It's a Matter Of... Time
Building a Modern Legacy BrandOctober 06, 2020 BeautyMatter
October 06, 2020
There are some brands that are built punching above their weight class. Success is not always based on size but the ability to execute on your purpose, your vision, your strategy and being profitable. Kelly talks with Matthew Malin and Andrew Goetz, partners in life and founders of (Malin + Goetz) who set out 16 years ago to create a modern apothecary and build a brand that would last with range of efficacious products, iconic packaging, and a store around the corner from their Chelsea apartment.
Andrew Goetz [00:00:23]: Hi, I’m Andrew Goetz, I’m the co-founder of Malin & Goetz. This is…
Matthew Malin [00:00:27]: Matthew Malin.
Andrew Goetz [00:00:28]: And for us, it’s a matter of time.
Kelly Kovack [00:00:32]: Many brands today focus on valuations, the size of fundraising rounds, top line numbers, and their path to an exit. I’m Kelly Kovack, founder of Beauty Matter. The motivations for launching a brand vary, but make no mistake, it’s hard work, but incredibly rewarding work, even when things don’t go to plan. Most brands from the indie beauty revolution from the ‘90s and early ‘00s were self-funded. Success in this paradigm is not based on the size, but the ability to execute on your purpose, your vision, your strategy, and being profitable. The brands often create an impression of scale that belies their revenue. There is nothing more impressive than a vision well-executed guided by intuition that results in commercial success. Matthew Malin and Andrew Goetz, partners in life and business, are the founders of Malin & Goetz. They set out to create a modern apothecary 16 years ago with a simple range of efficacious products, what has become iconic packaging, and a store just around the corner from their Chelsea apartment.
Well, first of all, thanks for – we finally made this happen.
Andrew Goetz [00:01:55]: Who knew it would take this long?
Kelly Kovack [00:01:57]: I know, and it has literally taken months and months and months.
Andrew Goetz [00:02:00]: Yeah, I think we may be over the 12-month milestone.
Kelly Kovack [00:02:04]: Not quite, but I mean, it’s sort of very similar to trying to get together for dinner. You would think that we were solving world peace or something, trying to organize our calendars.
Matthew Malin [00:02:16]: Yeah, and now dinner will probably be impossible.
Kelly Kovack [00:02:18]: I know, right? It’s crazy, crazy, crazy. Alright, so, let’s get started. My first question, and apologies in advance, because I’m going to date us all. Matthew, you and I met when I was at Bliss developing the catalogue business, and you were at Kiehl’s, so we were known as Matthew at Kiehl’s, Kelly at Bliss, Jane at EFX, we all were sort of like attached to the businesses, and you know, it’s kind of ironic to hear, for me, anyway, this indie beauty trend, when, you know, it’s exactly how we sort of started our careers, and Andrew, you were working in sort of design at the time. Did you guys always know you wanted to start a business together? I mean, what was the impetus for throwing your hat into the entrepreneurial ring and leaving sort of the corporate world?
Matthew Malin [00:03:18]: Well, I’ll start, but it’s really Andrew’s story. So, I had been working for a couple of businesses, Kiehl’s was probably the most notable, and when Kiehl’s was sold to L’Oréal, Andrew had said to me, “Let’s do this on our own. Let’s jump ship and start our own business.” We had both been working for small, entrepreneurial, successful start-up businesses, and at the time, I said no. I was really risk-adverse, I wasn’t interesting in doing that, I was scared, and many things, and I took a job working for Prada, and then when that job, after a couple of years, was not working out the way I had hoped, Andrew came back and said this again. So, Andrew is really the entrepreneurial spirit behind all of this, and he can probably add a little.
Andrew Goetz [00:04:05]: I mean, I think we were both at a crossroads in our careers where we had reached a certain level and you know, obviously we could continue to develop, but we’d also been in a relationship for what, ten years, at the time, and everything just seemed – the moon, the stars, the sun, and the earth were all aligned. I thought this was a great time, and also, the zeitgeist in the market was a great time. Kiehl’s was an amazing brand, but it was based on heritage, 1851, whatever it is, and L’Oréal was just going to sort of blow it out of the water, and I just really felt there was an opportunity to do something really, really modern and take my background in design and architecture and combine it with beauty and create this beautiful, wonderful, functional brand that had an aesthetic to it based on minimalism, and the time was right, and people were looking for a story and they wanted real people involved, and not just a marketing speech.
Matthew Malin [00:05:05]: And, as you know, Kelly, we both were coming from independent indie brands, so LVMH purchased Bliss at the time, L’Oreal had purchased Kiehl’s, Shiseido had purchased Francois Nars, all of these little brands that I and you and then Andrew, to some degree, as well, having worked for a privately owned business, second-generation business called Vitra, we’d been part of this whole process in development of these businesses that then were being sold off to large corporations. We can be that indie brand, we can be family owned and operated, we can have a soul, and you know, after a second round of this, a couple years into it after Kiehl’s had been sold and I was working for Prada, which was also a privately-owned, family-run business as well, still is mostly family-run, you know, it just seemed like the right time, and Andrew really had given me sort of this confidence to be able to do this, and he comes from a very entrepreneurial family, and I don’t, so I needed the support to have that sort of place to jump off.
Andrew Goetz [00:06:11]: But also, I think coming from the industry and looking at the industry from the outside, I looked at it, particularly when Matthew was working at Kiehl’s, it was very Baroque to me. I mean, you’d walk in there and there were like thousands and thousands of products, and it was really, really intimidating, and this was from a purely design aesthetic, but also a functional, like how could it be that complicated? So, that was really the tenant of Malin & Goetz: how could we create a brand that went to the opposite direction, that was based on this idea of simplicity and uncomplications?
Kelly Kovack [00:06:48]: You know, I think the interesting difference between sort of the businesses and brands that we were a part of and today is all of those businesses were pretty much self-financed. There wasn’t this huge sort of venture-backed component to what we see today, so, you know, I think the consideration of starting a business back then, at least for me, was very different than a consideration today; the stakes were totally different.
