Mary Kay


Mary Kay
Mary Kay, Inc.
Type Privately held company
Industry Personal care products
Founded Dallas, Texas (1963)
Headquarters Addison, Texas
Key people Mary Kay Ash, Founder
Richard R. Rogers, Executive Chairman
David Holl, CEO
Products Skin care, cosmetics, sun protection, perfume
Revenue $2.4 Billion in 2007[1]
Employees Independent sales force of 1.8 million worldwide (2008)[1]
Website Mary Kay Inc.

Mary Kay, Inc. is a privately held company that sells skin care and cosmetics products. Mary Kay World Headquarters is located in Addison, Texas, United States, a Dallas suburb. Mary Kay Ash founded Mary Kay Inc. on Friday, September 13, 1963. Richard Rogers, Mary Kay's son, is the executive chairman, and David Holl is president and was named CEO in 2006.[2][3][4]


In the early 1990s the company introduced a number of makeup products aimed at its burgeoning market amongst women of color.[vague]

Contents

Animal rights issues (1980s-1996)

In 1989 the company announced a moratorium on animal testing of its products, after pressure from animal rights groups. They were among the first in their industry to do so and to sign the PETA pledge.

Sales

Year Mary Kay Officially Entered Local Market
Year Market Year Market Year Market Year Market
1963 USA[5] 1993 Bermuda 1997 Ukraine ? Dominican Republic
1971 Australia[6] 1993 Brunei 1999 El Salvador ? Estonia
1978 Canada 1993 Chile 1999 Hong Kong ? Latvia
1980 Argentina 1993 Guatemala 2000 Kazakhstan ? Netherlands
1984 Pakistan 1993 Moldova 2000 Philippines ? Switzerland
1986 Germany 1993 Norway 2000 Slovakia
1988 Malaysia 1993 Russia 2001 Korea
1988 Mexico 1993 Singapore 2002 Uzbekistan
1988 Thailand 1994 Brazil 2005 Moldova
1990 United Kingdom 1994 Japan 2006 Poland
1991 New Zealand[6] 1995 People's Republic of China 2007 India
1991 Guatemala 1995 Portugal 2008 Fiji
1991 Taiwan 1996 Finland 2009 Lithuania
1992 Spain 1997 Czech Republic 2010 Armenia
1992 Sweden 1997 2010

Several other countries, such as Nigeria, are served by a grey market.

Manufacturing Plants

The primary manufacturing plant is in Addison, Texas.

A second plant was opened in Hangzhou, PRC to manufacture and package products for that market. A third plant was opened in 1997, in La Chaux-de-Fonds, Switzerland, for the European market. The Swiss plant closed in 2003.

Revenue

In 2005, wholesale worldwide sales exceeded US$2.2 billion.[7] In 2010, worldwide wholesale figures was US$2.5 billion.[2] Neither of those figures take into account product returns.

The table below shows the company's reported sales figures in more detail.

