What's John Maly Up to?

He’s a former megadistributor and now the owner/president of Mirabella Beauty Products. What else is he doing these days?
by Marc Birenbaum

Back in October, Beauty Industry West—a trade association serving the cosmetics industry—held its monthly luncheon meeting in Los Angeles. The event was sponsored by the Independent Cosmetic Manufacturers and Distributors trade association, and the speaker that day to nearly 100 people was John Maly, now the owner/president of Mirabella Beauty Products and a second-generation icon in the professional-beauty industry. He headed up Maly’s West, a progressive salon-products megadistributorship (with many professional-only stores and lots of DSCs) before he sold it in 2007. It’s now part of SalonCentric, the professional-products distribution operation of L’Oréal USA.

[Image: John Maly, president/CEO, Mirabella Beauty Products. Portrait photo by Armando Sanchez]

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IN THE BEGINNING ...

How did Maly start in the professional-beauty industry? He had a huge head start in his phenomenal career: He was raised in a successful family business that started in the early 1950s, and was mentored by an industry legend—his late father, Ken Maly.

Ken worked during high school in the warehouse of a Grand Rapids, Michigan, distributorship, and after graduating from high school was offered a sales position calling on salons in the area. After just a few short years, he was made the sales manager. Then after 15 years working for the company, Ken believed that he had been misled by the ownership. So with his wife Marlene and five kids at home, he quit his job.

Three months later he bought a small barber distributorship. He changed the name to Maly’s and went back on the road. It was truly a family affair with older sons Mike, Ric and Craig helping out in the warehouse, then one by one taking sales positions after completing high school. John’s sister Michele also sold for the company, then helped establish the nail- and skincare businesses for the distributorship.

By 1988, the business was recognized nationally as a well-run, sales-oriented distributorship. Redken founder Paula Kent Meehan offered Ken her company-owned distributorship in the Los Angeles area. He agreed. And John, the youngest of all of his children, was asked to move out to Southern California.

CALIFORNIA, HERE THEY COME

John moved to the large Southern California market with his wife Judy and two iconic brands—Redken and Paul Mitchell—to run what started out as a $2-million distributorship. He had the building blocks for a thriving distributorship. And with his financial background—he had graduated with a bachelor’s degree in accounting from Indiana University Bloomington and then worked as an auditor—he was ready. With 25 employees and a huge territory, it was off to work to make his own impact in the salon business.

Taking the philosophy he learned from his family, Maly soon provided an efficient operation with customer-focused salespeople, and began to make inroads against the two large, established distributorships, State and Paris Ace. Those distributorships had all the big lines and large store operations. Sam Licursi and John Tobias were also co-starting their own distributorship Innovations/Cosmoprof at the same time. The two companies took large chunks out of the giants.

As business grew for Maly’s West, Maly says he realized in 1997 that it was coming to a crucial crossroads. The company had grown in sales from $25 million to $50 million over the previous three years—but made less money, according to Maly. The company was growing itself out of business, he explains.

So the next year, Maly began building a professional management team. Starting with a CFO, John hired Ron Hock (who is currently running SalonCentric West). Maly’s West then hired Mike Seiser (who is currently running operations for SalonCentric nationally) to run operations. In the next year the company made more money than the four previous years combined, according to Maly. Rounding out the all-star team was IT director Mike Cassidy, director of stores Wayne Taylor, director of sales Glen Pacek (who is now executive vice president at Sweis), HR director Jackie Hartman and director of marketing Colin Walsh (who is now president of the Matrix haircare brand).

With his team, Maly grew the company to be the largest independently owned distributorship in the West and the second-largest in the country. His team helped acquire 18 other distributorships, and grew to 110 professional-only stores, 200 salespeople and 1,000 employees.

[Image: Courtesy of Mirabella Beauty Products]

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THE DECISION TO SELL

In November 2006, Maly was invited to New York City to meet with L’Oréal executives. The company laid out its plans to acquire its own distribution network throughout the United States, and executives wanted to start with Beauty Alliance in the South and Midwest as well as Maly’s West, according to Maly.

Initially, the Maly family was opposed to selling, he says. It was a part of the fabric of the family. Each of the family members were co-owners, and were very satisfied with the business.

But soon thereafter, the family began to realize that if L’Oréal decided to go into the West without buying its business, taking the rights to exclusive lines such as Redken, Matrix, L’Oréal Professionnel and Pureology, Maly’s West would be in trouble, notes Maly.

So in July 2007, Maly’s sold its West Coast operation, then doing $200 million a year in business, to L’Oréal. Maly stayed around for a few months. However, for him, it wasn’t the same working at the company without owning it.

LIFE AFTER MALY’S WEST

For the next six months, Maly became the interim youth pastor at his church, went on a mission trip to Cambodia and played a lot of tennis. “I have always been an athlete,” he relates. “I feel that is one of the keys to my success in business, my competitive spirit.” He loves tennis, basketball and running.

At some point Maly says he was reminded of a parable that Jesus teaches in the Bible about talents (an amount of money). In the parable, a master gave out five, two and one talents to three servants to take care of while he went away. Upon returning, the master was upset that the servant with one talent had buried it in the ground—the other servants had doubled their totals. Maly says he felt that the talent that God had given him was making money.

