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I knew something strange was happening at Mary Kay Cosmetics when they hired me as a beauty consultant. The Texas business sensation of the seventies and the early eighties certainly should not have to resort to hiring a young male with no sense of coloring and no experience in the you-can-do-it-now world of inspirational cosmetics sales. These days, however, Mary Kay will hire almost anybody. Why? Because the number of Mary Kay recruits—the lifeblood of any direct-selling firm—slid from 194,586 in 1983 to 151,615 at the end of 1984. Its consultants still outnumber the employees on the global payroll of Exxon, and Mary Kay says that it still has more women earning $50,000 a year than any other company in the world. But Mary Kay, which was founded on the aspirations of the women of the late sixties and the seventies, isn’t faring well with the new dreams and lofty goals of the woman of the eighties. And that has placed the 22-year-old company at its most curious crossroads.
I had been to the headquarters of Mary Kay Cosmetics in Dallas before, to write about the company when times were blushingly good. I had sat among the plastic roses, statues, and cream-colored couches in the office of the queen, Mary Kay Ash, the former Stanley Home Products saleswoman who once won a male-dominated sales contest and received a flounder light as her prize. She vowed to someday create a company that would reward women on their own terns. Mary Kay dazzled me with success stories while her personal totems told their own tales: the flawless makeup, the ring-finger diamonds, and the $14,000 diamond-encrusted bumblebee perched on her shoulder. The bumblebee, she said symbolizes that can-do enthusiasm of Mary Kay Cosmetics and therefore the American woman. “Its body is too heavy, and its wings are too weak to fly, but the bumblebee doesn’t know that, so it keeps on flying,” she said. “That’s just like women!”
But now Ash and her son, chief executive officer Richard Rogers, were trying to shield the company from the prying eyes of Wall Street by preparing a leveraged buy-out of $381 million worth of outstanding stock while its value was at a low ebb. Previously, other setbacks had rocked the once indomitable pink lady: a 40 per cent decline in pretax income (not including real estate sales) and a $46.3 million decline in sales between 1983 and 1984, the decision to sell Mary Kay’s national distribution centers, and rumors of takeovers. Things were not looking up for 1985; the company reported a first-quarter drop in sales and earnings.
On my second visit to Mary Kay, however, I sneaked in the back door, registering unrecognized and adopting the foppish air of a hair and nail designer, for a glimpse into the company’s heart. I had to see the 151,000 beauty consultants and sales directors who, in the past, had made Mary Kay the fastest-growing cosmetics company in history.
“Welcome to our world,” a woman said from the back of the Mary Kay classroom. She was talking to me, the lone male recruit at one of the nightly pep rallies at the headquarters. Standing in front of the class for my informal introduction and indoctrination, I surveyed the future of Mary Kay. Here was a group of fresh beauty-consultants-in-training: two pinkish moderns, seven black go-getters, an oriental housewife, one blond beauty queen, three Junior Misses, a few know-it-alreadys, a brace of retirees, two polyester puff heads—and me.
To those women, the reports of Mary Kay’s declining sales and dwindling force of beauty consultants are as distant as the company’s heady prize for the highest sales, the coveted pink Cadillac. The recruits were more interested in getting at the Mary Kay money. Earlier, in the building’s portrait-lined hallway, we had seen the Mary Kay legacy: the former nurses, models, teachers, shotgun-shell packers, and rodeo queens who had been transformed into the Mary Kay Millionaires, sales directors with finely tuned positive attitudes who have earned $1 million in commissions, reaped Mary Kay’s bounty of prizes, and lived in palatial homes with grandiose names like “Tara.” To get that type of satisfaction, we were told, the first duty of a Mary Kay recruit is to rid herself of negative outlooks. That requires regular attendance at sales meetings, which begin with sing-alongs (“I’ve got that Mary Kay enthusiasm!”) and end with inspirational speakers, tutoring, and skull sessions.
