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- July 20, 1981
- Vol. 16
- No. 3
As a Merchant of Beauty, Merle Norman's J.B. Nethercutt Has Grown Handsomely Rich
Merle Norman's 2,700 licensed "studios" have made a mark on their 2,000 owners, 96 percent of whom are women. "We train them so they can turn a profit the first day," says Nethercutt, who estimates that it costs $26,000 to open a Merle Norman shop. "All we want are owners with intelligence and reasonable looks. We don't want beauty queens. We want average women—because that's who our customers are." With its moderate prices—J.B. packages his products in plastic instead of glass to hold down costs, which range from $3 for cosmetic sponges to $35 for a moisturizer—Merle Norman has grown to be one of the 10 largest cosmetics companies in America. And those "average women" keep coming in to take advantage of one of the most generous free-sample policies in the industry. Says Merle Norman President Gary Hollister: "Anyone is welcome to get a free make-over and then walk out the door and never buy a thing."
J.B. co-founded Merle Norman Cosmetics with his Auntie Merle, who started the company in their Santa Monica, Calif. kitchen 50 years ago. She raised J.B. after his mother, Florence, died and his father, Carl, export manager for Studebaker, sent him and two siblings to live with Mrs. Norman, who had no children of her own. She taught him at an early age—14—how to sell her home-cooked cleansing cream door to door. "That's when I learned how hard it was to part the public from their money," J.B. says today. After abandoning his boyhood ambition of becoming an American Indian, J.B. went to Caltech for only a year, then dropped out to go into business with his aunt (as a chemist) at $6 a week. He soon invented his first cosmetic, a blush rouge that is still his No. 2 profit-maker. "I had a flair for cosmetic chemistry, which is part science and part art," J.B. says. That was in 1932, a year after Merle opened her first studio in Ocean Park, Calif. with $150. The second was opened a year later by Blanche Martin, a sales clerk Merle initially wanted to fire because she sold more than Merle did. At J.B.'s suggestion, Blanche set up her own shop in Santa Barbara and bought her cosmetics wholesale from Merle.
Merle Norman died in 1972, but J.B. still treats his employees like family: He throws annual company picnics in the style of Marie Antoinette, which, as the chauffeur says, "aren't like any box supper you've ever been to." And his family is in the business too. Sons Jack II, 44, and Robert, 41, are on the board of directors, and grandson Jack III, 19, spent a summer in the factory. Mommy—J.B.'s wife, Dorothy Sykes—started working for Merle in 1932 and still travels all over the world with J.B. on company business. During the week they live in L.A.'s Brentwood Park. Most Saturdays they shuttle by Rolls-Royce to San Sylmar, as they call their lavish retreat. There they hold sumptuous dinner parties prepared by French chef Yvon Hunckler. "My favorite one," J.B. chuckles, "was the night we had a bank president on one side of the table and his janitor on the other and they were both unaware who the other was."
The Nethercutts, of course, use Merle Norman products—Mommy the cosmetics and J.B. the skin treatments. At parties Mommy appears with a five-carat diamond on each ear and the magnificent blue "San Sylmar sapphire" around her neck. To stay in shape J.B. fasts one day a week to make up for Yvon's cuisine, and he always has a diamond stud or an opal-and-gold bar adorning his silk tie. "The tragedy of my life," J.B. jokes, "is that I don't have a college education and will never make anything of myself."
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