Andrew Goetz [00:07:20]: The barriers to entry were lower.
Kelly Kovack [00:07:22]: Yeah, in some ways.
Matthew Malin [00:07:24]: You could start a business with a lot less money and have it be special and unique, whereas today, you know, I don’t know. We’re not starting a business today, nor are we 25 anymore, so it’s really time and place. One of the more interesting things that’s happened over the past 16 years of being in business, and having some notoriety, having some press that gets our name out there, is we get connected with other entrepreneurs, and we get to hear their stories, good and bad, and it’s fascinating. It’s probably one of the greatest joys of having a business in New York around other entrepreneurs, whether they’re in beauty or not, that you get to hear these start-up stories and you get to hear the trials and tribulations and exactly how, in many ways, they’re things that you’ve gone through, or at least processes that you’ve gone through, and it really is one of the greatest pleasures.
Andrew Goetz [00:08:13]: The other important component is that at least for us, was that not having a lot of money, that tension was a great incubator for creativity, and I think that, you know, money does change everything, and it’s not that you can’t be creative with it, but you tend to waste a lot of money, and you waste a lot of time, and when you have to be really, really focused on everything, not having the fall back of, “I can just buy my way through it,” you have to have idea generation of how you’re going to solve a problem.
Matthew Malin [00:08:44]: And, there’s also all these – I mean, it’s so complex because we came to the table with experience, not a lot of money, and intended to do something for ourselves to support ourselves. So, you know, it’s a very different mindset when you’re in your 30s, you have experience behind you, you know you’re going to use your own cash because this is your business, you want to be in control, because you’ve seen people be in control that were self-funded and have done this before you, and so there’s a business model already in place that we were sort of falling into and understood and saw a way forward, and you know, it’s very different from somebody who just graduated from college and is like,
“I’m going to raise capital and I’m going to start this business and I’m going to sell it off in five years and then I’m just going to do something else.” You know, we didn’t – that wasn’t the intent, and we just had a very different mindset that this has to win, it has to succeed, we can’t fail, it needs to support us, this is our lifestyle, these are our careers, and in so many ways, at least for me, fear drove success. It drove, at least, having a viable business.
Kelly Kovack [00:09:56]: It’s very interesting, because I distinctly remember when you told me you were going to launch a brand. I was up to my eyeballs in Rescue Beauty Lounge shipping flip-flops and nail polish, and you know, I think we went and had coffee around the corner, and you were kind of saying you were working on a business plan. Ultimately, I think the conversation ended with, “Okay, are you going to raise money or are you going to self-fund this?” and the conversation we had was – because I, obviously, was in Rescue Beauty Lounge, and so I was really looking for somebody else to kind of be in the thick of it with me that was a friend, right? And at the end of the day, I was like, “Well, you know, can you write the check or not? Do you want to take that leap?” because the business plan was up in your head, and you know, you guys had such a clear vision for what you wanted to create, and then at the time, it was really unconventional, and you guys were way ahead of your time, because I mean, you know, obviously, I talk to lots of brands and founders, too, and 16 days later – or 16 days, 16 years later, you guys are still sort of on inspiration boards, and as relevant as you were when you launched. Can you talk – well, it’s true. Can you share a little bit about the genesis of the brand, and what was that early vision, and what were your non-negotiables?
Matthew Malin [00:11:26]: I’ll start, and then Andrew will probably add a lot more to this. So, when we finally decided that it’s a now-or-never moment and we’re going to do this, we had had some mentorship early on, which is really kind of incredible. So, at the time, I probably wouldn’t have said this, because she asked not to be involved, but I’ll say it now. So, we had some support and help from a dear friend in the industry who has a very, very successful beauty business, and her husband, who is Oxford and Harvard educated and worked for the Boston Consulting Group, had written her business plan. So, we had this – and, she gave it to us. She basically was like, “This is a brilliant idea, you’ve got to do it, I want to support you, here’s my business plan, use it as a model,” and the model itself was very different from what we were doing, but it thought of every sort of problem that could happen along the way.
Andrew Goetz [00:12:23]: It was a great roadmap.
Matthew Malin [00:12:24]: Yeah, and one of those issues or concerns to think about was whether you were going to self-fund or you were going to raise capital. So, we were approaching it with the idea perhaps we may raise capital, but we were always intending to self-fund it, and just trying to get some feedback as to whether or not that was viable. The other thing was that having worked for family-run, privately-owned businesses that were successful, by happenstance, had no business plans for the most part, but just succeeded, not probably dislike Bliss, in some ways. We had seen the successes and the failures or the concerns along the way, and we kind of knew the business model that we thought we could leverage our careers to make a success, and so we were doing a lot of the same things we had always done in our careers, Andrew from a design and architecture perspective and a marketing perspective, and myself from beauty, sales, marketing, as well. But, really, applying it then, together, to really create a point of difference and do something unique at the time that was exciting to the two of us.
Andrew Goetz [00:13:36]: Yeah, and I think the other thing is that you can plan and you put everything down on paper, but you also have to be able to pivot on a dime and you have to be intuitive, and some things just can’t be explained on a spreadsheet. I always say that everyone is dealt the same percentage of good luck and bad luck, it’s a matter of how you run with the good luck and diminish the bad luck that really makes a difference. So, you’re going to have bad days, things are going to go wrong, but there’s an opportunity to find – there’s always a silver lining, and sometimes when it’s raining and your hands are open and all the opportunity is going through your fingers. So, I think we really have to figure out how to capitalize on the good things and assuage the bad things, and that just takes intuitive thinking.
