Entrepreneur's Journal March 3, 2009, 10:00AM EST

Iman's Mass-Market Distribution Model

The ex-supermodel on why she launched her cosmetics line and pushed for placement next to major brands, not "ethnic" products

Iman hired makeup artists to do in-store product demos in chain stores.

Iman signed a licensing deal with Procter & Gamble in 2004.

Story Tools

Watch the Video…

The Entrepreneur: Somali-born former supermodel Iman, 53

Background: Fashion photographer Peter Beard discovered Iman in 1975, when she was a 19-year-old student at the University of Nairobi. A year later, the seed for Iman Cosmetics was planted during her first photo shoot for Vogue. (It came when the makeup artist asked Iman if she had her own foundation because he didn't have a formula for black skin.) Over the next two decades, even as she was gracing countless magazine covers and serving as the muse for fashion designers Yves St. Laurent and Versace, Iman always mixed and tested her own foundation. Women frequently came up to her and asked which brand of foundation she was wearing, thinking that the famous model had access to some fancy new formula.

The Company: Despite frequent discussion about multiculturalism and "the browning of America," Iman, who had retired from modeling in 1992, realized that there was a dearth of quality beauty products for women of color. After finding a business partner and researching Census data that showed rises in the population and median incomes of African-American and Latinos, Iman decided the time was right to create a line of products targeted at this market. In 1994, Iman Cosmetics and its accompanying skincare line were unveiled at 400 J.C. Penney (JCP) stores across the country, as well as at department stores in England, France, and Canada. In 2007, Iman leveraged her success to launch a line of handbags and accessories, Iman Global Chic, on the HSN.

Revenues: $25 million (in the U.S.)

Her Story: When I started my cosmetics company, I wanted to be the black Estée Lauder (EL). I wanted to be big. I knew that there was a potentially huge niche market in cosmetics and skincare for women of color.

Initially I launched my brand with J.C. Penney. At the time, they were building their own cosmetics department. The decision made sense; they had the customer base and they were willing to support the brand.

And I was right. I had 10 full-time employees and we were very successful immediately. By 1996 we had sales of over $5 million. Celebrities and beauty editors got it right away, but I knew that I had made it when women stopped me on the street and showed me my products in their purses. There was a real appetite for this kind of cosmetics. Women were buying the product in bulk, afraid we might go out of business because a lot of companies in the past had lines for women of color but after a time would discontinue products or just stop producing entire lines altogether.

However, in 2003 Penney decided to move in another direction and opted to phase out cosmetics. It forced me to quickly consider my next move. Yes, we were a huge success at the beginning, but I learned it is staying in business that is the difficult part. You have to keep your eye on the ball. With the end of my relationship with Penney, I had to determine what kind of sales distribution I needed going forward.

KNOWING THE CUSTOMER

I could have continued selling in another department store, but mass chains are more profitable and have a bigger reach. In 2004, we began selling Iman Cosmetics at Wal-Mart (WMT), Target (TGT), Walgreens (WAG), Duane Reade, and the Chicago-based beauty retailer Ulta.

I had learned a great deal from our experience at J.C. Penney. But I think one of the things that really contributed to my success was that I knew who my customer was because I was my customer.