Health and beauty boss has a head for finding niche market
Lifes2good's flagship product has helped deliver huge growth for the business, which now has sales in more than 25 countries
THE health and beauty sector is a highly competitive one. It also happens to be one of those industries that continues to experience rapid growth and incessant change. One company that has successfully managed to carve out a niche for itself is Galway-based Lifes2good.
The company, set up in 1997 by CEO James Murphy, saw its turnover increase to €26m in 2012, a 100 per cent increase over the previous year. It's a massive jump in revenue and a phenomenal achievement, given market conditions.
So what does the company do, I ask James. "We manufacture and distribute a wide range of health and beauty brands, including hair nourishment systems, anti-ageing and footcare programmes," explains James.
The company's flagship – and best known – product, Viviscal, is a natural hair recovery programme targeted for use by both men and women who suffer from temporary hair loss.
"Traditionally, hair loss or hair thinning was seen as, predominantly, a male issue and it was almost taboo for women to discuss the problem," James explains. "However, statistics show that at least one in every three women will experience hair loss or hair thinning at some stage in their lives. For these women the issue is often very distressing."
Hair loss can be brought on by a whole host of factors including everyday stress, colouring and excessive drying. In addition, poor nutrition, pregnancy or menopause can affect the natural well-being of women's hair.
"Hair follicles are fed by our blood system," explains James. "And when we are under stress or have a poor diet, or during times of hormonal changes, the free flow of important nutrients to the hair may become restricted. Similarly, the anagen or growth phase of hair slows down naturally as women get older."
James explains the intricacies of the various nutrients that go to make up the company's various supplements, creams and shampoos and how they work together to restore damaged or thinning hair. He is keen, too, to emphasise that the benefits of the products have been proven in five separate clinical trials.
Trials are one thing. But results are what really count. The real endorsement for the company's products has come from their customers. Growing numbers of celebrities have given unsolicited testimonies to the benefits of Vivi-scal, among them such well-known names as Reese Witherspoon, Kate Hudson and others.
The product has helped deliver huge growth for the business, which now has sales in more than 25 countries across Europe, the US, the Middle East and Asia.
The company employs 70 staff, two-thirds of which are located in the company's headquarters in Galway, and the remainder in overseas offices in the UK, the US, Spain, Portugal, Brazil, Mexico, Canada and Australia.
"I am incredibly proud of our staff and how they are performing in such a competitive global environment," James tells me.
In the US alone, Viviscal is available in more than 30,000 retail and pharmacy outlets including retailing giants such as CVS, Rite Aid and Walgreens. These outlets have ranked the product as their number two bestseller in hair products, while online retailer Amazon has ranked it in third place out of almost 600,000 different beauty products. It's an impressive achievement and a long way from where James started out.
He qualified as a chartered accountant in 1986. His desire to gain international experience led him to move to Brussels, where he worked with an Italian investment group. There, he married his Swedish- born wife, and when their first child was born the couple decided it was time to move back to Ireland.
In 1997, he started Lifes2good with the idea of building a distribution company where he could utilise his international network of business contacts.
In the early days, he enlisted Christy O'Connor Jnr to endorse the company's magnetic therapy wrist and other bands, which were being sold through pharmacies. By 2001 he had bought a UK distribution company and expanded into the UK market. Here again, he enlisted leading celebrity endorsements from people like tennis ace Virginia Wade and former rugby player Keith Wood.
By 2002, the company had developed a database of more than 5,000 UK customers who were buying hair loss products. Researching these figures further, he found that 50 per cent of his database were women. They were also buying the products for their own use. James suddenly realised that he had found himself a niche in the market.
A full-page promotion in a national UK newspaper featuring Cheryl Baker, of Eurovision winning band Bucks Fizz, speaking about the issue of hair loss among women and endorsing the company's brand, yielded sales of more than €250,000 for the business. "Things took off from there," James explains.
Up until 2007, James had been sourcing his hair products through a Danish distribution company but, that year, he got caught up in a legal dispute. It was a difficult time for James and his company.
"Over two months, we effectively lost 75 per cent of our entire turnover," James explains. But he was not to be deterred. In a bold move, James bought the Viviscal business from its Finnish owners and, in 2008, relaunched Viviscal in Ireland, the UK, Europe and the US. He was now back in business. But this time it was with his own brand.
James's participation in the Leadership for Growth programme for CEOs – run at Stanford University, California and supported by Enterprise Ireland – helped give him the confidence to expand his business even further.
"Taking on the American market is different from taking on the UK market because of its sheer size and scale. There can literally be thousands of individual stores in a retail chain in the US," he explains.
"A retail group may require up to 20,000 units to stock its stores. At a unit price of $50, that's a significant investment for a company like ours. It would have been a big risk to Viviscal if the products didn't sell," James says. Thankfully, they did.
The company continued to drive sales through aggressive advertising and online campaigns, and through a programme of training in-store sales staff.
That same year, James opened an office in Chicago and secured further endorsements from names such as Pamela Sue Martin from the famous Dynasty TV series, and Finola Hughes, a star in the TV series General Hospital.
The year 2009 provided the breakthrough that James had been looking for. The company secured initial listings in a few hundred stores in the Duane Reade chain of pharmacies in Manhattan. The response was so positive that, the following year, they were on the shelves of 7,000 Rite Aid stores.
That year too, they got listed in 7,000 Walgreens stores and 7,000 stores in the CVS chain of pharmacies. They were now in the big time.
The story is still unfolding for James. He tells me that he is committed to continuous growth and has plans to add new products and new markets to the current mix. He also remains heavily committed to investing in research and development. In order to drive innovation he has partnered with a number of third- level institutions, including the Limerick Institute of Technology's Shannon ABC programme and Bradford University in the UK, as well as with leading dermatologists in the UK and the US.
I ask James about the name of the company. He says it reflects his own attitude to life. He believes we all have an obligation to live the best life we can.
"It's just too good to waste," he says passionately.
James certainly takes his own advice and lives life full out. Outside of work, he keeps in good shape by competing in triathlons and even finds time to sing with the accomplished Galway Tenors.
Not many of the thousands, who pick up a Lifes2good hair and beauty product in New York or California will immediately think that these products are developed and made by a Galway company. But they are. In an industry that is dominated by large multinational corporations, what James Murphy and his team have accomplished is truly remarkable.
Having spent the day with James, I believe that if "Lifes2good" for him now, he can only expect that things are going to get even better.