Mary Kay Sales Figures
Year Wholesale Volume Consultants Directors National Directors Wholesale volume / Consultants
1963 $198,154[8] 318[8] 0 0 $623.13
1973 unknown 21,069[9] 450(?) 2(?) unknown
1983 $300,000,000[9] 195,000[9] unknown unknown $1,538.46
1989 $400,000,000 200,000 unknown unknown $2,000.00
1991 $511,000,000[10] 220,000[10] unknown unknown $2,322.73
1992 $500,000,000[11] 250,000[11] unknown unknown $2,000.00
1993 $735,000,000[9] 325,000[9] unknown unknown $2,261.00
1994 $850,000,000[12] unknown unknown unknown unknown
1995 $950,000,000[12] unknown unknown unknown unknown
1995 Russia $25,000,000[13] unknown unknown unknown unknown
1996 $1,000,000,000[12] unknown unknown unknown unknown
1997 People's Republic of China $12,000,000[14] 15,000 unknown unknown $800.00
1998 People's Republic of China $7,200,000[14] unknown unknown unknown unknown
2001 $1,400,000,000 800,000 unknown unknown $1,750.00
2001 USA Unknown 500,000[15] unknown unknown unknown
2001 Mexico $20,000,000[16] unknown unknown unknown unknown
2002 $1,600,000,000 850,000 19,000[17] more than 300[17] $1,882.35
2002 USA unknown unknown 13,000[17] unknown unknown
2002 People's Republic of China $120,000,000[14] 120,000[14] unknown unknown $100.00
2003 $1,800,000,000 1,100,000 18,500[18] More than 100[18] $1,636.36
2004 $1,960,000,000[19] 1,300,000[20] 27,000[7] 410[20] $1,507.69
2004 USA unknown unknown unknown 210[20] unknown
2004 Canada $125,000,000[21] 29,357[22] 661[22] 16[22] $4,257.93
2004 United Kingdom $7,700,000[23] 3,500[18] More than 70[18] 0[18] $2,200.00
2005 $2,200,000,000[7] 1,600,000[7] 31,000[7] 500[7] $1,375.00
2005 People's Republic of China $300,000,000[24] 400,000[24] unknown unknown $750.00
2005 USA $1,300,000,000[24] 715,000[24] unknown unknown $1,818.18
2005 Canada unknown 32,820[25] 673[25] 17[25] unknown
2005 Argentina unknown 20,000[26] 500[26] 8[26] unknown
2005 Mexico unknown 175,000[27] unknown unknown unknown
2005 United Kingdom unknown 5,000[28] 140[28] 2[28] unknown
2006 Worldwide $2,250,000,000[29] 1,700,000 +[29] unknown about 500[30] $1,323.53
2006 Canada CDN$62,000,000[31] 34,272[25] 724[25] 18[25] CDN$1,809
2006 USA unknown unknown 14,000+[30] unknown unknown
2006 UK unknown 5000[28] 140[28] 2[28] unknown
2007 Canada unknown 31891[32] 659[25] 25[25] unknown
2007 USA unknown 700,000 14,000[33] 215[34] unknown
2007 Worldwide $2,400,000,000[34][34] 1,700,000[34] unknown unknown $1,411.76
2008 Canada unknown 30,679[35] 608[35] 24[35] unknown
2008 USA unknown 600,000[36] 13,000[36] unknown unknown
2008 Worldwide $2,600,000,000[37] 1,800,000[37] 34,000[37] 500[37] $1,444.44
2009 Worldwide $2,500,000,000[38] 2,000,000[38] 37,000[38] 600[38] $1,250.00
2009 China $600,000,000[39] 200,000[39] unknown unknown $3,000
2010 Worldwide US$2,500,000,000[2] 2,000,000[2] unknown 600[2] US$1,250
2010 Australia Aus$25,000,000[40] 10,000 unknown unknown Aus$2,500
2010 Canada unknown 29573[41] unknown 24[41] revenue / consultants
Year Wholesale Volume Consultants Directors National Directors revenue / consultants

Notes:

  • Unless otherwise stated, dollar amounts are in United States Currency;
  • Dollar amounts have not been adjusted for inflation;
  • Official Mary Kay, Inc. policy is to round up their gross Wholesale volume.;
  • Official Mary Kay, Inc. policy is to round down the number of consultants;

Cars

In 1968, Mary Kay Ash purchased the first Pink Cadillac, where it was repainted on site, by the dealership owner, to match the Mountain Laurel Blush in the compact.[42] It was such a good rolling advertisement that Mary Kay Ash decided to reward her top five producers, by providing them with a Pink Cadillac paid for by the company in 1969. Pink was an obvious color choice, matching the company's eye and lip color palettes. Since 1980, the shade used by the Mary Kay fleet has been exclusive to Mary Kay. Every two years, a Director or National can requalify for a new Cadillac. When the two year lease has expired, the cars are repainted, prior to being auctioned off. The shade of pink has changed over the years. In 1998, the color was changed to "pearlized pink". In honor of its 35th anniversary, the Mary Kay edition, white GMC Jimmy sport utility vehicle was offered in the United States. In 2007, top Independent Sales Directors can still earn the coveted pink Cadillac.

