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AUSTRALIA’S JURLIQUE BRINGS TONY SPA-STORES TO U.S. MALLS

By Maura K. Ammenheuser

In her 60 years, Cardiff, Calif., resident Sandy Williams has used her fair share of skin-care products, including creams, gels and cleansers. But the results were always mixed.

The only brand to which she’s become loyal is Jurlique, an upscale line of skin- care and other beauty products made entirely from organic botanical ingredients. The 21-year-old company is quietly opening boutiques that include limited spa services such as facials, waxing and in some locations, massages.

“I’ve strayed and tried other things,” including popular brands such as Lancôme and Estée Lauder, Williams says, but for 18 years now, “I almost always come back to Jurlique. They feel good, smell good and my face responds.”

Another Jurlique fan, Tracy Scheschter of University City, Calif., said, “I like stuff that smells good. I like the idea of using organic herbs and aromatherapy.” But mostly, she said, “I love their products because they work.”

Jurlique, based in Sydney, Australia, operates 50 stores in 16 countries, including 14 in the U.S. Jurlique got its start selling through spas, a strategy it continues.

The company offers 200 products for women, men and babies, including a line of aromatherapy oils. Jurlique relies on organic natural compounds, grown and handpicked on two company-owned farms in Australia and processed by a patented method to maximize the potency of the plants’ ingredients. Jurlique dubs its products “the purest skin care on earth.”

Founder Ulrike Klein writes in company literature that Jurlique has benefited from a growing public consciousness of health and well-being. The stores, formally called Wellness Skin Spas, “give people knowledge and a good experience,” says Jurlique’s U.S. president, Sheila Cutner. That’s important because women are bombarded with skin-care marketing, she adds.

The hybrid shop-spas offer “a rebalancing,” according to Cutner. “It’s that sanctuary against the Blackberry and the computer and all the technology.”

Jurlique products are also available through department and health food stores and over the Internet. Spurred by healthy sales from spas, Jurlique’s leaders decided to open its own stores “to be able to give the customers the full experience of Jurlique” in a venue where it has total control of the brand, Cutner says.

Jurlique opened its first store in 1991 in Melbourne, Australia; a second followed two years later in Sydney. Today the privately owned company is slowly expanding, carefully choosing posh markets for its compact stores, which currently range from 850 to 1,200 square feet. Future locations will have 1,200 to 1,500 square feet, Cutner says.

The company’s first U.S. store opened in 2002 at Westfield Shoppingtown Valley Fair, Santa Clara, Calif., now known as Westfield Valley Fair. Today Jurlique is found in other luxurious venues, such as The Mall at Millenia, Orlando, Fla., and Garden State Plaza and The Mall at Short Hills, both in New Jersey. It also has streetfront locations.

Jurlique obviously caters to affluent women, but Cutner declines to comment on specific demographic requirements. “We’re pretty open on demographics,” he said, “because it’s more of a mind-set” that Jurlique is after. The ideal customer has not only money but also an affinity for natural, organic products.

Jurlique chooses real estate by “the mix of the mall,” Cutner said. “We look for fashion; we look for food” — destinations for home, beauty and fashion shoppers where people linger. Choosing fragrant, expensive skin creams is not a grab-and-go transaction, she says.

Jurlique plans 12 to 18 new U.S. stores by mid-2007 Cutner says, specifically mentioning the Las Vegas, Florida and Hawaii markets. She wouldn’t reveal any financial information on Jurlique, allowing only that the company is profitable.

“The quality of their products is really good. When they can get to the right people,” they will succeed, said Wendy Liebmann, principal of New York City-based consulting firm WSL Strategic Retail. Don’t expect Jurlique shops everywhere, though. “It’s beyond the mass-oriented mall” and middle markets, she says.

That’s because of its prices. Jurlique is aimed at the good-for-the-earth, not salt-of-the-earth, crowd.

Cutner describes prices as “the premium end of the skin-care market.” Indeed, neck serum costs $75 for 30 milliliters; a facial mask is $74 for 125 milliliters; arnica mint hair conditioner fetches $21 for 250 milliliters, and herbal recovery gel goes for $67 for 30 milliliters.

“The products are very, very expensive,” Williams said. She may be a Jurlique enthusiast, but she takes advantage of sales and promotions and uses the products sparingly.

Amber Schupbach, manager of the La Jolla, Calif., store, defends the prices as “reasonable” because of their potency; they last longer than comparable items from other companies, she says.

Of course Jurlique must compete with a world of other skin-care brands. “It’s a very competitive field and there are lots of players there. We all compete for consumers’ time,” Cutner said.

Not all skin-care companies have their own stores, however. Among those that do, sources most frequently cite Aveda as Jurlique’s peer. Based in Blaine, Minn., Aveda is a skin-care company with store-spas offering hairdressing, skin care and makeup. Several Jurlique landlords say their centers also include Aveda, which “strives to set an example for environmental leadership and responsibility,” according to its Web site.

Sources also compare Jurlique’s product and philosophy with The Body Shop, the 30-year-old British company that today has 1,900 stores in 50 countries. Cutner describes The Body Shop as one of the first skin-care retailers to widely market an environmental message. The retailer was acquired in March by French cosmetics giant L’Oréal for more than $1.4 billion.

However, Liebmann draws distinctions between Jurlique and The Body Shop. First is price: The Body Shop is positioned firmly in the middle market. Also, although both companies tout the environmentally friendly qualities of their products, The Body Shop takes political stands, trumpeting avoidance of animal testing and pushing products that it says have socioeconomic benefits to the Third World, for example. At Jurlique, “it’s more about the purity of the product,” Liebmann said.

Even loyal Jurlique fans have tried other stuff. Scheschter also likes Arbonne, a skin-care line that originated in Switzerland and is now based in Irvine, Calif., which includes botanical ingredients but costs less than Jurlique, she says.

The few U.S. landlords who boast a Jurlique store in their centers declined to comment on the company’s sales levels or core demographics. Nor would they discuss how they snagged this tenant when it has plenty of luxury centers from which to choose. But they did say they’re happy with Jurlique, which seems to draw a following despite little advertising or fanfare.

“Their philosophy is very inviting. They burn the oils and have teas you can sample,” said Brenda Lounsberry, marketing director at The Mall at Millenia, which opened in 2002 with Jurlique among its original tenants. People wander into the 700-square-foot shop to sample lotions and creams, says Lounsberry.

“The lavender fragrance that comes from the store fills the whole court. It’s very calming,” she said.

Jurlique occupies “a great niche market,” Lounsberry said. “It’s not something you’d normally find in a shopping center, but Jurlique with their line of products is a special store for us and it performs well.”

“It’s a really unique and beautiful product line and our customer really responds to it,” agreed Janet Cesario, marketing director at The Mall at Short Hills (N.J.), where Jurlique opened an 800-square-foot store in 2002. “This is an upscale shopping center and it has a high-fashion focus to it, and beauty is one category that does exceptionally well for us,” Cesario said. Jurlique is “the perfect blend.”

Jurlique appeals to landlords seeking ways to differentiate their centers, Liebmann says, with its wholesome, earth-friendly message. But as it grows in the saturated U.S. market in particular, it will need to strike a balance between exclusivity and critical mass.

“Jurlique has tended to be very quiet and sophisticated … but quiet beauty messages don’t really work today… they need to build awareness. They need to build some buzz around the brand.”

“It’s America. There’s a temptation to ‘massify,’” Liebmann said, but Jurlique needs to “pinpoint” its locations. “Laserlike positioning is going to be really essential.”

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