Skinfix cracks U.S. market
Distribution deal with Target may transform Halifax firm that was on critical list two years ago
Last June, Amy Gordinier-Regan was sitting in a conference room in Target Corp.’s headquarters in Minneapolis, meeting with the company’s buyers.
The chief executive of Halifaxbased Skinfix was there to discuss the possibility of the retailing giant carrying her company’s products in its U.S. stores. Ms. Gordinier-Regan had secured the meeting after a chance encounter a month earlier with Christina Hennington, who oversees beauty products for Target. The pair had shared an elevator at a beauty summit in Palm Beach, Fla.
In Minneapolis, Ms. Gordinier-Regan made her pitch: Skinfix makes clinically tested, natural skin-care products for conditions such as eczema, diaper rash and dry skin associated with diabetes. Skinfix products are sold overthe-counter at a premium price, and the company’s list of retailers includes Shoppers Drug Mart, Sobeys, Loblaws, Lawtons Drugs and Rexall.
Target, of course, had already done its research on Skinfix. The retailer offered Ms. Gordinier-Regan an exclusive distribution deal that would put three Skinfix products in all of Target’s 1,797 U.S. stores.
Her response was immediate and emphatic: “Yes!” she cried, unable to conceal her excitement.
“My sales VP was not thrilled. It’s not a great negotiating tactic to look so enthusiastic,” she recalled in an interview at her Halifax office. “You’re supposed to play it cool, but I was not cool.”
Skinfix products hit Target shelves in October, and Ms. Gordinier-Regan predicts the distribution deal will help transform her company. “Target is the crème de le crème,” she said. “They’re known to be brand-builders.”
Skinfix revenue is expected to jump to $25 million in 2015, from $5 million in 2014. And that’s just the start, Ms. Gordinier-Regan contends. “We love to say — just because we like to think big — that we’re going to be a $100-million business by 2017. That’s our goal.”
Such predictions would have seemed preposterous in 2012, when Ms. Gordinier-Regan bought the company that was launched in 2006. Its products were based on a family recipe first concocted by a Yorkshire, England druggist in the 1800s. By 2012, however, Loblaws had dropped Skinfix from its shelves and other retailers seemed likely to do the same. “It was in pretty critical shape,” Ms. Gordinier-Regan recalled.
Yet Ms. Gordinier-Regan, who has worked at both L’Oréal and Estée Lauder, saw potential. She bought the company, avoided further de-listings and relaunched the products with updated packaging and a marketing push. At the time of the purchase, Skinfix had revenue of just $96,000.
Ms. Gordinier-Regan has an ambitious growth plan, and she admits much of it hinges on Skinfix’s Target rollout. “It’s going to be really pivotal. We only have one chance to be successful. Everything is in our favour but we now have to make it happen,” she said. “The product has to sell off the shelf.”
Yet as Skinfix’s chair, John Risley, warns, it’s a major challenge to gain U.S. traction with even the most successful of Canadian products.
“It’s not every product that you can simply move from one jurisdiction to another,” said Mr. Risley, the billionaire founder of Clearwater Seafoods and Ocean Nutrition Canada. “Look at the experience that Tim Hortons has had in the United States. It’s been a very checkered experience. They’ve had their nose bloodied a couple of times.”
“Success in Canada is no guarantee of success in the United States,” Mr. Risley said.
Karen Grant, a beauty industry analyst with the NPD Group, said Skinfix could benefit from the current focus on “indie niche” beauty products.
“Brands that are a bit novel, or different, and not widely distributed are getting a lot of traction right now,” she noted. “You’ve got these brands that are doing very targeted products doing exceedingly well when they’re in the right stores with the right marketing and messaging. ... Target is a great place for that.”
However, Ms. Grant said Skinfix will have to fight to stand out in the “highly saturated” U.S. beauty market. “Consumers are literally inundated with hundreds of products every year,” she said, adding more beauty products are sold in the U.S. in a day and a half than there are cars sold in an entire year.
“Products are constantly being turned out and there are a lot of big players in the game,” she said.
Undeterred, Ms. Gordinier-Regan hopes to push even further into the U.S. market. Skinfix’s exclusivity deal with Target expires in August. At that point, she would like to pursue retailers such as Walgreens and CVS.
“The distribution plan for 2015 is to roll it out to everybody in the U.S. in the back half of the year,” she said.