After her first taste of the Mary Kay doctrine, the recruit is encouraged to make a commitment by purchasing the sample- and instruction-filled $91 beauty case and by placing an initial cosmetics order. Next the newcomer must memorize the basic Mary Kay sales spiel, recited at my meeting by sales director Mary Dell, a poised, intelligent thirteen-year veteran who said that she had missed only one sales meeting, on the day her husband returned from Viet Nam. She started the session by passing out a pink photocopy of her monthly earnings—about $4000.
Dell defined the Mary Kay sales objectives, which can be summed up roughly as follows. Call all the humans you know or bump into, and gingerly persuade them to allow you to present the cosmetics in their home. Once they accept, tell them to invite their friends, then march in with your pink beauty case and sell the products. After you’ve sold makeup to the women, recruit them into the program and collect 4 to 12 per cent of their sales. Beauty consultants buy wholesale products from the company and mark them up 40 to 50 per cent for profits. They also find bonanzas in reorders, “dovetails” (15 per cent of sales if another consultant handles your show), tax deductions from a having business in the home, at-cost insurance, and prizes for sales results.
In two hours Dell had us hung ho and ready to make over the world. She recited a litany of Mary Kay tips. On selling cosmetics: “Look then right in the eye. Pat their shoulder. Compliment them sincerely.” On balancing work and home life: “If you’re a homemaker, have all your housework done by nine a.m. It doesn’t make sense to be cleaning the commode when you could be making a thousand dollars!” On recruiting: “You know, TI laid off a bunch of people. Mostek laid off two thousand people. People who want jobs! People who want to work, just like you!”
Where is the Mary Kay woman of the eighties? Does she want to knock on doors, cold-call prospects, base her work in her home? Is recruiting her neighbors into a cosmetics program one of her priorities? And are women who might have been at home for an afternoon beauty show in 1972 at home during the afternoon today? Does the woman of the eighties seek on-the-job satisfaction in diamonds, furs, ceremonial pins, shopping sprees, and pink Cadillacs? Or are those outdated, immature, even sexist tokens of appreciation? Can Mary Kay appeal to its second generation of women?
That is the ticker in the Mary Kay time bomb, the problem that no land sale can remedy. As inspirational speaker Bill Cantrell told a Mary Kay group, “You are the walking, talking, marketing arm of Mary Kay. If Mary Kay didn’t have you, how would they market products? Over the counter? Or on late-night TV, with a one-eight-hundred number, offering Cap Snafflers and Ginsu knives with the cosmetics?”
Amid the flood of Mary Kay promotional materials is a brochure that calls the company “equal to the aspirations of today’s young women.” Another quotes a 1972 Newsweek article: “Mary Kay has liberated more women than Gloria Steinem.” That may have been true in 1972, but one doesn’t see too many budding Gloria Steinems in today’s Mary Kay. Instead, the company seems to be filled with women with traditional values who have been liberated by Mary Kay’s unique vision. Women searching for self-supporting careers were in evidence, but the few recruits I met were Dallas schoolteachers moonlighting to make extra cash or to brace for part-time retirement, secretaries working an extra job, housewives seeking a world outside the home.
Mary Kay was just a Texas business beauty selling at $9 a share until its annual seminar in 1982, when the company was noticed by several analysts from the New York brokerage firms of Merrill Lynch and Kidder Peabody. “They were so impressed with all the hoopla they went back and published fashionable reports,” says Eugene Melnitchenko, a Dallas-based Rauscher Pierce Refsnes stock analyst who has followed the cosmetics and health-care industries for eighteen years. “And the stock took off.”
When Mary Kay stock soared to $44 a share in April 1983, the company began an unparalleled expansion. But by the second half of that year, earnings had declined 42 per cent. The bottom had fallen out of the direct-selling industry. Fewer women wanted part-time employment; as the economy recovered and inflation slowed, they were looking for jobs that offered more-rewarding careers.
In the 1983 annual report, Richard Rogers outlined a new plan for the consultants, with increased recruiting commissions for higher sales, a better chance to win cars and prizes, sales bonuses for directors, and increases in the size of minimum orders for discounts.