Matthew Malin [00:14:23]: We also spent – well, I had left my job at Prada, and so for the next 18 months, I was writing a business plan in Starbucks, with like a group of other people. It was this real little community of friends; we were all sitting there sort of working on projects, whatever they happened to be, and did that over the course of 18 months, implementing the business and then launching it. Andrew had always been part of the process, and he had joined about six months after the business had launched, but the process of writing the business plan, which I had never done before, I don’t have an MBA, so you know, it was a real…it was kind of like getting an MBA. It was sitting there and learning, and it was really exciting and fascinating and isolating and scary, all at the same time.
Andrew Goetz [00:15:14]: If it wasn’t for me, he’d still be sitting in Starbucks.
Matthew Malin [00:15:20]: I’m not the smartest person in the room, but I am very tenacious and determined, and you know, sometimes, at least from my perspective, the devil’s in the details, and I really toiled over making sure that I didn’t leave anything out, and when I’m focused, I’m really focused. I can block everything else out.
Kelly Kovack [00:15:40]: So, you know, you guys were together over a decade sort of in life before you started in business. How has – what is your secret for making it work? I mean, did you divide and conquer? Was it more of a collaboration? You guys think very differently, but have the same aesthetic.
Andrew Goetz [00:16:01]: Maybe a combination of both. I mean, it was obviously a lot of collaboration, but we also learned that we needed – we also had different separate skillsets and different areas of expertise, which made us sort of dive into different areas, so that gave us a little bit of variable. When we were working in the store, we were both doing everything, it was very collaborative, and you just had to get through the day. As the business developed, things siloed a bit more, which was better for both of us, because you know, you’re not on top of each other, and it sort of diminishes your sitting Nancy moments, and that’s where we are today. So, everyone has a more defined role.
Matthew Malin [00:16:43]: As partners in life, and I’m sure a lot of people can relate to this, we’re opposites attract sort of situation, and we come from two entirely different perspectives; however, as with most relationships that succeed, you agree on the most important things in your life, and that held true in business as well. So, when we needed to make a very important decision, there wasn’t a discussion or argument or a disagreement about it, we were pretty aligned all the time. It was the small details along the way that we didn’t agree on, and in many ways, as we look back, and even if we have a fight today about something, we can kind of fall back on the idea that it’s that tension that really does bring us to the best solution.
Andrew Goetz [00:17:28]: And you know what they say, what doesn’t kill you.
Kelly Kovack [00:17:32]: Well, you guys are still going strong, so something works. You know, so you opened your first store in Chelsea, and you launched the brand – the product brand – and the store at the same time, and that first store was right around the corner from your apartment, it doubled as an office, and you guys really are kind of a neighborhood apothecary brand sort of at your DNA. One might also argue that you were early on the D-to-C trend in an analogue way. But, you know, why was a store important, and what role did it play in establishing the brand? Because they kind of feel intrinsically tied.
Andrew Goetz [00:18:19]: I couldn’t agree more. I mean, the store was incredibly important, and the stores remain incredibly important, and from the very beginning – I’m just going to backtrack a little bit – our goal was never to be McMalin & Goetz and have a store on every single corner and just carpet bomb all the continents of the world with Malin & Goetz. It was always meant to be strategic, which actually worked out very well; while we sit here in the pandemic, the last thing you want to do is be over-scored in this environment. So, that was never part of it. And then, every store was individually designed, so there was never a cookie cutter approach to it all. So, we believed in how design could educate people and inspire people and brand, and that was really the crux of what the store did, and it remains equally as important today as the day that we launched the brand.
Matthew Malin [00:19:13]: Right. Like you, Kelly, I started my career in retail, and I loved retail, and it’s really a part of everything that my career is about and the things that I enjoy most about working every single day. So, you know, having the opportunity to be a merchant, to develop a store, to really participate in a community, our community, those were just non-negotiables. We also – or, I also, had come from a place of retailers, like really great retailers, you know, that had forged ways, and even interestingly from a business model perspective, Kiehl’s had a single store, and it was, again, very happenstance, it had been a store in the family for three generations, and when I was working for the then owner of Kiehl’s, Jamie Morse, she…I don’t think she ever intended to open up another store because her father, first of all, never wanted to duplicate it; it was too special, and secondly, as she took over and her legacy was coming into play and she was developing the business much more on a global scale, her focus wasn’t – it was always on the store as a marketing opportunity or what was special in the brand, but it was never about having to manage that level of complexity, you know, so the wholesale business just sort of ran on its own and it generated all of this income. For us, as we started to look at this, we saw this opportunity to create a very modern vision of what an apothecary or a neighborhood environment could be, and do that entirely different from our predecessors. We also loved the idea of having a store and having multiple stores. We wanted to be retailers and have key locations to support our wholesale businesses around the globe, which is what we started to do and what we’ve accomplished, and it just feels, I don’t know, it feels right to the brand, like you tell your story best in your own environment, and you don’t have anyone dictating to you what’s right or what’s wrong or how you should do it in a different way than what your vision is.
Andrew Goetz [00:21:29]: But, you still have to embody integrity and it can’t just be a place for transaction, there has to be a component of inspiration and education and service. It’s really, you know, you’re stepping into a special world, and it’s not special if it’s the same at every location.
Matthew Malin [00:21:49]: Those things are harder today than ever, because there just aren’t a lot of…in my opinion, there aren’t a lot of great old school retailers who really put the customer first, and digital has changed the full dynamic of what this is and what it looks like entirely, so the paradigm has shifted obviously, but it’s really something that we hold dear, and now, as you’re saying, things are coming full circle, and it’s for entirely different reasons, but it is still this place where people gravitate; they want to come back to their community, to what’s local, especially.
Andrew Goetz [00:22:29]: Yeah, people like – I mean, this is the whole conundrum of corona and COVID, is that people want to be around one another, they like to interact, people like density, they like to socialize, and a store provides that opportunity.
Kelly Kovack [00:22:46]: No, it’s very interesting because while your stores, like every sort of design detail and function of the space is so well thought through, but you don’t have kind of those Instagram moments, like the store itself is beautiful and takes beautiful pictures, but you guys haven’t kind of like leaned into those gimmicks that a lot of pop-up stores or retailers have. I mean, how many stores do you have? And, I know this is a hard question because you can’t have a favorite child, but do you guys have a favorite store?