In the United States, the 2006 vehicle choice consisted of a Pontiac Vibe, Pontiac Grand Prix or a Cadillac. A Mary Kay director that qualifies for a car may choose from a Cadillac DTS, a Cadillac CTS, or a Cadillac SRX. In 2007 the offered cars were Saturn Vue, Pontiac G6, Pontiac Vibe, Cadillac CTS, and Saturn Aura.[43]

In 2009 GM announced it would be discontinuing the Saturn and Pontiac lines, forcing Mary Kay to choose new choices for Directors and Consultants to earn. Independent Beauty Consultants can earn the use of a Smokey Platinum Chevy Malibu or cash compensation of $375 a month. Independent Sales Directors can choose a Silver Toyota Camry, Chevy Equinox, or $500 a month. Top Independent Sales Directors can choose between the Pink Cadillac DTS, Cadillac CTS, or cash option of $900 a month.[44]

In 2005 the GM (USA) fleet size was 9,870.[45]

In the United Kingdom, Germany, The Netherlands, Spain and Ukraine, the car is a pink Mercedes-Benz. In Argentina, one receives a pink Ford, while in Taiwan, it is a pink Toyota.[46] In Australia, one gets to choose between a Ford Falcon, or Volkswagen Beetle.[47] In China, the vehicle is a pink Volkswagen Santana. In the Nordic countries you receive a pink Volvo V50.[48]

The specific qualifications for earning the car depend upon the country, and vehicle that is desired. If those qualifications are not met, then the Car Driver has to pay for a portion of the lease of the car for that month. Meeting the qualifications entitles the Car Driver to pay no monthly lease and 85% of the car insurance, or a pre-determined cash compensation award.[49]

Since the program's inception, more than 100,000 Independent sales force members have qualified for the use of a Career Car or elected the cash compensation option.[4] It is not known how many Directors select the cash option in lieu of the car, but GM estimates that it has built 100,000 pink Cadillacs for Mary Kay.[42]

At the annual Mary Kay convention in Dallas in July 2011, executives announced that new, 2011 model-year Ford Mustang painted in black will become available as an incentive to keep the company’s salespeople productive.[50]

Earnings

As a private company, Mary Kay Inc. does not make all of its financial information available to the public[4] and there is little reliable information about earnings by consultants.

There are two ways for consultants earn money in Mary Kay:

  • Retail sales;
  • Recruiting;

Recruiting commission earnings

"Recruiting commission earnings" reflects the commission and bonuses that one earns from the wholesale purchases of their downline, which, for an NSD in the United States would be 2% for a third level unit, 4% for second level unit, 9% for first level unit, and 13% for personal unit. This data does not include income from retail sales nor does it include income from the Mary Kay tools business.

A press release[51] claimed the following for Canada in 1999:

Of the 16,000+ consultants:

  • The majority earned less than $19,000 Canadian;
  • 173 Sales Directors earned more than $19,000 Canadian;
  • 3 national directors earned more than $100,000 Canadian;

In an April 2005 press release, Mary Kay (Canada)[52] claimed the following for Canada in 2004:

Of the 29,357 independent Mary Kay Consultants:

  • 2,267 earned more than $15,500 Canadian;
  • 331 Sales Directors earned more than $15,500 Canadian;
  • 8 National Directors earned more than $100,000 Canadian;

In an April 2006 press release, Mary Kay (Canada)[52] claimed the following for Canada in 2005:

Out of 32,821 independent Mary Kay Beauty Consultants:

  • 2,356 earned more than $17,000 Canadian;
  • 336 Sales Directors earned more than $17,000 Canadian;
  • 15 National Directors earned more than $100,000 Canadian;

In a February 2007 press release, Mary Kay (Canada)[52] claimed the following for Canada in 2006:

Out of 34,272 independent Mary Kay Beauty Consultants:

  • 2,422 earned more than $16,500 Canadian;
  • 362 Directors earned more $16,500 Canadian;
  • 16 National Directors earned more than $100,000 Canadian;

In February 2009, Mary Kay (Canada) claimed the following for 2008:[35]

  • 2011 consultants earned more than Canadian $100 in commission;
  • 304 Sales Directors earned more than Canadian $16,567.
  • 16 National Directors earned more than Canadian $100,000.