While the company was raising sales rewards, it was also raising cash. Land for its North Dallas campus was sold, and four of the company’s national distribution terminals and the corporate headquarters are on the market. When all is sold, Mary Kay’s cash balance sheet will be boosted from about $60 million to $120 million. The cash, along with outside loans and funding, will make it relatively easy for the company to purchase the 21 million outstanding shares. “Then they will own the company scot-free,” says Melnitchencko. “As a private company, they will be more competitive by rewarding consultants more generously.”
Meanwhile, the first quarter of 1985 was dreary—sales decreased 14 per cent, earnings were down 30 per cent over the same period last year. But Melnitchenko expects a quick improvement because “they’re in the skin-care business, one of the few remaining growth segments of the cosmetics business. I see business recovery. I see good trade in stock. But there are questions. It’s not that Mary Kay’s products are losing appeal. It’s that the method of direct selling has lost appeal.”
If I had my own sales director, I figured, she could provide insight into those questions. Three times I approached the company in an effort to find a director. The first call was answered with a letter on pink stationery, thanking me for my inquiry and referring me to “the finest Mary Kay consultant” nearest me. I decided that the woman lived a bit too close, especially after I passed her home and saw three pickups and a yardful of Dobermans. The second name was listed under Mary Kay in the phone book. However, the woman was always either asleep or out of the house. When we agreed to meet she couldn’t decide whether to do it at a “ladies’ lunch” place or a North Dallas deli. She said she would let me know, but she never called back.
My third attempt, a phone referral from the company, was ideal, a Mary Kay madonna. Because she was so kind, sincere, and professional and because she called her troop of consultants the Angels, I began to think of her as Angel. She left the message “Have a happy Mary Kay day” on her telephone answering machine. “My philosophy is never to push or pressure,” she said at our first meeting, in the sunny lounge at the Mary Kay headquarters. “I figure if you want to do this, you’ll do it at your own pace.”
Angel also gave me a chance to back out. “Now, there are men doing Mary Kay, but it’s difficult for men,” she said. “For example, if I told my husband, ‘Well, dear, Mark’s coming over to give me a facial this afternoon,’ you know how he’d probably react.”
A few preliminaries were in order. First she told me the Mary Kay creed: “God first, family second, career third.” Next she informed me that I would never want for money again. “Whenever you need money, just go out and sell some Mary Kay,” she said. She taught me the fundamentals and set forth the company rules: no smoking, no denim. Look like a pro, she advised, eyeing the blazer I had pulled from the mothballs. “Remember, you’re a beauty consultant. You’re the president of your own company!”
Later, she told me her story, the story of many Mary Kay girls. Once a Suzie Homemaker, she was suffering from a chronic lack of self-confidence when she entered the program sixteen years ago. At that time she and her husband could hardly afford the $18 for the beauty case and registration fee. After she joined, she worked purely part-time and sometimes not at all. “It was just my piddling pink thing,” she said. But once her children were grown, she began a slow, steady climb to the summit, becoming a sales director, complete with a pink Cadillac and a brand-new life.
On the day my beauty case arrived, a pivotal day in a consultant’s career, Angel took me to her Cadillac in the company parking lot. There were so many identical Cadillacs in that lot that it looked as if a street gang had gone crazy with a case of Pepto-Bismol. Angel had to check the license plates to see which one was hers. When we found it, she presented my beauty case, which was in a box painted with pink butterflies. She also showed me a rabbit fur coat that I could win by selling $1800 worth of wholesale cosmetics.
In the following weeks Angel guided me through a steady diet of advice, motivation, and seminars. At one meeting she gave me a golden 1985 Monthly Minder, which became my Mary Kay diary. Here are a couple of entries.
Tuesday: Big day! Got my beauty case! Took it home, listened to enclosed cassette with introductory speech from Mary Kay! All of the creams, emollients, and powders come in numbered tubes, which makes it easy to assemble in the showcase.
Friday: Scheduled to watch an actual beauty show! Was supposed to meet Faye, a moonlighting Trailways bus company secretary, to watch how she performed at her first beauty show. Arrived at her home on time, but nobody was there. I waited in the parking lot. Two rough guys came over and asked me what was in the two pink cases. “Mary Kay beauty supplies,” I said, somewhat miffed. I left the parking lot in a hurry! The recruit and her guests were all no-shows, a frequent Mary Kay malady.