Andrew Goetz [00:23:25]: I mean, I think we would probably agree, we might say Chelsea, just because it was our first born, and that store was like, built on such a shoestring budget, so to have created that environment with so little means and just pure energy and willpower, I guess that’s remained my favorite.
Matthew Malin [00:23:45]: I would say the same. I mean, it really is, you know, it’s where the brand began, it pretty much looks the same as when it began. It still feels really good in there. It’s no longer our biggest volume store, but it’s number two, so it still is a significant piece of our business.
Andrew Goetz [00:24:10]: It’s a heritage for us, and I think, you know, even if you look at that stretch of Seventh Avenue, it’s not exactly retail center; it never was and it never will be, but yet that store performs pretty much one of the best, because there’s a heritage there that people remember the two of us there and the dogs being in there, and it was this really, really special environment, and that carries over 16 years later.
Matthew Malin [00:24:34]: It was also the paradigm for everything that came after it, too, so how the stores would be set up; how we would merchandise fragrances and candles versus skincare; how they would sit in the neighborhood, whether or not we wanted to created destinations or destination-oriented streets. So, we’ve learned a little bit. We moved to another downtown location in New York, Nolita on Elizabeth Street, that was a much better positioned location just in terms of traffic and volume. So, that was important as we…
Andrew Goetz [00:25:10]: Yeah, it’s a proper shopping street. Seventh Avenue was very utilitarian.
Kelly Kovack [00:25:14]: Well, and also the store sort of helped inform how you are merchandised in sort of retail partners as well, because it was sort of something that you could point to.
Matthew Malin [00:25:26]: It’s very difficult to convince retailers to do things your way and not their way, and having a store allows you the opportunity to convince them…
Andrew Goetz [00:25:42]: It sells the culture of the brand.
Matthew Malin [00:25:44]: Yeah, if you can get them in your store, if you can get the retailer to come to your store - the easiest way is to say, “I’m going to give you a gift box of everything – one of everything,” whatever it is, and you get them to come and then you give them a tour of the store, you really then can showcase why and how certain items are important to the brand, how the brand and what the brand stands for, how you want to merchandise it in its environment, because you become romanced. It’s this beautiful little jewel box that offers you these sort of special little details. The opportunity is if you love shopping, to get in there and find stuff that you wouldn’t see necessarily somewhere else.
Andrew Goetz [00:26:28]: Yeah, they’re curated. I think that’s what makes it so special.
Kelly Kovack [00:26:31]: I mean, retail distribution and who you launched and when you launched I know was highly controlled. I mean, having – I remember the conversation we had when I had a client that wanted to carry you, and I’m like, “You guys, we know each other, just do it!” but you were so diligent in understanding every single person that you were getting into business with, and you know, I don’t know, I wonder if people sort of take that care now, it seems like distribution happens so fast now because people are trying to scale so fast, and also, it’s 16 years ago there was kind of a formula you followed, and now, everything has kind of become open game, right? You can be in mass and you can be in ultra-market. Yeah, I mean, it’s kind of a free-for-all, where it was very structured. But, you know, how did those retail choices sort of help lay the foundation for both the brand, but kind of the culture, because you had people staffing them, as well.
Andrew Goetz [00:27:42]: I mean, they totally helped because I think the most important component, other than that were carrying the brand, is that we were creating a relationship with somebody, and when there’s a relationship, there’s passion, and so going through all those – jumping through all of those hoops and all of those details to make sure it’s going to succeed, the pay-off was that there’s a lot of enthusiasm and a lot of passion and they’re selling your brand because they believe in it so much because they have a relationship with you, and they’re just excited about it; they love the product, they love everything about it, but they really love the process equally as much, I think.
Matthew Malin [00:28:19]: When you were asking the question, I was thinking exactly the same thing, and this really goes back to being a retailer and a merchant. I mean, one of the things that you read about almost daily in Women’s Fair Daily or whatever it is about Stanley Marcus of Niemen Marcus is how he was connected to his customer, that it was about the customer first and how he was this relationship builder, like that was the most important thing, and it is instilled in the culture at Niemen Marcus today; people get on the phone, they don’t even have to have their customers in front of them, they clientele them, it’s all about that. For us, we really thought about every single customer, whether they were a store selling our products, or direct-to-consumer, and what that meant, how we were servicing people, the kind of service we were offering them, the information that we could deliver, and this became sort of the backbone of how and why we were choosing certain retailers. Did we have synergy? Were we going to represent the brand in the way we felt the brand could be represented? And, by the way, when you take the opportunity to jump ship and do this on your own with your own money, you kind of want to work with people that are likeminded all of the sudden; I think you do. You really say, “I want to work with people I like, or people that like us and want to do it our way or ways that we both agree on.”
Andrew Goetz [00:29:42]: Yeah, there’s nothing – actually no better day when you jettison somebody who’s just been – regardless of the sales and the income, the revenue that they brought into you, you’re able to say, “You know what? The way he treats our staff and our employees and the interaction that we have with them is just not worth it.”
Matthew Malin [00:30:00]: That’s happened several times, where we’ve taken an account, it has generated some money for us, and it has been miserable, and we’ve had staff members abused by people on the other side, and once it’s happened, we’re just like, we don’t care. We’d rather not do business with people like that; we don’t have to do business with people like that.
Andrew Goetz [00:30:19]: And ultimately, those people aren’t good representations for your brand anyway, because if they’re treating you that way, you know they’re treating other people that way, so you’re going to be associated with that negative mindset one way or the other, so it’s just better to cut off the limb and put your energy in positive stuff.
Kelly Kovack I know you guys – well, before COVID, traveled a lot, and you both love retail, and if Barney’s were still open, I would know the answer to this question, but who is your favorite retailer in the world? Where do you love shopping?