In February 2010 Mary Kay (Canada) claimed the following for 2010:[53]

  • 29,675 people were consultants during the year;
  • 1,878 consultants earned more than Canadian $100 in commission;
  • 276 of the 553 Sales Directors earned more than Canadian $17,471 in commission;
  • 15 of the 23 National Directors earned more than Canadian $100,000 in commission;

For Mary Kay (USA) Nationals, the 2006 median gross income (prior to business expenses) is $75,443.[54]

Consultant turnover rate

A 68.6% per annum turnover figure has been calculated based upon information supplied by Mary Kay (USA) to the FTC.[55]

A 85% per annum turnover figure has been calculated, based upon the data supplied by Mary Kay (Canada).[52] That document excludes individuals who earn a commission and are in the company for less than one year. It also excludes individuals who are in the company for more than one year, but do not earn a commission check.

Retirement income

Individuals who qualified as National Director, prior to the age of sixty, are given the status of National Director Emeritus at age sixty five. This status entitles them to a retirement income that is equal to 60% of the average of the best three of the last five years prior to retirement[citation needed]. That monthly is paid to the retiree or their surviving family for 15 years.[citation needed] There is no retirement plan for other consultants.

Controversial Aspects

A number of criticisms have been leveled at the company by current and former Mary Kay Consultants.

Woolf v Mary Kay Cosmetics

Woolf v Mary Kay Cosmetics
Court Northern District of Texas
Full case name Claudine Woolf v. Mary Kay, Inc.
Date decided 20 October 2004
Citation(s) Northern District of Texas 301 cv 688-57
Transcript(s) http://www.5thcoa.courts.state.tx.us/cgi-bin/as_web.exe?c05_05.ask+D+800147
Judge(s) sitting Justices Morris, Moseley, and FitzGerald
Case history
Prior action(s)

191st Judicial District Court

Dallas County, Texas Trial Court Cause No. 00-05612-J
Subsequent action(s) Certiorari Denied 31 May 2005.[56]
Case opinions
Workplace Rights do not apply to independent contractors.

Woolf v. Mary Kay Cosmetics, was originally decided in favor of the plaintiff, Claudine Woolf. In doing so it marked the first time[57] that workplace rights could be applied to independent contractors who worked from their home. This decision was stayed and then reversed after an appeal. The Supreme Court USA ruled Certiorari Denied 31 May 2005.[56]

In this case, Woolf was terminated from her position as director because her unit failed to make production for three consecutive months. Woolf contended that her firing was illegal, because of her medical condition — she was suffering from cancer.

Liquidator Court Cases

Mary Kay Inc v Touch of Pink Cosmetics
Court Northern District of Texas
Full case name Mary Kay Inc v Amy L Weber, Scott J Weber and Touch of Pink Cosmetics
Citation(s) Northern District of Texas 3:2008cv00776
Judge(s) sitting Judge A. Joe Fish

In May 2008, Mary Kay Inc sued Touch of the Pink Cosmetics, a website that sells product from former Mary Kay consultants at heavily reduced prices. The company claims that Touch of Pink interferes with their business by offering to purchase inventory from discontinued consultants, and that their use of the Mary Kay trademark in reference to Mary Kay products they sell is deceiving.[58][59]

On 20 July 2009, Mary Kay Inc sued Pink Face Cosmetics for violation of 15:1051 Trademark Infringement.[60] The specific issue appears to be the use of the Mary Kay name, in selling Mary Kay products on eBay, and other Internet venues, for less than the wholesale cost of the products.

Mary Kay Ash Charitable Foundation

Established in 1996, the mission of the Mary Kay Ash Charitable Foundation is two-fold:
• Committed to eliminating cancers affecting women by supporting top medical scientists who are searching for a cure for breast, uterine, cervical and ovarian cancers.
• Committed to ending the epidemic of violence against women by providing grants to women’s shelters and supporting community outreach programs.

In May, 2006 The Foundation awarded 13 cancer research grants of $100,000 each to esteemed doctors and medical scientists in the United States. In October 2006, the Foundation awarded $20,000 grants to 150 women’s shelters across the United States for a total of $3 million.

