The popular natural cosmetics company reportedly is available.
RALEIGH, N.C. (AP) – There’s a buzz within the industry for earth-friendly lotions, soaps and cosmetics that iconoclastic Burt’s Bees is being shopped so its owner can devote herself to her beloved Maine woods.
The Durham-based private company’s majority owner, Roxanne Quimby, built the business from craft markets in Maine to a multimillion-dollar cosmetics company.
The merger and acquisition Web site TheDeal.com reported last month that Quimby planned to sell the company for as much as $150 million and that potential buyers submitted bids last month. Those details were confirmed to The News & Observer of Raleigh by a New York public-relations executive representing Burt’s Bees.
“We have no new news to report,” Jessica Barring of Behrman Communications told The Associated Press. “As I am sure you can appreciate, decisions of this nature do not necessarily run to a predetermined time frame.”
Quimby did not return calls to her home in Winter Harbor, Maine.
Her determination to conserve Maine’s forests may have a role in why efforts to sell the company – which Quimby has often talked about – are in the works now.
One of Quimby’s passions is raising money to buy land to create a 3.2 million-acre national park in the Maine wilderness. Reports say she plans to use some of her wealth from the company’s sale to buy more land for the park, which would rival Death Valley as the largest national park outside of Alaska.
Burt’s Bees has developed a customer base for its lip balm, bath oils, soaps and about 150 other personal care products made from beeswax, nut oils and other natural ingredients. The items are sold primarily through specialty shops and health stores across the United States, as well as in Canada, Europe and Japan.
The products offer a good-for-you appeal that makes consumers willing to buy a $10 bottle of shampoo as an “affordable luxury” though it may perform no better than a $3 bottle, said Carl Sibilski, an equity analyst specializing in consumer products companies for Morningstar Inc., an investment research firm in Chicago.
“Consumers get this feeling that they’re pampering themselves. Everybody’s working harder. They don’t have as much time, but they have more money, so they’ll buy these types of products,” Sibilski said.
Bath & Body Works Inc. rang up nearly $1.8 billion in sales last year targeting the same consumers. Burt’s Bees’ revenue topped $43.5 million last year, a 30 percent increase over the previous year and about five times its 1998 sales.
The segment the two companies share with Tom’s of Maine, Aveeda and some products by name brands like Avon, Estee Lauder and Lancombe accounts for about 10 percent of the $2.8 billion health and beauty industry, said Maryellen Molyneaux, president of The Natural Marketing Institute, a consulting and market research company in Harleysville, Pa., that specializes in health and wellness products.
Natural personal care products are projected to take a 20 percent share of the market by 2005, said Molyneaux, whose company annually surveys more than 2,000 households to develop its market research. The segment’s growth should continue to expand by about 10 percent a year after that, she said.
Burt’s Bees started in 1984 when Quimby met a beekeeper named Burt Shavitz in rural Maine where they both lived. From old magazines, they found recipes for beeswax lip balm and polishes for furniture and shoes. They whipped up their products in an abandoned one-room schoolhouse and sold them alongside bottled honey at craft fairs. The small business grew and by 1992, it was making a half-million beeswax candles a year.
The company moved operations to North Carolina in 1994 and employs about 120 people at its headquarters and manufacturing plant in a Durham office park.
Product labels still carry images of beehives or Shavitz’s rugged, bearded face. Shavitz lives in Maine and is no longer involved with running the company.
Quimby has frequently said Burt’s Bees either will be bought out or will go public, and either would mean more cash for land purchases.
“You can’t derive long-term satisfaction by filling little jars with cream,” Quimby said in a 2001 interview with the Bangor Daily News.
She’s on the board of directors of Restore: The North Woods, a Concord, Mass.-based conservation group working to establish a Maine Woods national park.
Ken Spalding, the Maine Woods project coordinator for the group in Hallowell, Maine, told The Herald-Sun of Durham that Burt’s Bees would be sold in weeks or months to buy land in Maine. He referred calls by The AP to the group’s Maine director, Jym St. Pierre, who denied any knowledge of plans to sell the company that might benefit the conservation group.
Molyneaux said she has no knowledge of an expected sale, but she believes a company with a recognizable name would be most likely to buy Burt’s Bees to increase the distribution and sales of a brand that has already developed a strong consumer identity.
Bath & Body Works, which runs its own chain of about 1,600 stores, has shown it’s possible to take premium-priced personal care products from the health-conscious to the mainstream, she said.
Sibilski said after looking at the reported sales price, he could see a buyer willing and able to pay retailers for more shelf space doubling Burt’s Bees core earnings. Big retailers shopped by America’s masses commonly demand such fees from manufacturers.
“If these buyers think that they could get it onto the shelves at Walgreens or something, then it could be worth a lot more,” Sibilski said.
Making products like Garden Carrot Complexion Soap or Beeswax Moisturizing Creme available in grocery and drugstore chains was always part of the business plan, Quimby has said.
“I’d like Burt’s Bees to be among the mainstream consumer products people use every day,” she told Business Week last year. “With our premise of natural, botanical ingredients, why shouldn’t Burt’s Bees be in every drugstore in America?”
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Morningstar Inc.: http://www.morningstar.com
Natural Marketing Institute: http://www.nmisolutions.com
Bath & Body Works Inc.: http://www.bathandbodyworks.com/
Restore: The North Woods: http://www.restore.org
AP-ES-05-14-03 1547EDT
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