Andrew Goetz [00:34:44]: I think we’ll agree. I think we’ll both say Liberty in London.
Matthew Malin [00:34:46]: Yeah, I would say Liberty.
Andrew Goetz [00:34:48]: You know, it’s…Barney’s would have probably been the answer, but we know how that turned out.
Kelly Kovack [00:34:54]: I know, so sad.
Matthew Malin [00:34:56]: There are lots of great retailers. Liberty, while it’s gone through many changes as well, still retains sort of that special, singular environment that you know, it’s a little petuned and tattered in some ways, but they’re all good ways, and it just feels unique and interesting, and the assortment, for the most part, is – for me, personally, I would buy everything in the store.
Kelly Kovack [00:35:23]: No, I 100% agree with you, like the floors creak, but I go in there, I always – every time I’m in London, I make sure I go there, because I still feel like I discover things there.
Matthew Malin [00:35:36]: You do, you do. Yeah, and then they take some risks in terms of designer, which is, you know, if you’re involved in fashion and beauty, you want to be around that, you want to be around the creativity. That’s what made Barney’s special as well, and certain other stores, but yeah, I love that.
Andrew Goetz [00:35:53]: Yeah, and its architecture is just so unique, you could never replicate that if you wanted to
Matthew Malin [00:36:00]: Which is what the original Barney’s was, you know. It was this cobbled together of buildings that were somehow made to look really special and unique, but every one sort of was its own and its own department.
Andrew Goetz [00:36:14]: Yeah, layers of time; each generation has put their thumbprint on it.
Kelly Kovack [00:36:18]: Well, and also, you know, when we’re talking about Barney’s kind of of that generation, the assortment reflected that as well; it was a little eclectic, it kind of didn’t seem like it should all live under one roof, but it all worked.
Andrew Goetz [00:36:34]: It also tapped into individuality, you know, they were doing something completely different than everybody else, and that was really the spirit of New York. You went to New York not to be in a shopping mall, in a shopping center, and to dress like a clone; you went there because you wanted to express your individuality, and that’s always been the wonderful thing about New York, and Barney’s tapped into it, and honestly, when they moved uptown and they sort of got…it was death by a thousand cuts. The day they moved up there was the day Barney’s sort of came to an end.
Kelly Kovack [00:37:04]: Well, for me, I had the misfortune of being up there the day they were ripping up the mosaic tile; like who rips up a mosaic tiled floor? I still don’t really…can’t wrap my head around that, but yes, it was death by sort of a thousand cuts, but for me, I was like, “That’s it. It’s over.”
Andrew Goetz [00:37:23]: Yeah, we went to the sale, and it was this…it went from Barney’s to EJ Korvetts. It was the most depressing thing I’ve ever seen.
Kelly Kovack [00:37:34]: I mean, it was…I mean, I did the same. It is really, really hard to even describe. I mean, there are people walking around with sandwich boards around the blocks, it was dust bunnies all over the place, it was horrible.
Andrew Goetz [00:37:49]: There was no dignity; it was the most undignified death.
Matthew Malin [00:37:53]: No, I had been a beauty buyer for Barney’s before I worked for Kiehl’s, which is how I ended up becoming friendly with the family that owned Kiehl’s at the time, and being at Barney’s at that time, when they had the original location in Chelsea, you know, there was not only this cobbling together of stores, but they were very interested in doing something that no one else had done in retail, and this included design, which I think influenced us in a lot of ways, and Andrew coming from the design world as well, but you know, there were these beautiful mosaic floors, there was this Andre Putnam staircase down the center that was just this sort of anomaly in the middle of the store that was this beautiful thing, and there were all of these sort of…you know like the Mrs. Pressman, when she had traveled to…I don’t know, France or Italy or someplace, she had brought back these Baccarat chandeliers, and they hung in the houseware department, and they were things she just found herself that she thought would be special for this environment, and it was those sorts of details that you know, really, Liberty certainly embraces them, but they make it special and they make you feel like you’re in an environment like nowhere else.
Andrew Goetz [00:39:06]: It was a New York moment. Liberty is a London moment and Barney’s was a New York Moment.
Kelly Kovack [00:39:11]: The irony of all of it is Barney’s and its original vision and even Bendel’s, you know, these were retailers that were almost a hundred years old, and what consumers want is what those retailers were a hundred years ago, not what private equity turned them into.
Andrew Goetz [00:39:32]: Although, the irony of Barney’s is it started out as a discount.
Kelly Kovack [00:39:36]: Yes, that’s true. Okay, well past the discount part.
Andrew Goetz [00:39:42]: I was sort of joking, but not really.
Matthew Malin [00:39:44]: But it’s Barney Pressman and Fred Pressman that people talk about; it’s Stanley Marcus that people talk about. You know, it’s these old school retailers who really understood service and connecting to a customer.
Andrew Goetz [00:39:56]: You know what they say, the first generation creates it, the second generation expands it, and the third generation kills it.
Matthew Malin [00:40:04]: I’m not there yet, but I see that opportunity from a digital perspective. I don’t know that I’m savvy enough to really understand how to make it work digitally; however, I know the components that need to be infused to it.
Kelly Kovack [00:40:20]: Yeah, I mean, there’s something to be said for just like good, old-fashioned customer service. I mean, you know, saying thank you and acknowledging the consumer goes a long way.
Matthew Malin [00:40:32]: How about just getting a gift box in the mail that’s beautiful and perfect, like that you unwrap it and it was exactly the way that somebody wrapped it for you, and they took time to detail it, to put a sticker on it, to put a ribbon on it, to do the tissue paper, to have it laid perfectly in that box so that as it travels hundreds or thousands of miles, it gets delivered exactly the same way so that somebody thought about you to that level. Like to me, that is – maybe that’s a digital moment of service that is…I mean, we’re not there yet, but I aspire to that.