Additional information about the MKACF and annual fundraising/donations can be found on their website.

References

  1. ^ a b 2008 Press Kit – Mary Kay: The Independent Sales Force[dead link]
  2. ^ a b c d e 2011 Press Kit The Company
  3. ^ Mary Kay Company Information page[dead link]]
  4. ^ a b c Mary Kay At-A-Glance — June 2006
  5. ^ Corporate Press Kit 2011
  6. ^ a b About Mary Kay
  7. ^ a b c d e f MK Corporate Press Kit 2006[dead link]
  8. ^ a b "Mary Kay Ash". 20th Century American Leaders Database. Harvard Business School. http://www.hbs.edu/leadership/database/leaders/mary_kay_ash.html. Retrieved 2010-10-20. 
  9. ^ a b c d e Mary Kay Corporate Milestones[dead link]
  10. ^ a b Camerius, James W.; Clinton, James W. (1993). "Avon Products, Inc.: Developing a Global Perspective" (PDF). Washington, DC: Direct Selling Education Foundation. http://www.dsef.org/press/pdfs/Avon_Products.pdf. Retrieved 2010-10-20. [dead link]
  11. ^ a b Flynn, Keli (2010-05-30). "Mary Kay Cosmetics". Handbook of Texas Online. Denton, Texas: Texas State Historical Association. http://www.tshaonline.org/handbook/online/articles/MM/dhm1.html. Retrieved 2010-10-20. [dead link]
  12. ^ a b c "Company Retrospective". Mary Kay (UK). http://www.marykay.co.uk/Display.asp?PageID=1696&Directory=Company. Retrieved 2010-10-20. 
  13. ^ Stanley, Alessandra (1996-08-14). "Avon and Mary Kay Create Opportunities for Women". Moscow: New York Times. p. D1. http://select.nytimes.com/gst/abstract.html?res=F40D11F73C550C778DDDA10894DE494D81&n=Top%2fNews%2fBusiness%2fCompanies%2fAvon%20Products%20Inc%2e. Retrieved 2010-10-20. 
  14. ^ a b c d "China consumer goods: Still off the doorstep". Economist Intelligence Unit (Economist Group). 2005-06-21. http://www.eiu.com/index.asp?layout=IWArticleVW3&article_id=1289170114&refm=iwIndustry&industry_id=40000004. Retrieved 2010-10-20. 
  15. ^ CIO[dead link]
  16. ^ "Monthly Calendar, 2002". US Mexico Chamber of Commerce. http://www.usmcoc.org/usa/calen2002.html. Retrieved 2010-10-20. 
  17. ^ a b c Mary Kay Inc. (2001-11-22). "Mary Kay Inc. 2003 Fact Sheet" (Press release). http://business.baylor.edu/Richard_Easley/CB%20Articles/marykaycosmetics.htm. Retrieved 2010-10-20. 
  18. ^ a b c d e "Just the FAQs". Mary Kay (UK). http://www.marykay.co.uk/Display.asp?PageID=1693&Directory=Company. Retrieved 2010-10-20. 
  19. ^ Family Business[dead link]
  20. ^ a b c Mary Kay Corporate Press Kit 2005
  21. ^ Kaye, Marcia (December/January 2005). "Parent Time: Mary Kay Cosmetics". Today's Parent. http://www.todaysparent.com/lifeasparent/workfinance/article.jsp?content=20041104_123921_4584&page=5. Retrieved 2010-10-20. 
  22. ^ a b c Mary Kay (Canada) Reported earnings 2004
  23. ^ "Mary Kay Cosmetics (U.K.) Ltd.". Hoovers, Inc.. http://www.hoovers.com/mary-kay-cosmetics-ltd./--ID__135117--/free-co-factsheet.xhtml?cm_ven=PAID&cm_cat=INK&cm_pla=CO1&cm_ite=mary-kay-cosmetics-ltd. Retrieved 2010-10-20. 
  24. ^ a b c d Glick, Julia (2006-08-04). "More Chinese Women Donning Mary Kay Uniforms". Associated Press. The San Diego Union-Tribune. http://www.signonsandiego.com/uniontrib/20060804/news_lz1n4nowread.html. Retrieved 2010-10-20. 
