Beauty CEO Manna Kadar isn’t a stranger to down cycles.
“This is my 25th year in beauty. So, it’s my first pandemic, but it’s not my first down cycle with recessions and housing downturns and you name it.”
As a result, the maker of makeup, skincare and other beauty products evaluated opportunities to anticipate where the market was heading when millions of dollars in retail orders evaporated during the COVID-19 crisis for her Irvine-based Manna Kadar Beauty Inc.
She opted to focus on more cost-conscious items that’s pushing the business into more than 20,000 new doors and helping offset the orders lost during the quarantine.
“One of our mantras to the brand has [always] been affordable luxury and we have various lines of business that funnel into that,” Kadar said.
“But as the pandemic hit and retail just shut down completely, we were unfortunately one of those businesses that had all retail sales completely come to a halt, so that sparked my entrepreneurial side and I asked ‘OK, where’s the [future] demand going to be and what relationships do I already have that will support that?’”
When unemployment rates continued to climb and the length of stay-at-home orders became less and less clear, Kadar said offering more affordably priced items made sense. These items will exist under the Goddess by Manna Kadar line and launch with about 15 stock-keeping units (SKUs) priced under $10.
The new business pushes her name into discounters Five Below Inc. (Nasdaq: FIVE) and Big Lots Inc. (NYSE: BIG) with holiday gift sets later this year.
“It’s interesting,” Kadar said. “These stores are not sexy names, but they are really resilient during these turbulent times.”
Kadar, who founded her beauty business in 2011, was on the Business Journal’s list of the fastest-growing private companies in the category of $10 million in revenue or less. The company closed the 12 months through June 30, 2019 with $6.5 million in sales, notching a 41% increase from 2017.
The business consists of Manna Kadar Bath & Beauty, Haute Dog, Mason Man Skincare and Beauty & the Bump. The products are sold at retailers including Ulta and Urban Outfitters, as well as beauty box subscription companies and home shopping networks.
Kadar also created an antibacterial line of face washes, toners and hand sanitizers in response to the pandemic. She expects those products to launch in the fourth quarter with hand sanitizer priced around $8; they will be branded under the Manna Kadar Beauty line.
Kadar said despite the slowdown in business over the past three months, she expects the company to hit its targets for this year given the new accounts she’s been able to bring in.
Order demand is now picking up among retailers—sales have surprisingly strengthened as stores found the need to replenish inventory levels, she noted of her conversations with retail partners.
The CEO described the experience of the past few months as an exercise in “survival of the fittest” and knowing how to keep the business moving with the broader industry and economic currents.
“Every time something big like this happens, there’s a certain sector in the market that is always successful, which is the lower-priced opportunities for the consumer,” she said.
“The consumer is still looking for all the things they had before, but they can’t afford it anymore. So rather than going to Neiman Marcus, they might go to Last Call or Nordstrom Rack.”