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The Guardian - UK
The Guardian - UK
Business
Joanna Partridge

Beauty Pie founder Marcia Kilgore: ‘We all need that lift, don’t we?’

Marcia Kilgore: showing little sign of slowing down.
Marcia Kilgore: showing little sign of slowing down. Photograph: David Levene/The Observer

By any measure, founding and then selling two companies would be enough for most people to retire happy. But not for serial entrepreneur Marcia Kilgore. “I just really like making things,” says the Canadian businesswoman.

At 53, she is on her fifth venture: the makeup and skincare buyers’ club Beauty Pie. She was the founder of footwear firm FitFlop and beauty brand Soaper Duper; she sold a majority stake in her Bliss Spa skincare brand to LVMH in 1999 at the age of 30, for a reported $30m; and in 2014 her Soap & Glory affordable beauty range was snapped up by the owners of the Boots chemist chain.

“I make things I would want to buy,” Kilgore says. “I think ‘would I buy this?’ and if I would, I’d want to make it – and make it better and better and better. It’s a challenge, like solving a puzzle. I don’t know why, I just love selling stuff.”

Kilgore is splitting her time between Beauty Pie’s London headquarters, her home in Switzerland, and New York, where the company has just opened an office, and admits feeling “exhausted” after waking at 1am. But she shows little sign of tiredness as she sits in a studio in west London, talking animatedly about the beauty industry and reeling off statistics.

Kilgore has been in the industry since her late teens, although she “fell into” it, after taking a course in skincare to try to improve her acne. As a student in New York, she began giving facials to pay her way. She opened Bliss Spa in 1996 – clients included Uma Thurman and Madonna – and later created an accompanying product range.

***

CV

Age 53

Family Married with two sons, aged 18 and 15.

Education School in Saskatchewan, Canada. Studied part-time at New York University (NYU) and the City College of New York, but left without finishing as her Bliss Spa business took off.

Pay “I’m a volunteer.” Kilgore says she isn’t paid by Beauty Pie. “I’ve exited a couple of businesses,” she says. “What am I going to do – take a big salary? It’s a bit of an oxymoron with what I am doing.”

Last holiday A family trip to Costa Rica: “It was amazing.”

Best advice she’s been given “My costume designer friend Emilio told me he woke up one day and thought: why not me? Anyone who wants to achieve something can decide: yes, this is what I’m doing.”

Biggest career mistake “If I have had a gut feeling that something was wrong and let people convince me they know better. I listened to that and had to clean up messes.”

Phrase she overuses “Can someone give me access to that document?”

How she relaxes Meditation.

***

She founded Beauty Pie in 2016 in response to “egregious markups” in the sector – a practice she says she was “complicit” with earlier in her career. Kilgore recalls being told by one of the world’s largest beauty brands that they had a “cost of goods target for any product of 8%” – implying huge profit margins.

Described as a luxury beauty buyers’ club, Beauty Pie sells its own-brand skincare and cosmetics through its website at “factory cost prices” to “members” in the UK and US, who pay an annual £59 (or $59) fee after a month’s free trial. Membership lets them choose from about 400 products, developed at top cosmetic laboratories.

Beauty Pie, now with a 180-strong workforce, calls its pricing transparent because it excludes retail markups, excess packaging or the cost of in-store promotion. Orders – in signature pink boxes – are dispatched from its own warehouses.

Kilgore calls the brand “the Netflix of cosmetics”, but

bristles slightly at the term subscription service. “We don’t ship you anything; you order it,” she says. With beauty subscription boxes, buyers can’t choose what they receive each month.

Kilgore won’t reveal Beauty Pie’s current membership, though she says it has grown every year since launch, and climbed by 40% this year alone. There are plans to expand to other countries.

Membership had a boost in the pandemic, which spurred many consumers to give e-commerce a whirl, but Kilgore says few members have left and describes the brand’s retention rates as “off the charts”.

But in a cost of living crisis, will cash-strapped consumers have enough disposable income to buy from the Netflix of cosmetics? And will its annual subscription – sorry, membership – fee fall foul of the exodus that is hitting Netflix and Amazon Prime as households count their cash? Kilgore says Beauty Pie has not yet seen any changes in customer behaviour, and experience has taught her that sales do not necessarily drop off during a downturn.

“I’m in makeup, skincare, beauty and shoes. We have been through several crises, and people still buy beauty and they still buy shoes.”

Indeed, the brand’s most expensive product is also its most popular, Kilgore says, naming its £44 “Youthbomb” facial serum.

Beauty Pie made a pre-tax loss of almost £1m for the year to 31 March 2021, on about £40m of sales, according to its most recent accounts. Revenues were up 140% on a year earlier. Recent sales also suggest the return of the sometimes-discredited “lipstick effect”: where spending on small beauty products is said to rise in a recession. Lipsticks have been selling well in recent months, Kilgore says, although this could be down to the launch of several new lines.

The brand has close to 350,000 followers on Instagram, where Kilgore regularly hosts live skincare Q&As, or conducts online polls over names for new products.

She has also shared the company’s highs and lows, such as pandemic supply chain disruption– which saw items temporarily out of stock – and struggles with HGV driver shortages, clogged ports and shortages of key ingredients. This makes it “much more of a community”, she says.

Members seems to like sharing their views too: hundreds of them review the brand’s products on its website, and have also given the company an average score of 4.7 stars out of five on Trustpilot.

“She [the Beauty Pie customer] is buying into something new, something fun which is a bit of a treat, because we all need that lift, don’t we, because at the moment the news is so bad,” she says.

More widely, consumer demand for such small treats is on the up, according to recent data. Sales of lip gloss climbed by 20% in the UK this April compared with the same month in 2019, while sales of all other lip products rose by 61% in April compared with before the pandemic, according to market research company NPD Group.

Kilgore has further expansion on her mind: during the pandemic she held two rounds of venture capital funding, a first for any of her businesses. The second round, completed in 2021, raised $100m (£89m). The brand has recently branched out into clothing and beauty appliances, selling pyjamas and an electric face-cleansing brush.

But having left earlier businesses, when will Kilgore sell up at Beauty Pie?

“If I felt like I had brought all of the value to it I could,” she says. “If I ran out of ideas and thought that somebody else was better placed to do this now than me, then I guess I would consider it.”

Meanwhile, her next business idea is already under development. All she’ll say is that it is related to “wellness” and she’s working on getting a prototype made.

She laughs: “What else am I going to do all day? I’d be standing at the fridge and that can be dangerous.”

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