So back to work he went. He hired a financial person to help him use his money to begin a private-equity firm called The People Fund (thepeoplefund.net). The name is derived from Maly’s strong belief that people are the difference at any organization. During the past four years, the fund has looked at 900 different distributorships outside the salon industry and acquired three.

In addition, Maly owns Wolf Creek Restaurant & Brewing Co., which has locations in Valencia and Calabasas, California (in the Los Angeles metropolitan area).

Recently, he also acquired SportsWorx, a Web-based business that helps high-school athletes get noticed by college coaches.

As with his faith, family has always been a top priority to Maly. He and Judy, his wife of 24 years, have raised three boys: Andrew, age 21; Austin, 18; and Luke, 15. And he has coached many of their sports teams as they grew up.

[Image: Courtesy of Mirabella Beauty Products]

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THE STATE OF PRO-BEAUTY DISTRIBUTION

So what is Maly’s take on the current salon-products distribution landscape? “The salon and the needs of the salon owner have not changed in 25 years,” he says. “The industry is still 95% controlled by independent salons. They want help. They want someone who knows them, cares about them. And frankly, independent distributors do a great job of this. They don’t have enough powerful brands to have stores. So they are destined to fight Beauty Systems Group and SalonCentric with the brands that they have that get bigger. Many of these brands are going to have to be very patient to stick completely with these smaller players, as the gold of the professional-only stores is hard to not want to capture.

“I believe there will always be that next interesting creative brand that independent salons will be drawn to,” he continues. “The question will be: Are there enough of these brands that can help those smaller distributors get enough traction so they can become a real factor?

“I think it will happen,” he quickly adds. “In the next five years, there will be 20 to 30 distributors that will be doing $10 million or more each. If that happens, the cycle of this industry will start again.”

MIRABELLA TODAY

Mirabella Beauty—a mineral-based color cosmetics brand that now offer a full range of more than 200 products for face, eyes and lips for all skin tones, as well as accessories and tools—was founded by Christy Thurston, former national beauty director for Nordstrom. Maly’s West became its first distributor. When Maly’s West was sold, Maly held onto Mirabella Beauty. He became a financial partner in 2005, but remained only a board member until March 2010, he says. At that time, the operations and financial condition of the company had deteriorated, so he stepped in to turn things around, he states.

After 18 months, Mirabella did turn around, and is growing nicely as a makeup line for beauty professionals in the United States, he says. It’s now available in more than 1,000 salons nationwide as well as 600 professional-only U.S. stores. Mirabella has also expanded into six countries in Europe and Asia, and the brand is currently pursuing distribution in Canada. Its annual sales have grown to about $6 million, according to one public report. Its creative director is Amber Bowen, a key participant in the creation of the brand and a licensed cosmetologist who was mentored by Thurston.

Some of Mirabella’s most interesting innovations have come from social media, Maly points out. The company started a YouTube channel to house educational videos for professionals and consumers, he explains. With each seasonal collection, a new video is created. The link is shared with all of the registered salons. These salons are then encouraged to eblast their guests with the content. Ideally, their salon clients will watch the new-collection video prior to their next visit, then be ready to purchase.

Mirabella invited YouTube guru Kandee Johnson to Mercedes-Benz Fashion Week in New York City this past fall. Fifty thousand consumers in one week saw the videos Mirabella produced, according to Maly.

Also, Mirabella has grown its Facebook followers from 700 to more than 16,000 this year, providing regular content to its fans.

Additionally, Maly writes a blog (http://johnmalysblog.blogspot.com) for Mirabella. The content is primarily about the business of makeup. (He was writing a successful blog at Maly’s West as well prior to the sale.)

Mirabella is also a member of ICMAD. “As a small brand, ICMAD has networking that has been valuable,” he says. “I have learned a lot from the connections I have made.” He wrote a one-page story in the November issue of The ICMAD Digest.

Recently, Mirabella hired New York City-based Siren Public Relations, and did a round of PR meetings with New York City-based consumer magazine editors as well as a blogger event.

In addition, Mirabella has announced that in January it will introduce the Signature Brush Collection: 14 different makeup brushes in a $19-to-$60 SRP range; and an aluminum, cylinder-shaped brush roll designed to hold and protect the entire set of brushes.

[Image: Courtesy of Mirabella Beauty Products]

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MALY OUT & ABOUT

Maly and Maly’s West played huge roles in the start of the Professional Beauty Association’s annual cash-and-carry Long Beach International Salon and Spa Expo in Southern California. Maly stopped by the 2011 show. “It looks nice, but since the major brands are not there it is no longer an event that the majority of professionals attend,” he states. “I hope that will happen again.”

During 2011, he and Mirabella attended Cosmoprof North America and Cosmoprof Worldwide Bologna for international appointments. “It was incredible,” he comments about Cosmoprof Worldwide Bologna in Italy. “In our first show, we secured 46 distributor appointments, and will definitely have at least five new distributors by year-end. We will attend again—bigger and better!”

And as for his BIW lunch presentation, he says it was “so fun,” adding, “I always say yes when asked.” Industry event organizers, note: You can reach him at jmaly@mirabellabeauty.com.
[Photo caption: John Maly, president/CEO, Mirabella Beauty Products. Portrait photo by Armando Sanchez]