LVMH, the infamously acquisitive luxury-goods conglomerate, opens its American headquarters this week with a series of exclusive events at the new jagged-glass tower it built near high-end retailing’s ground zero: the intersection of Madison and 57th. Coming so soon after LVMH’s new stake in Fendi and Tag Heuer – and its spectacular failure to acquire Gucci – the building’s opening should be chairman Bernard Arnault’s true coming-out party as the corporate titan of late-nineties luxury.
The headquarters is an eye-catching symbol of Arnault’s American ambitions and of the triumph of shopping-as-culture. Christian Dior will have a boutique on the ground floor; the penthouse duplex will be the stage for lavish, boldfaced-name parties; and tucked away on the third floor of the tower will be the uptown branch of the fashionable SoHo spa Bliss.
The spa’s inclusion in the LVMH mother ship is not a bonus to employees or a perk for Arnault’s string of socialite envoys. A homegrown New York success story, Bliss has in three years gone from a modest spa to a multi-million-dollar beauty business. In March, LVMH acquired 70 percent of the company in a complicated transaction tied to projected revenues – widely reported as a $30 million deal. But the comparatively small purchase appears to be a break with LVMH’s previous strategy of pursuing European prestige brands.
Patrick Choël, the president of LVMH’s cosmetics division, is adamant that Bliss represents an important new move for the company, even though Bliss, until now, was only a tiny spa with one location. “I insisted we have it in the building,” he says. “We were clearly not on the map in the U.S. Strategically, Bliss was the first move toward acquiring some small but promising U.S. brands.” Choël calls these brands – which include the sassy nail-polish-maker Hard Candy and a San Francisco skin-care line called Benefit – a departure for LVMH because they are young, “fun,” and clearly American.
Given LVMH’s reputation as a corporate raider, not an incubator of scrappy entrepreneurs, you have to wonder why Bliss would put itself under Arnault’s wing. But the flap over Gucci has obscured Arnault’s M.O.: LVMH finds inspired people, provides them with investment muscle, and lets them loose on the world.
The least interesting thing about Bliss is that it’s a spa. Spas used to be associated with middle-European ladies of an indeterminate age. Anyone remember Rula Lenska? Then they became New Age massage havens. But Bliss, with its six-month waiting list, celebrity clientele, and downtown cachet, operates in Arnault’s familiar territory.
Kilgore describes Boué, who is now both her husband and the company’s CEO, as “a real hard-ass.” High praise when you understand that he negotiated the $30 million LVMH deal.
“Women have been getting facials for hundreds of years – just ask anyone in Hungary,” says Christine Shea, the beauty director at Harper’s Bazaar, brimful with admiration. “Bliss gave it a positive, pop-culture spin, making it fun, tongue-in-cheek, and giving it the sex appeal of celebrity. There is nothing more American than what Bliss is doing right now.”
The Bliss story is all about Marcia Kilgore, a taut 31-year-old with a blonde bob and bangs. She has the intensity and star quality of a Susan Powter. Or let’s say, a hipper Susan Powter.
Kilgore’s story starts in the Canadian midwest with a personal problem (bad skin); continues on the floor of her New York apartment where she gives facials and builds a following; and ends with a business based on her down-to-earth personality and an epidemic of good word-of-mouth. “You went there for her sense of humor,” says one patron of her first business, Let’s Face It, a jewel-box spa for facials where 16-year-old wannabe models with stubborn pimples were sent by their agencies.
Her “in” with the style tribe led to good connections with the women’s magazines, and Kilgore worked the beauty editors like a P.R. pro. “You could always count on her for a good quote,” confesses Shea. “She got a lot of coverage in the fashion magazines.”
Then, in 1996, Kilgore transformed Let’s Face It into Bliss. “You felt cool when you went there. It was just such a groovy place,” remarks a regular, referring as much to the décor as the crowd. In SoHo, it has a sleek look offset by clever visual jokes: hairy brown lamb’s-wool ottomans, a glass wall holding a shower of feathers in suspended animation; and the new quarters on 57th adds elegant, tactile limestone tiles to the mix.
The spa also has a reputation for sending clients home with a basket filled with products whose high prices often shock the uninitiated. “She has a really great eye,” Shea admits, “and stocked the spa with some amazing products, things that women really want.” The product line seemed to naturally segue into a catalogue, which has now spawned an Internet business. Altogether the company brought in $11 million in 1998 and is planning to close out 1999 at $20 million in revenue.
As successful as Kilgore was in creating a soul for Bliss, her grander ambitions have been abetted by Thierry Boué, a Mr. Inside to her Ms. Outside. Kilgore describes Boué, who is now both her husband and the company’s CEO, as “a real hard-ass.” High praise when you understand that he negotiated the $30 million LVMH deal. But for Boué, the son of a Parisian nuclear physicist, “the business is Marcia’s personality.”
Boué had been a friend of Marcia’s sister. But the decision to become business partners came only when he finally asked Kilgore to stop calling him for advice on everything from where to find bottles to how one reads a contract from the Home Shopping Network. Now he acts as the counterweight to her obsessive nature (obsessive to the point of having liposuction to remove a tiny build-up of fat on her thighs, already toned from years of work as a personal trainer).
“When we started the catalogue,” Boué recollects, “Marcia was still giving facials six days a week. It took some working on her to make her understand her productivity would be much greater if she did it only three days a week. Now we are down to one.”
Boué used to be a photographer’s agent, and it was his experiences with models and editors that helped him recognize the spa experience as a fashion experience, with Marcia filling the role of designer and taste arbiter. “Marcia has a very intelligent spa,” he says. “She comes up with a new collection of services and a new way of seducing your clientele into coming back.” If that isn’t fashion, nothing is.
And if the spa is something like an exclusive couture line, then the merchandise is her ready-to-wear and licensing business all rolled into one. The catalogue of beauty products – her two lines and other products she likes – now goes out six times a year to a list of 1 million, and the Internet business is a thriving extension of it. The catalogue is filled with the same flighty riffs (“the Waterwoo” and “the Girly Glosser”) and puns so corny they’re cute (“Blissmas”) that have propelled so much of the company’s growth. Marcia’s commitment to mass appeal even extends to marketing low-price bikini wax on QVC, where she appears every month or so. During one summer weekend, she moved over a million dollars’ worth of wax.
While pushing ahead on all fronts at once, the business problem now becomes how to grow without losing Marcia’s personal touch. Some of the style crowd are already complaining that the SoHo spa is no longer a relaxing place. “It’s like a factory in there,” says one disillusioned fashion insider.
Boué frets about Bliss’s transition from mom-and-pop operation to charts-and-presentations bureaucracy. “If it becomes too corporate, I think it will lose its identity and essence. This is where Marcia must become more of a creative force.”
Kilgore, who still trains the staff, agrees. “I am trying to let go of things and not take responsibility for everything,” she says one Saturday morning at the spa. An employee laughs in the background. “Shut up, Kate,” she says good-naturedly. “And by the way, the speakers are not working in the locker room.”
There is no doubt that Bliss could have kept expanding without LVMH’s capital, but Arnault’s backing will put them into high gear. What might have seemed like a Faustian bargain to Gucci may offer Bliss immortality – without the misery.
In addition to the beauty-products business, they plan to expand into London and possibly Chicago or “the West Coast.” They also claim to be at work on 50-100 service-station-style “nail bars” that could extend the Bliss brand beyond the time-consuming massage-and-facial business. If they pull it off, they’ll surely lure more customers to the catalogue and Website.
Arnault’s investment in Bliss is clearly no small matter. So when Kilgore mentions Bliss in the same breath as the Gap, it may be worth taking her seriously.