Kelly Kovack [00:41:09]: Well, I think the reality of shopping is that there’s two things that people talk about: they talk about the really, really, really good, and the really, really, really bad, and when you have a store environment, you’re going to have both, but you have the opportunity to take an unfortunate situation and correct it, and you can do that digitally as well, but you’re much further away from the customer and it’s just harder, and the problem is when you’re communicating online, you know, whether the other person is nice at the end of the line, if you’re angry, they’re angry, and you don’t know how to read people, and it’s just this barrier between you and the customer, and it just becomes a transaction.
Matthew Malin [00:41:52]: I’ve never ordered anything from Joe Malone now that it – from a digital perspective now that Estee Lauder owns it, but you know, one of the things Joe Malone was always known for was that if you went and bought something from Joe Malone, it didn’t matter what it was or how expensive it was, you received it in this elegant gift box that was, you know, tied with a ribbon, and everything just looked so perfect all the time, and people went to Joe Malone for that, in my opinion, more than they went to Joe Malone for the fragrances. This is a special experience.
Kelly Kovack [00:42:23]: And, it doesn’t necessarily have to be packaging; obviously, we live in a world where we have too much packaging, so maybe a better gift is to be more minimal and environmentally friendly, so there’s lots of different ways you can tell your brand’s story. It’s not about just getting the big fluffy, you know, like Russian eggs, pulling one box after another, there’s other ways to give a great customer experience and to tell your story, even if it isn’t overtly apparent.
Kelly Kovack [00:42:59]: Well, you know, that kind of brings me to my next question, which is, you know, you’ve grown from one store and a tight range of product to a brand that has a global footprint. I don’t even know how many people you have working for you, but it’s certainly not the handful you started with. But yet, you talk about all of these details, I know you had a vision for the brand, and you’ve built a culture around that business, and also, you know, you guys are both incredibly disciplined. So, how did you kind of fuse all of that to create a culture that supported the growth to where you are today, and scaling a team that buys into that?
Matthew Malin [00:43:44]: Not easily.
Andrew Goetz [00:43:46]: I mean, definitely not easily, but I think the more important thing is not quickly. We always have this motto that we are going to be the tortoise, not the hare, rushing to the end of the precipice with all of the other lemmings. We do things our way, the way we want it, whether it was in vogue or out of vogue, and I think that kind of integrity that we infused in the brand early on was really, really important, and it carried on through product development to how we built stores, where we built stores, who we hired, and yeah, of course we’ve made mistakes along the way, but I think the overarching concept was this idea like, it’s not a race. Let’s do quality. Quality really matters, integrity matters, and those are the tenants of the brand since day one.
Matthew Malin [00:44:32]: However, I mean, you know, just to give some transparency as well, and you know this, Kelly, we took an investment five years ago, a little over five years ago, which has been positive for us. It’s allowed us to grow and to develop. Pre-investment, so just five years ago, we probably had…I don’t know for sure, but I’m going to say 50 people in the entire company worldwide. We had maybe three stores, today we have 14. We’ve ramped up, you know, the rest of those stores in a five-year period of time. We’ve gone from 50 employees to let’s say 140, pre-COVID, and you know, that’s a huge jump. It is very difficult for two people who were invested in every single employee’s hiring, mentorship, and development to having to let go of that and not be invested on the same level because we’ve hired directors who are now doing that on our behalf. Just getting all of these people ramped up in a way that we really feel is as detailed as we want it to be hasn’t happened until probably just recently, so it’s been a growing pain over the last five years of getting people in place, hiring at a faster pace as we develop our business at a faster pace, to be able to manage these details in the first place, and now our jobs today are really just about that; we’re just managing the details, and luckily, we’re here to be able to do that, and I feel confident about that, but it has been a struggle, it has definitely been a struggle.
Kelly Kovack [00:46:16]: Well, you know, I was going to ask about the investment, I wasn’t sure you were going to talk about it because you often – you don’t, but no, it’s interesting, because now, you know, valuations and who’s invested in you has almost become like a marketing message, and that was never what you guys were about. I mean, you waited a decade, and I’m sure there were no shortage of investors trying to woo you or strategics interested in acquiring you, but why did you decide it was time to take outside investment, and why Manzanita? I mean, they are a very sort of special group.
Matthew Malin [00:46:53]: Yeah, I mean, I’ll talk about it first because I was probably more the catalyst. We had a lot of opportunity for investment throughout the course of our business. The business was profitable in its first year, and successful within its first year, and remained consistently at a growth trajectory and at a profitability development for the ten years before our investment. So, there was a lot of desirability, it just remained small because like you said, we were very focused, and we were very intent on doing things in a very calculated, specific manner. As we had had a ten-year relationship before the business, and now a 20-year relationship upon taking an investment, we were getting older, we don’t have any children to leave the business to, and you know, putting the business between the two of us creates stress in ways you don’t have if you’re not in business together, and so we really started to think about like what this meant for us, and could we have a partner who could sit between us and allow us to not be stressed out, to have a relationship again that was important, and really have other things in our lives than just the business? So, Manzanita had come along and it’s a family fund, it’s funded by Bill Fisher who is one of four family members from The Gap and only those family members are involved in the funding, and he runs it, specifically, and they started a business from scratch themselves. His parents started The Gap and grew it into this humongous behemoth that it is today, and it was quite interesting in terms of symmetry, and if you know anything about family funds, which we didn’t at the time, but what we had learned was that they usually hold things, they’re not necessarily interested in flipping businesses just for the sake of flipping them, but there’s a commitment to them, and that’s what he had always told us from day one as well, and it’s what we found. You know, we enjoy working with him; he has an – and he’s a retailer, he has an interest in retail, and he’s just a really nice human being.
Andrew Goetz [00:49:09]: Yeah, I agree.
Kelly Kovack [00:49:11]: That’s it? That’s all you have to say after all of that?
