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MARY KAY COSMETICS
MARY KAY COSMETICS. Mary Kay Cosmetics, Incorporated, a fully integrated manufacturer and distributor of more than 200 personal care and women's beauty products, is a privately held corporation headquartered in Dallas with five nationwide distribution centers and sales in nineteen countries worldwide. In 1992 Mary Kay recorded over $1 billion in sales and was the largest direct seller of skincare products in the United States. The firm employs up to 1,700 workers, has a sales force of 250,000 independent beauty consultants, and in 1984 claimed more women earning over $50,000 in annual commissions than any other United States company. Its Dallas manufacturing facility, built between 1968 and 1980 on over eleven acres, houses company operations, including processing, packaging, warehousing, offices, and research and development laboratories. The corporation's major symbol, the bumblebee, identifies Mary Kay with an insect that aerodynamically should not be able to fly, but does so anyway. Mary Kay Ash (Mary Kathlyn Wagner), a native of Hot Wells, Texas, took a job in direct sales with Stanley Home Products in 1938 to make enough money to enable herself and her first husband to move out of her mother's house. She was taking pre-med classes at the University of Houston when her husband deserted her. Her inspiration came after three weeks when she attended the company's annual Dallas convention, witnessed the year's Queen of Sales win an alligator handbag, and determined to succeed at sales. Awarded only a trophy as the next year's winner, she later carried an alligator briefcase with her initials in gold. When she enlisted her three children to pack products and began full time work for Stanley, she also began her son Richard R. Rogers's lifetime career as her business partner.
Although Mary Kay displayed a talent for recruiting and marketing, she was denied the title of unit manager she felt she deserved. In 1952 she left Stanley to work for World Gift Company, a Dallas home accessories firm, where she was instrumental in extending distribution to forty-three states in eleven years and was eventually made a member of the board of directors. When she still saw her ideas ignored after achieving board status, Mary Kay resigned in 1963. By listing successes and failures in her direct sales experience, Mary Kay wrote the outline for a new company that lacked only a product. She subsequently purchased the formulas of a group of skin care products derived from tanning solutions presented to her by a Texas hide tanner's daughter. In 1963, with just $5,000 and her son Richard's help, she started a company known as Beauty by Mary Kay in a tiny storefront in downtown Dallas. Mary Kay's most important innovation is to utilize independent businesswomen by recruiting a sales force independent of her company. The firm sells its products at wholesale prices to a world-wide network of as many as 250,000 independent Mary Kay consultants, each of whom receives a 40 to 50 percent markup on products sold at retail prices through personal customer networks. Although not employees of Mary Kay in a traditional benefit sense, the sales force is educated in selling techniques by the company, which stresses that each "consider herself Mary Kay" to project the founder's charisma and selling ability. Consultants are encouraged to "fake it till you make it," with the understanding that "You are in business for yourself, but not by yourself." Top saleswomen receive pink Cadillacs, vacations, and diamond rings at annual seminars, which encourage them to set and reach personal goals, much like Mary Kay's alligator bag. The use of Mary Kay pink extends to its fleet of eighteen-wheeler trucks used to transport cosmetics to Mary Kay distribution centers.
Mary Kay Cosmetics expanded geographically in 1970, after a 1968 public offering in the over-the-counter stock market enabled the firm to open its first distribution center outside of Dallas. Mary Kay acquired its first subsidiary in the international market in Australia in 1971, followed by outlets in Canada in 1978, Argentina in 1980, Germany in 1986, Mexico in 1989, and Taiwan in 1992. By the 1990s national distribution centers were located in California, Georgia, New Jersey, and Illinois. By 1976 the company was large enough to be traded on the New York Stock Exchange, and between 1973 to 1983 its stock price rose by 670 percent. In 1985, through a leveraged buyout, the company was returned to private ownership by Richard Rogers and Mary Kay Ash. In 1991 Mary Kay announced a $3 million settlement with the Internal Revenue Service to end a $29 million claim by IRS officials resulting from the company's 1985 leveraged buyout by Mary Kay's family members. In response to the public criticism by animal rights groups in 1989, Mary Kay Cosmetics issued a moratorium on its use of laboratory animals for consumer product development and safety testing and formed a panel of experts to advise its researchers on alternatives. In the 1990s the company shared its findings with groups such as the Johns Hopkins Center for Alternatives to Animal Testing and supported academic research on alternatives through direct grants to scientists at CAAT and the University of Texas.
Mary Kay herself has been active in organizations dealing with health care issues both locally and nationally. Later married to vitamin industry executive and retired wholesale manufacturer's representative Mel Ash, she became a leader in the fight to find a cure for cancer after her husband's death from the disease in 1980. She twice served as the honorary chairman of the Texas Breast Screening Project; lobbied for Texas legislation to require insurance companies to cover mammograms; participated in projects of the American Cancer Society, the Komen Foundation for the Advancement of Breast Cancer Research, the St. Paul Research Center, and the Dallas YWCA; and is a frequent speaker to women's organizations and others. The firm contributes to the North Texas Food Bank and provides a mobile mammogram unit for members of its sales staff.
BIBLIOGRAPHY:Mary Kay Ash, Mary Kay (New York: Barnes and Noble, 1981). Kim Wright Wiley, "Cold Cream and Hard Cash," Savvy, June 1985. Vertical Files, Dolph Briscoe Center for American History, University of Texas at Austin (Mary Kay Ash).
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The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.Handbook of Texas Online, Keli Flynn, "MARY KAY COSMETICS," accessed May 24, 2019, http://www.tshaonline.org/handbook/online/articles/dhm01.
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