Bluemercury

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Bluemercury is a chain of American beauty stores which was founded in 1999 by Marla Malcolm Beck and Barry Beck in Georgetown, Washington, D.C. The stores sell cosmetics, and in-store facials and spa treatments. In addition to selling cosmetics from other brands, Bluemercury developed its own M-61 skincare line in 2012 and Lune+Aster make-up line in 2015.

The company was acquired in 2015 by Macy's, which opened in-store Bluemercury shops in its department stores, as well as expanding the number of free-standing Bluemercury stores throughout the U.S. Marla Malcolm Beck and Barry Beck remain the company's CEO and COO, respectively.

Video Bluemercury

History

Bluemercury was founded in 1999 by Marla Malcolm and Barry Beck as an online shopping website for luxury cosmetics. Marla Malcolm was in her late 20s and a vice president of acquisitions at a private equity firm, but was dissatisfied with her career. She met Barry Beck while her firm was seeking to acquire his company U.S. Maintenance, which provided maintenance services to chain stores and had grown into a multi-million-dollar enterprise; Beck convinced her to start a new company instead, with him as partner and co-founder. Their first idea was to sell luxury brands of cosmetics online; in naming the company they chose Malcolm's favorite color, and she asked Barry Beck to come up with something "strong and fast" to add to it. This led to Bluemercury, Mercury being the Roman God for speed and strength. As co-founders, Marla Malcolm (later Marla Malcolm Beck) became CEO of Bluemercury and Barry Beck became its Chief Operating Officer (COO).

The couple received $1 million in seed money for designing and developing the website. They had a number of early angel investors, including backing by two managing directors of The Carlyle Group, Dick Darman and Ed Mathias. However, luxury brands that Bluemercury courted were unsure whether they wanted to sell their goods on the internet, being unfamiliar with the incipient technology. At the same time consumers were not accustomed to buying cosmetics without trying them first. The website also faced competition from other companies that had the same idea of offering beauty products online. Six months after the website went live, the dot-com bubble burst, which called for a shift in the business model.

The couple had found two struggling independent beauty boutiques in Georgetown and Dupont Circle called EFX, which they used to help fill their online orders. They decided to buy and rebrand the stores "Bluemercury," re-stocking and converting them to their developing concept, which was that of a neighborhood store offering beauty products, personalized advice and samples. The stores remain, and in 2014, September 13th was named "Bluemercury Day" for the District of Columbia by Ward 2 Councilman Jack Evans's proposal, in celebration of the stores' presence in Washington, D.C.

The company started its expansion in the Washington, D.C. area and along the East coast. It became known for opening small stores that made cosmetic shopping more personal than at department stores. Each store contains a spa and provides beauty services. In 2001 they opened a third store, in Beck's hometown of Philadelphia. By early 2005, the company had eight stores in the Northeast, and received a buy-out offer from a Fortune 500 company. By 2006, Bluemercury was generating $17 million in annual revenue and operated 12 stores. In June 2006 the Becks, who had married in 2002, sold a stake in the company to the private-equity firm Invus Group, the sale helping fund further expansion. The private equity investment also allowed the couple to found M-61 Laboratories, which developed its own line of cosmetics. The company began offering the M-61 Powerful Skincare line in 2012. In 2008, with approximately 30 stores nationwide, the first store opened in New York City, on Broadway on Manhattan's Upper West Side.

Macy's Acquisition

By 2015 the company had approximately 60 stores in 18 states, largely in the Northeast. Seeking to further expand the number of stores and locations but needing additional capitalization to do so, in February 2015 the Becks sold the company to Macy's Inc. for $210 million, while retaining their positions as CEO and COO; the deal closed in March 2015. Marla handles merchandizing, staffing, and product development, while Barry is responsible for operations, finance, location scouting and real estate, and store design and development.

The Macy's deal provides Bluemercury with recruiting, financing, marketing resources, and inventory planning, while Macy's now carries Bluemercury's products. It also allowed Bluemercury to expand its infrastructure, including administration, distribution, and employee benefits. The Macy's deal also provided Bluemercury with access to Macy's e-commerce infrastructure and Macy's West Coast technology laboratory in San Francisco. Bluemercury has been valued at $1 billion, if it were a stand-alone venture. Macy's also added Bluemercury stores, called "shop-in-shops", inside some of its own department stores; the first four shop-in-shops, three in California and one in Houston, were launched in January 2016.

Maps Bluemercury

Retail stores

The Bluemercury store was designed around the Beck's distaste for the department store model, specifically the fact that luxury cosmetic sales happened through brand specific counters at department stores. Each counter was staffed by part-time employees who would offer products only from their own brand. Employees might have often helped, or declined to help customers, based on their perceived income. Bluemercury hires only full-time employees without commission and provides them with training on multiple brands.

Bluemercury stores are designed to be small, drugstore-like shops nearer to residential and business areas than department stores. Each store location has a spa and provides other services. The stores' curated collection of brands includes Nars, Bobbi Brown, and Laura Mercier, among others.

In early 2015, noticing the appeal of Apple's white stores, Bluemercury redesigned the interiors of its stores, changing from mainly maple wood and marble to white walls and furnishings, with brushed aluminum and light-blue accents. In July 2016, the company opened its 100th store, in Savannah, Georgia. At 2,400 square feet, it was their first entry into a larger store-size retail format. In July 2017 it opened a 2,700 square-foot flagship store at the base of the New York Hilton Midtown on Sixth Avenue in Manhattan; the location was Bluemercury's 145th store.

Bluemercury products

Bluemercury opened its own cosmetics design laboratory, M-61 Laboratories, in 2006. Based on purchasing research, the company recognized a gap in the market for "all-natural" products. The labs were provided a list of 100 harmful or synthetic chemicals that could not be used in the products, such as parabens, while at the same time were tasked with developing products using glycolic acid, salicylic acid, tamarind, and aloe. The company's first line, M-61 Skincare, underwent five years of research before being released in 2012. This line carries products focused on skin cleansers, masks, serums, and moisturizers. The products are recognizable from the company's signature blue on a white box, being based on the blue-hued M61 galaxy. The M-61 line is one of the most popular at Bluemercury.

In 2015, Bluemercury launched Lune+Aster, a makeup line. This line focuses on ease of use and fast application. Its cosmetics are not tested on animals; are paraben-free and phthalate-free; and most are vitamin-infused, vegan, and gluten-free.