Andrew Goetz [00:49:15]: Quite honestly, if it was up to me, I would have never taken the investment, but we had to juggle a relationship and you know, some tension, and it seemed like the best decision to go forward. I think Manzanita is an interesting organization, because they’re very focused in beauty, and as Matthew mentioned, they’re family-run, and we wanted something small. You know, quite frankly, we could have gone with a much bigger organization and passed our chips in, but we weren’t interested in cashing out, we were interested in growing something and being an integral part of that journey, and Manzanita allowed us to continue to do that.
Matthew Malin [00:49:54]: Yeah, and had we gone with just, you know, a PE of some sort, you know, and there was one in particular that had offered us, financially, a really nice out, and we have not done badly on any level, but the intent was that we would be there for like a year, they would push us, at mass, as hard as they could, the valuations would skyrocket, supposedly, and that would be it; it would be over. First of all, we didn’t want to do that to our business, because it is our baby, and we don’t have any children.
Kelly Kovack [00:50:33]: It’s your legacy.
Matthew Malin [00:50:34]: Yeah, it’s our legacy, and we want the best for it, and we wanted to stay involved, and Andrew was very specific about that. He was like, if we took an investment, “I want to be involved in the long term,” and so the intent was to stay in the business for as long as we can and they are interested in having us, and the partnership continues to thrive and be great.
Kelly Kovack [00:50:55]: I mean, I feel like the beauty landscape and the role of money has changed things so much, and it’s really sort of – your story is very rare, like why you decided to take the money.
Matthew Malin [00:51:12]: Well, we started talking to businesses, as they approached us, when we were probably four or five years old. So, it was another five years before we actually took an investment. So, we had five years to…
Kelly Kovack [00:51:25]: We took the meetings, but not the investments.
Matthew Malin [00:51:28]: And, there were a few companies that we took meetings with more regularly, and got to know quite well, and we also got to learn, again, it was sort of like the MBA experience of learning what this is all about. What does PE mean? What does BC mean? What’s a family fund? What’s the difference amongst them? Versus a strategic, like an LVMH or L’Oréal, and what does that mean for your business and how do you stay involved? We got to sit with founders who had sold their businesses, like we met Essie from Essie Nails and we heard about her experience and we knew Lev Glazman from Fresh and we heard about his experience, and so there were all of these wonderful opportunities to learn like, how people had done things, what they liked, what they didn’t like, what worked, what didn’t work, over a long period of time, and like making a decision with a wholesale account with distribution, really making an informed decision that we felt was best for us and the business.
Andrew Goetz [00:52:26]: At the time, yeah. You always utilize all of the knowledge that you have to make the best informed decision.
Kelly Kovack [00:52:31]: Right. So, the beauty industry has evolved so much since 2004. What was the change that’s had the most profound impact on your business, do you think?
Matthew Malin [00:52:48]: Probably digital, I guess.
Andrew Goetz [00:52:50]: I mean, that’s across the board.
Matthew Malin [00:52:52]: I mean, that’s not a very exciting answer, but we launched with our own store and e-comm website – so, six years ago, we launched with an e-comm website, and then Barney’s New York domestically, both coasts, and then Liberty in London, so we had an international component, a national domestic component, that included our own website, and the website didn’t really take off until year two or year three in a way that was noticeable; not even great, but just noticeable. But, by year five, our Chelsea store remained the single point of distribution, by year five, I think it was rivaling the Chelsea store, and by year six or year seven, it had become our biggest point of distribution in the entire world, and has remained that to today.
Andrew Goetz [00:53:43]: Yeah, and while I think certain other things, I mean, we had never been trend-oriented, so as we saw all of this complexity towards K-Beauty, and everyone was just like, protocols, steps, and this and that, we always held true to what we were doing. When the clean beauty has come along, which is fantastic, we were already doing that, so in some ways, as you said, we were very much ahead of our time, but we also didn’t get caught in the trap of “Oh, everyone’s marketing over here!” We always stayed – so, it didn’t matter what was happening, the changes in the beauty world, is I guess what I’m trying to say, because we always had a mission to do what we were doing and not to really waver from it.
Matthew Malin [00:54:24]: And, isn’t that another component that you know, you talk about old school retailing and merchants, etcetera, and then the other thing you always hear is “stay focused,” and it is one of the hardest things to do when you don’t have enough money coming in and you need to generate cash, how do you stay focused to who you are and your mission? And, somehow, we would always have these conversations when we had to have them about changes or fads or trends or whatever, needing of money, and we would just say, “But this is who we are. Can we continue to make this work and just rely on what everyone says, stay focused and do what you’re doing?” and I would say maybe 90% of the time, we’ve been able to do that.
Kelly Kovack [00:55:09]: You know, what I find really interesting, one of the trends, it’s kind of like that indie beauty trend, which is sort of the unisex trend, and you know, I think that – and you probably have a different perspective because you intentionally sort of want to incorporate men, but as sort of small, self-funded brands, you almost have to have a unisex positioning, because you want to cast the widest net, right? So, it’s not, when you think of unisex brands, it’s like Malin & Goetz, Kiehl’s, Aesop, all sort of non-gendered at the end of the day. So, it’s sort of interesting, again, it’s kind of like an old school thing that has become sort of this white hot trend, if you will.
Andrew Goetz [00:56:01]: I mean, the whole concept of the brand is to take this concept of a traditional apothecary and modernize it, and if you had gone into a traditional apothecary at the turn of the 19th century, the chemist or pharmacist didn’t ask you if you were a man or woman, if you needed some kind of cure or you had some kind of ailment, he described what was going to help you. So, in some ways, although it’s very modern to be unisex, it’s also quite traditional, and the same for fragrance, you know, going back to the old fragrance houses, fragrances were not divided by gender; everyone shopped for the same one. You went to a perfumer, and men and women wore the same ones. So, in some ways, we’re just going back to the roots of a true apothecary perfumery.