My own first show was fraught with pitfalls. The house was a mess, I had no refreshments, and I suddenly realized that I knew nothing about giving a facial.
Luckily, my director had told me, I didn’t need to know much. The beauty consultant’s guide outlined an entire show. Also, we had watched a movie illustrating “the perfect beauty show.” The starring consultant, who strongly resembled Dallas‘ villainous Morgan Brittany, torpedoed a group of ideal clients, complimenting and chattering her way into selling all of them an array of cosmetics.
My show was nothing like that. To be honest, I blew it. An experienced beauty consultant could have sold these three women the entire Mary Kay headquarters and distribution centers too. But I couldn’t sell them an eyebrow pencil.
The first problem was that they came into the show with negative feelings. They were old friends who thought they were doing me a favor by attending. Then something miraculous happened. They sat down before their tiny mirrors, filled out their Mary Kay Skin Care Profiles, cleansed their faces, applied the Magic Masque, and got caught up in the mass-produced magic of Mary Kay’s personal brand of attention.
“Hey, I can feel my face begin to tingle!” said one.
“I like this part, the cleansing and the mask,” said another.
“The containers are really nice.”
I was reciting the show step by step from the guide. With the third step—applying the freshener, Mary Kay’s “liquid gold”—came problems. I had forgotten the beauty consultant’s most important tools: warm rags and cotton balls.
The women were forced to wash off the Magic Masque in the kitchen sink. While they were washing, I eavesdropped on their conversation.
“I don’t really use a mask and the other skin-care products like I should.”
“Maybe we should buy some. How much is this stuff?”
But by the end of the show, they had lost interest, mostly because of my bumbling sales pitch. Rouge was too old-fashioned, they complained. The lip colors weren’t exciting enough. They trashed everything but the skin-care set. “The makeup looks too matronly,” said one.
I got down on one knee. A sales director had said that this eye-level, back-patting pose worked wonders for show sales. But I wasn’t giving reassurance or praise. I was begging for a sale.
“Just try the five-steps-to-beauty set!” I pleaded. “I’ll take a postdated check! Or you can write half now, half on delivery.”
Later, sitting amid the powder- and Q-tip-strewn aftermath of my show, I had a horrible thought. Had I been converted? I had followed the company’s advice and turned off my radio to listen to motivational tapes instead. And I had begun using Mary Kay’s scheduling sheets to organize my personal and business life. Had Mary Kay already begun to manage my life?
One night, after a particularly inspiring seminar, my sales director told me that because God guided her Mary Kay career, she believed that I had been sent to her from the Lord. When her eyes welled with tears, I felt like a ruthless heel, an invasion of negativity into her perfect pink place. What would the girls do when they discovered me? March me into the fields, strip the beauty case from my hand, rip the pendants from my blazer, take my datebook, my color chart, and my Mary Kay rosebush, then leave my remains for Avon, Fuller Brush, or, most dreaded of all, the embattled Herbalife?
That night I drove out to the site of the 176-acre North Dallas dream campus where, in a perfect world, Mary Kay’s legions would have converged in the first $100 million cosmetics college. Now the dream is on the auction block.
Will the company bounce back? The stock buy-back is a step in the right direction and a sign of better days ahead. Analysts remember a smaller but similar move in the seventies when Mary Kay bought back a chunk of stock just before the price rose. But does Mary Kay have the savvy to inspire the women of the eighties? Or will the dwindling ranks of recruits and the new wave in over-the-counter designer cosmetics signal a slow end to the company’s rose-colored world?
That’s something the cash-hungry Mary Kay beauty troops would rather not think about today. Maybe they’ll be forced to think about it tomorrow. But for the Mary Kay masses, as determined as Scarlett O’Hara on the cherished steps of Tara, tomorrow is another Mary Kay day.
Mark Seal, a freelance writer, lives in Dallas and writes for Time.