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Date: November 30, 1994

Location: Edgewater

Title: Nature”s Elements Goes Back to Basics

Author: Diana G. Lasseter

Subject: A down-to-earth retailer muscles its way into a crowded, competitive market

It was May 2, 1991. Throngs of shoppers milled about the Nanuet Mall in Nanuet, N.Y. in search of that special something to give Mom on Mother”s Day. People weaving their way through the mall corridors were greeted on one corner by a colorful sign set on a teal green background that read Nature”s Elements. It was undoubtedly an unfamiliar name to even the most seasoned shopper, for that Saturday marked the store”s debut in the retail world.

Inside Jan Stuart, Nature”s Elements” president, was anxiously arranging and rearranging the rainbow-colored shelves of shampoos, lotions, cosmetics and other body-care products, when a customer approached and tapped him hesitantly on the shoulder. “Do you have gift baskets?” she asked. “I want to put several of these tahings together for my mother.” Stuart thought for a moment and replied, “Give me 15 minutes.” He ran to Pier One Imports and bought up all the empty gift baskets. Then he buzzed to the A&P supermarket and filled his cart with boxes of saran wrap. Voila! The Nature”s Elements” gift basket was born.

“That”s the key to being a good retailer,” Stuart explains, tapping two fingers lightly on his desk in the company”s Edgewater headquarters. “You have to listen and react to your customers.” Three and a half years later, Nature”s Elements has assembled its first gift-basket catalog, which has been shipped to 250,000 customer and business mailboxes for the holidays. “I”m not a genius,” Stuart says. “I just listen.”

While imparting such simple philosophies, Stuart seems as down to earth as the name of his company implies. Nature”s Elements bills itself as, “Simply…skin, hair and body care. Personal care products made with pure extracts from flowers and herbs.” Since its launch at Nanuet Mall, Nature”s Elements has opened nearly 40 stores in malls from Virginia to Maine. New Jersey locations include Quaker Bridge mall in Lawrence, Garden State Plaza in Paramus, Edison”s Menlo Park mall and Livingston mall. In April the company went public, trading on the Nasdaq Smallcap. While the stock was trading in April around $3.00 per share, the price has been hovering at $2.38 per share in recent months. In the second quarter, the company reported revenues of $2.3 million and a loss of $901,821. According to Stuart, the company plans to have close to 50 stores operating by Jan. 31, 1995.

Nature”s Elements is the latest retailer to jump on that back-to-basics bandwagon. Stores like the Nature Company and Natural Wonders are appealing to a renewed concern for the planet and return to simplicity. “Consumer perception has moved toward natural being better,” says Matthew Patsky, a securities analyst with Robertson Stevens in Los Angeles. “Consequently, the sector for nature-based products is growing and continuing to attract consumers.”

Stuart recognized that trend back in 1988, when he first pitched the idea of a natural personal-care retail chain to the top management at Grace Ventures, the venture capital arm of New York City”s W.R. Grace. Grace Ventures eventually gave Stuart $1 million to develop the entire concept from products to packaging in five months.

Stuart had a long rsum in cosmetics to draw on in doing the job. After working in advertising just out of college, where one of his clients was Este Lauder, Stuart was hot on cosmetics. Living in Manhattan at the 92nd Street YMCA, he decided to invest his life savings–$2,000–and start a line of men”s personal-care products like shaving cream. With the help of a nutritionist and scientist, he developed the line, which he then tirelessly trumpeted to department stores. Robin Burns, a buyer for Bloomingdale”s mens” fragrance department, decided to give Stuart a shot, and the store began selling the Jan Stuart line.

Burns, now chairman of Este Lauder, remembers the young, energetic entrepreneur. “Jan was assertive back then in getting his foot in the door and convincing me to give him a try,” Burns remembers. “Bloomingdale”s was his first department store, and even though he was competing against the big guys like Ralph Lauren, his line became one of our top 10 sellers. Stuart was soon expanding across the country. I was always impressed with his persistence.” When offered the opportunity to develop Nature”s Elements, Stuart discontinued his men”s cosmetics line.

Stuart was able to assemble the Nature”s Elements” cast, crew and props in the five months he was allotted, and the company opened six stores in the first year. High on Stuart”s priorities was to develop a strong corporate culture. Says he: “I left the department stores because it was impossible to develop my own culture there, especially in the late ”80s, when there were so many mergers and bankruptcies.” Besides laying the foundation for a “fun, solid culture like Ben & Jerry”s,” Stuart made sure Nature”s Elements stayed in tune technologically with a top-notch computer system, bar-coded products and an automatic replenishment system that links a store”s orders to the Edgewater headquarters.

With its aisles of bath oils and bars of strawberry-scented soap, Nature”s Elements” bears a striking resemblance to the Body Shop, the British cosmetics and toiletry chain that has become famous for its social conscience. Founded in 1976, the Body Shop is the original tree-hugging retailer. It is that very image, specifically its environmental efforts, that have recently created some problems for the Body Shop. Its stock price plunged nearly 10% earlier this year when it came under scrutiny for a shampoo spill in New Jersey and other breaches to its high ethical standards. Says Stuart: “The Body Shop talks more about the environmental aspect of its business than its products. Environment is important to us, but we are first and foremost a cosmetics company.”

Is there room for one more player in an already competitive personal-care products market? Replies Stuart: “Specialty stores all stand for different things. There”s enough business for everybody in this $28 billion personal-care industry in the U.S.”

Robertson Stevens” Patsky is not so sure. He has followed the Body Shop for the past four years and witnessed the proliferation of copycat retailers. Says he: “There are tons of Body Shop knock-offs like Bath & Bodyworks. You can walk into any mall in California and see the Body Shop and four other similar stores. At some point the growth is going to slow. Stuart may believe this trend will go on for 50 years, and he plans to ride the wave. The weakest will eventually die out. The Body Shop will be a survivor and so will Bath & Body Works. I don”t know who number three will be.”

Stuart is confident that Nature”s Elements will be number three. He predicts that the company will do good business in the holiday season, which economists anticipate will be a merry one for retailers. “Who knows,” he says. “There could ultimately be a Nature”s Elements in every mall in every part of the country!” That”s a big dream. u