Matthew Malin [00:56:48]: Yeah, I mean, we didn’t invent this, we reinvented it to modern, but even if you think about what apothecary is, it’s a pharmacy basically, and the modern pharmacies, like Duane Reade, if you were to have gone into a Duane Reade 20 years ago or 30 years ago, what did you buy? You bought Neutrogena, because it was like the fancy product in the drug store, and it was unisex. You bought a bar of glysterine soap, and it was easy and uncomplicated and it was really good, and that’s what you did. So, we just sort of brought that to luxury, and yeah, in terms of like this red hot trend in terms of unisex, I think people have just realized that skin really is skin, we’re oily or dry, and when we talk about inclusivity, it’s really just about that. We don’t need to make any other claims or to talk about any other groups, this is just about are you dry or are you oily, and what’s the simplest way that you can take care of that and still look great?
Kelly Kovack [00:57:53]: Yeah, you know, it’s very interesting, because I think a lot of the things we’re talking about were constructs that marketers put in place. So, somehow, it became easier to market fragrance if there was a male fragrance and a female fragrance.
Matthew Malin [00:58:10]: Not easier, it generated more revenue.
Kelly Kovack [00:58:12]: Well, generated more revenue, but it generated more revenue, but the messaging was also very specific: one was very floral, then the other was…and, I think it’s harder to be very focused, and you can’t really hide anywhere, right, when you simplify messaging, you kind of have to show up with the goods.
Matthew Malin [00:58:38]: Yeah, it’s very true, and honestly, I think that that’s probably been one of our…one of the things that we could have done better. We both come from marketing backgrounds, and because we had several messages within the brand that we felt were really part of who we were and what we were about, that we were from New York and we wanted to make things simple, and it was unisex, and it was about balance and all of these sort of simple ideas, it’s hard to really communicate – we found it hard to communicate a singular message really easily, and so as marketers, I don’t know that we did that in as easy of a manner to other brands that maybe weren’t as complex, you know, have done.
Andrew Goetz [00:59:24]: Yeah, we have two names in our brand, so already, it’s complex.
Kelly Kovack [00:59:31]: Well, kind of like our dinners, where we’re the last ones in the restaurant and we’re turning the lights out, we have been chatting for an hour. I know, crazy, right? So, just kind of in closing, you know, there are so many young entrepreneurs in the beauty space. If there was one piece of advice that you could give them that you think would sort of fundamentally change how they go about building a brand or running a business, or, you know, have success, what would that be? Well, you can have two things – you can each have your own thing.
Andrew Goetz [01:00:13]: Yeah, I mean, there’s a lot of things. I think it’s difficult to sum up in one word, but I do think that you need your own concept, and I mean, I know the wheel has been reinvented a million times, but you have to have your own special wheel, and without that, it’s just another “me too” in different packaging; there has to be something unique about your mission, and I think when that happens, there’s passion, and people tap into that and they gravitate towards it.
Matthew Malin [01:00:44]: You know, since it’s been presented this way, I would agree with Andrew; I would say that a point of difference, or innovation, becomes essential. I mean, if you’re just another “me too” brand out there, you’re really struggling to find your footing, when you can really fill a void in the marketplace, and do something unique and interesting that people haven’t encountered, or haven’t encountered for a long time at least, you really do set yourself apart, and if you can stay focused to that…
Andrew Goetz [01:01:16]: That was our whole raison d’etre, the whole idea of our brand was to uncomplicate skincare.
Matthew Malin [01:01:22]: And to do the opposite of everybody else.
Andrew Goetz [01:01:24]: Yeah, everybody was doing the opposite.
Matthew Malin [01:01:26]: I mean, we really were like, “Okay, let’s just do the opposite of what everyone else is doing,” and it’s kind of what we did which gave us our point of difference.
Kelly Kovack [01:01:33]: Wow. Thank you guys. There’s so much good information that I think you guys shared for other people running brands, and I really look forward to the day where we can have dinner in person again.
Matthew Malin [01:01:47]: Us too.
Andrew Goetz [01:01:48]: I know, I’ve forgotten how to use cutlery.
Matthew Malin [01:01:50]: Thank you for taking us through this all over again. As many times as you say it, it always feels new again, especially now that we have 140 employees, you know, training them and having them hear this so easily and smoothly as you’ve been able to help us do is a real pleasure.
Kelly Kovack [01:02:07]: Well thank you, it’s always easier to do when you know, you have sort of a vision and a relationship with people. So, I have a different perspective of your business and your path than you do, but I’ve kind of been there every step of the way, so it’s always sort of fun to kind of walk through it.
For Matthew and Andrew, it’s a matter of time. From one store and a tight range of products, Malin & Goetz created a global footprint, built on a foundation of branded stores and hand-picked neighborhoods and carefully chosen retail partners. Behind the scenes, the engine that drove the growth was a clear vision, discipline, a culture that supported the ethos of the brand they were building: every relationship mattered. For a decade, Malin & Goetz built a profitable business that was scaling. They built a brand that punched far above its weight class and remains as relevant and innovative today as it was when they launched. Their intention was to build a brand that would last; a legacy brand. After all, their name is on the bottle. Eventually, Matthew and Andrew, after much consideration and vetting, took on an investor who aligned with their vision. Sure, it changed things, it always does, but the soul of the brand remains intact. Manzanita allowed them to put their foot on the gas and expand more aggressively, yet if you ever step into one of their stores, they’re still very much a modern neighborhood apothecary. So, in the end, it’s a matter of time. I’m Kelly Kovack, see you next time.
Matthew Malin [01:03:53]: Hi, I’m Matthew Malin and this is Andrew Goetz, we’re Malin & Goetz, and what matters to us both is time.
Andrew Goetz [01:04:01]: Yes, time, a time when Corona will be behind us, a time when Trump will be behind us, a time when stores will be open again, there’s so much to look forward to in the future.
Kelly Kovack [01:04:13]: It’s A Matter Of is a production of Beauty Matter, LLC, copyright 2020. You can find more content and insights on www.BeautyMatter.com, and follow us on social media @BeautyMatterOfficial.
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