  25. ^ a b c d e f g h Mary Kay (Canada) Reported earnings
  26. ^ a b c Mary Kay (Argentina)
  27. ^ Mary Kay (Mexico)
  28. ^ a b c d e f "The Mary Kay Opportunity". Mary Kay (UK). http://www.marykay.co.uk/Display.asp?PageID=1698&Directory=Company. Retrieved 2010-10-20. 
  29. ^ a b "Company Information". Mary Kay. Archived from the original on 2007-04-28. http://web.archive.org/web/20070428030230/http://www.marykay.com/company/company_companyinformation.aspx?tab=home. Retrieved 2010-10-20. [dead link]
  30. ^ a b "2007 Press Kit" (Press release). Mary Kay. 2007. Archived from the original on 2008-06-27. http://web.archive.org/web/20080627135141/http://www.marykay.com/content/company/images/2007CorporatePressKit.pdf. Retrieved 2010-10-20. 
  31. ^ Mary Kay Around The World
  32. ^ Mary Kay (Canada) Reported earnings
  33. ^ "March 2008 Directors Commission" (PDF). Applause. Mary Kay. July 2008. p. 17. http://www.pinktruth.com/images/MKCorp/march08dircomm.pdf. Retrieved 2010-10-20. 
  34. ^ a b c d Oberbeck, Steven (2008-05-15). "Utah woman a star in pink". The Salt Lake Tribune (Sequence, Inc.). http://www.sequence-inc.com/index.php?option=com_content&view=article&id=203:utah-woman-a-star-in-pink&catid=16:current-press&Itemid=54. Retrieved 2010-10-20. 
  35. ^ a b c d 2008 Earnings Representation
  36. ^ a b Johnson, Grant (2009-01-01). "Beauty Secrets | Mary Kay's Rhonda Shasteen works on brand makeover". Directmag.com. http://directmag.com/casehistories/0109-shasteen-works-makeover/. Retrieved 2010-10-20. 
  37. ^ a b c d [1][dead link]
  38. ^ a b c d http://www.marykay.com/content/company/images/cpk_thecompany.pdf
  39. ^ a b Barboza, David (26 December 2009). "Direct Selling Flourishes in China". The New York Times. http://www.nytimes.com/2009/12/26/business/global/26marykay.html?_r=1. Retrieved 12 May 2010. 
  40. ^ "Mary Kay Survives Retail Slump". The Australian. 2 march 2011. http://www.theaustralian.com.au/business/industry-sectors/mary-kay-survives-retail-slump/story-e6frg9h6-1226014341468. Retrieved 3 March 2011. 
  41. ^ a b http://www.marykay.ca/ContentPage.aspx?FileName=/home/earnings-representation.html
  42. ^ a b Ledger Article
  43. ^ Brochure: Mary Kay Career Car Plan Guidelines — July 2007
  44. ^ Pink Truth
  45. ^ Mary Kay GM Fleet[dead link]
  46. ^ Mary Kay (United Kingdom)
  47. ^ Mary Kay (Australia)
  48. ^ Mary Kay Nordic
  49. ^ Brochure: Mary Kay Career Car Plan Guidelines — February 2005.
  50. ^ Ford Mustang revs up as Mary Kay’s newest ride
  51. ^ http://web.archive.org/web/20000916131228/www.marykay.ca/home/EarningStatement.htm
  52. ^ a b c d Mary Kay Canadian Earnings.
  53. ^ Earnings Representation
  54. ^ US National 1206 Commission[dead link]
  55. ^ Mary Kay Letter to the FTC regarding proposed changes in the rules governing MLMs.
  56. ^ a b Order List:544 US
  57. ^ Fired Mary Kay Worker Wins Lawsuit
  58. ^ http://www.pinktruth.com/images/MKCorp/touchofpink.pdf
  59. ^ Evan Clark (2008-03-09). "Mary Kay Sues Former Sales Rep.". Women's Wear Daily. http://wwd.net/issue/article/124767/. [dead link]
  60. ^ Northern District of Texas Case 3:09-cv-01363-L



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