”

This is not to say that Elizabeth Taylor’s perfumes are going away. “I want to find a way to have sustained growth in our brands and have brands that stand the test of time,” he says.

“Finding ways to reinvest in old brands that are important to the customers is important to us.

“We must continue to find new products but really invest in our existing products in order to keep them growing.”

After all, when it comes to the issue of beauty, Mr Ronkin is a true believer: “If you look good and feel better about yourself, you will be healthier,” he says.

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