Edna Hennessee, the 66-year-old founder and chairman of Cosmetic Specialty Labs Inc. (CLS), in Lawton, Okla., is explaining her company's mission to her dinner guest. As Hennessee talks, she leans back in her chair and taps on the table with her index finger as if to quicken the pace of her Southern drawl. Since its start in 1973, she says, her cosmetics manufacturing company has launched 1,500 private-label lines. Most are for beauty salons and supply houses and for retail outlets, but at least 100 of Hennessee's customers have started their own companies, selling either door-to-door or at house parties.
"My prices are higher than a lot of manufacturers," Hennessee says. "But we give more, and we help our clients to be successful. . . . I feel that I can take 1,500 people -- some fail -- put their businesses together, and it's more than I could accumulate with my own title." In short, the more her customers grow and prosper, the more products they buy from CSL. With 225 employees, CSL is one of Lawton's largest employers.
CSL is Hennessee's third go at a business of her own. The first was a beauty salon, still lucrative after 40 years. Then she developed Marylin Miller Cosmetics. The line was so successful locally that she took the company public in 1955. Two years later, Marylin Miller Cosmetics Inc. went bankrupt, and a shaken Hennessee swore she would never work in the public limelight again. She set up CSL with that crushing experience very much in mind. She would stay in the background, cheering on all those fledging businesses and product lines. If they failed, it would be tough on CSL, but not on Hennessee personally.
Hennessee takes a maternal sort of pride in her company's role as an incubator of new lines and companies. Like other manufacturers, it has departments for mixing, bottling, and shipping products. But it also is equipped to develop special formulas according to customers' whims and to supply bottles and jars for the various lines. Its art department works directly with customers to design packaging, logos, and promotional materials, and Hennessee's son, Odus, the company president, leads classes on sales motivation and training. Hennessee even built her house to serve as a lodge for customers who stay in Lawton to develop their lines and to learn the trade.
While other manufacturers lean toward a minimum production run of 1,000 units of a product, CSL is set up to accommodate runs as small as 144. For large orders, Hennessee has a fully automated bottling operation, but it often gathers dust. Her client companies' average size is around $350,000 in revenues, although the largest brought in more than $20 million in 1984. CSL itself grossed about $4 million last year.
Nurturing start-ups is Hennessee's specialty and her prime marketing hook, but some of her customers count less on her "tender loving care" than on her skill at product development. One client who came to CSL to develop a skin- and hair-care line to augment his health-food business says that Hennessee's lure was her reputation for formulating effective products. In fact, Hennessee has produced more than 4,000 formulas. She relies on her suppliers to give her inside information on new products, and toys with new ingredients to keep her clients' offerings up-to-date. Hennessee does not underplay this skill.
"I guarantee that no one, not even Revlon, has a thing on us when it comes to formulation," she says. "If you're a little company, and you come to me, I know that, say, elastin complex [a new skin-moisturizing lotion compound] is going to hit the market. We had the complex in the field 7 months before it went on national television. Because where it takes Revlon 18 months to gear up because they're so huge . . . we get there before them. When it hits the market, we're at the point of sale, and our little people get the benefits."