Society / Profiles

Powerhouse Houston Investor Turns Beauty Into Gold and Makes a Winning Bet on Astros

Janet Gurwitch Built an Underdog Empire Going Against Legacy Brands — and Now She Finds New Disruptors

BY // 06.07.19

Janet Gurwitch, a beauty entrepreneur and powerhouse investor, is an avid reader of business books and biographies. But the volume that has made the biggest impression on her is straight out of left field: Moneyball: The Art of Winning an Unfair Game.

The 2004 book (and subsequent movie) is about Oakland Athletics general manager Billy Beane who, when faced with a losing baseball team and a tight budget, outsmarts other clubs by analyzing baseball statistics. He used the information to recruit overlooked players with game-winning potential, and the Oakland A’s went on to win 20 consecutive games, tying for the longest winning streak in American League history.

For Gurwitch, who founded Houston-based Laura Mercier Cosmetics in 1995 the book struck an immediate chord.

“I read Moneyball when it came out, and I saw Laura Mercier as the underdog Oakland baseball team competing against the well-funded Yankees,” she says. “Except instead of the Yankees, it was Chanel. It showed me how a young brand in any industry could compete against a successful legacy brand and still win.”

With Mercier, Gurwitch hit a home run: The company was valued at more than $120 million when it sold in 2006.

Janet Gurwitch
Janet Gurwitch in the River Oaks home she shares with attorney Ron Franklin. (Photo by Arturo Olmos)

Gurwitch has taken her brand-building experience to the Massachusetts-based private equity firm Castanea Partners, where she has been operating partner since 2009. She never left Houston — she and litigator Ron Franklin share a ‘60s-era French-style house in River Oaks, and Gurwitch works out of a private office nearby.

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Her daily uniform, as she calls it, is a black jacket — usually Chanel, Alexander McQueen, or Akris — over a classic T-shirt or white blouse, a pair of skinny jeans, and Jimmy Choo heels or boots. Naturally, her beauty routine includes Laura Mercier makeup. She travels 12 to 15 weeks a year, so her carry-on is pared down to the essentials: a hardback book, bottled water, Cole Haan flats, and Xanax, for when the plane hits turbulence.

At Castanea, Gurwitch’s string of wins is impressive. She and partner Steve Berg have purchased and grown four select companies during her tenure, including edgy makeup brand Urban Decay and specialty skincare line First Aid Beauty. Urban Decay was sold to L’Oréal in 2012 for $350 million; First Aid Beauty brought $250 million in its sale last summer to Procter & Gamble.

Apart from Castanea, Gurwitch privately invested in Dollar Shave Club, a company that delivers men’s razors and other personal grooming products by mail. Co-founder Michael Dubin’s subscription-based business was at $60 million by the time Gurwitch entered the picture, and she knew the company was a game changer.

“Dollar Shave Club was a disruptor in the razor-blade industry,” she says. “Until then, men had to buy razor blades from locked cases in drugstores. It filled a need that wasn’t being met. And, it was brilliantly marketed with Michael’s sense of humor.”

Unilever purchased Dollar Shave Club in 2016 for an astonishing $1 billion.

Gurwitch is currently focusing on growing two California-based companies that were launched by women, Tatcha and Drybar. Founded by Victoria Tsai, skincare brand Tatcha takes inspiration from the centuries-old skincare routines of Japanese geisha. Tsai, a Harvard business school grad who worked for Starbucks in China, has modernized the products and kept them free of harmful ingredients such as parabens and phthalates.

“I’ve worked with Victoria on everything from product ideas to how to build an infrastructure,” Gurwitch says. “I’m always looking for products that have ‘clean beauty.’ Brands like Tatcha are gaining traction at Sephora and Ulta Beauty, which is where I get a lot of my ideas.”

With Drybar, Gurwitch has found another industry changer. As the country’s first chain of blow-dry salons, Drybar had nine thriving locations in California in 2012 when Gurwitch teamed with founder Alli Webb. Gurwitch only invests in well-branded products already doing $20 million to $40 million in revenue.

“Our strength at Castanea is knowing which levers to push to escalate the sale of a successful brand as quickly and profitably as we can,” she says. Drybar now has 120 locations around the county, including five in the Houston area. Gurwitch, who is also on Drybar’s board of directors, helped the company develop a lucrative line of hair-care products and tools and is expanding the franchise globally.

“There are very few disrupter companies, but if you can find one and get it, it’s very exciting because you can draw your own map,” she says.

A Good Eye

Gurwitch started her career in retail. As a buyer at Foley’s in the 1980s, she took a chance on an unknown jeans designer, Guess. The market was dominated by Calvin Klein and Gloria Vanderbilt, but Guess took off, and Foley’s sold more jeans than ever.

Later, as executive vice president of Neiman Marcus, she was on track to become the luxury retailer’s first female CEO. Her focus changed in 1995 when she noticed crowds at the Bobbi Brown counter, clamoring for the professional makeup artist’s natural-toned lipsticks and foundation sticks. In London, there were throngs of women at the MAC counters, indicating that the trend for new independent cosmetics brands had gone global.

“Here these young, indie companies were on the floor competing with huge companies like Chanel and Lancôme, pulling serious revenue numbers,” she says. “That had never happened before.” Gurwitch was 42 when she left Neiman’s to launch Laura Mercier.

“I’m not someone who likes risks, and starting my own company was the first — and last — risk I’ve ever taken,” she says.

The bid clearly paid off, and her stint as an entrepreneur and knack for spotting the next big thing has been an advantage at Castanea. “My background resonates with other entrepreneurs, because I’ve been there in the early days when you’re answering your own phones and doing things out of your realm of knowledge,” Gurwitch says. “At Laura Mercier, I had to learn to price lipsticks in different currencies and buy my own forklift.”

The Astros World Championship ring has 214 diamonds, 16 genuine blue sapphires and nine genuine orange sapphires.

Gurwitch joined Jim Crane as a partner in the Houston Astros in 2012. She’s also a board member.

“I thought it would be interesting to see how someone could turn around a sports brand, and I believed Jim Crane could do it,” Gurwitch says. “And he did.” The Astros won the World Series in 2017. The beauty insider is now a mega baseball fan who attends more than 20 home games each season and attends all the playoff games and spring training in Florida.

“It’s been the most fun investment I’ve ever had,” she says. “I even have a World Series ring with my name on it.”

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