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[As of Sep 2011 known as Alberto-Culver LLC, formerly New Alberto-Culver LLC, the "old" Alberto Culver Company. There is a holding company above this called Alberto-Culver Company, forrmerly New Aristotle Holdings Inc. For the purposes of the catalogue, these are the records of the "old" or "original" Alberto Culver Company, as established by Leonard Levin.]
Company name: Alberto-Culver
Date founded: 1955
Date of acquisition: 2011
Prior to its acquisition by Unilever in 2011, Alberto Culver was an American company with headquarters in Melrose Park, Illinois. It had been founded in 1955 by Leonard Lavin.
Leonard Lavin was born in Chicago on 29 October 1919. Lavin's autobiography, Winners Make it Happen (2004), notes that his father Samuel started up no fewer than three businesses during his lifetime, which were subsequently 'handed back to his employees'. These included one of Chicago's first taxi firms and a small chain of appliance shops. Lavin's mother was an Orthodox Jew.
A few weeks before Lavin was due to graduate from the University of Washington, which he attended on a basketball scholarship, his father became gravely ill and Leonard was called home so his mother could give up her work to look after her husband. He managed to find employment by seeking out a firm that sold cosmetics, Lucien LeLong, and asking for a job. Lavin was immediately hired to carry out a range of tasks in the fragrance business, including selling. His employment at LeLong was disrupted by the Second World War; Lavin enlisted in the US Navy and served on a number of combat vessels in the Pacific. During his time in the Navy, Lavin composed and recorded a song with a friend. Upon their return after the war, they discovered that this song was being played on the radio and successfully pursued a copyright litigation. The $50,000 payment received by Lavin for the song rights would later be used to start his own business.
Initially upon his return to life as a civilian, Lavin continued his employment at Lucien LeLong. After giving a sales talk at the Ambassador Hotel in Chicago, Frank Hall, who owned the rights to a home perm product called Beauty Wave, sought out Lavin and asked him to become the sole travelling salesman for Beauty Wave. Lavin raised the money to buy the car necessary for carrying out this job by selling a diamond ring recently returned to him by his then-fiancée, whose mother disapproved of the match. In 1947, though, he met and married Bernice, combining their honeymoon with a West Coast sales trip.
Bernice Weiser had also been born in Chicago, in 1925, and was raised solely by her mother following her parents' separation. A case of septic arthritis caused her to collapse while descending a flight of stairs at the age of nine or ten, a condition that, in Leonard Lavin's words, 'left her on her back for about two years'. Following her recovery, Bernice's first job was as an office girl for an auto parts manufacturer in Chicago, Arnold Maremont. Due to her competency at work, her manager requested that she help him to study for his certified public accountant examination, an exam that she took and passed at the same time as he failed. She was then appointed as the company's controller, a job in which she remained immediately following her marriage to Lavin.
After a year of making sales calls for Beauty Wave, Lavin collected $50,000 in commission. Frank Hall offered him the role of national sales manager for a starting salary of one hundred dollars a week, but Lavin believed he could earn significantly more as a commission salesman. Instead, he accepted the job on the condition that he would earn 20% of the company's equity in the event that national sales reached the sum of two million dollars. However, when the success of the company did reach these levels, Hall changed his conditions, offering Lavin $500 a week plus expenses to run the entire company. Recognising that there would be little potential for company growth beyond the Beauty Wave line, Leonard refused this offer and instead set up his own national sales company with his wife as a partner, the Leonard H. Lavin Sales Company.
The first product sold by the Leonard H. Lavin Sales Company was in fact Beauty Wave, quickly followed by Q-tips, an over-the-counter analgesic, a range of beauty baths, and a paint-by-numbers set. The initial sales force consisted of fifteen employees paid on commission, located in cities such as Chicago, Minneapolis, Detroit, Los Angeles and New York.
Television advertising was first deployed by Lavin in 1950 to sell Stopette, a deodorant with a squeezable bottle that had been developed following a meeting with the Swiss cosmetics chemist Jules Montenier. These early television commercials were aired during cheaper slots, mainly during wrestling and boxing shows. Once the water had been tested, Lavin decided to sponsor a whole television programme, What's My Line?, using both Stopette and the Toni home permanent kit. Stopette proved a success and, feeling disgruntled at his share of the profits, Montenier bought out Lavin's shares in the product.
Using the capital from the sale of Stopette, Lavin decided in 1954 to purchase a relatively small company called Alberto-Culver when he was told about the popularity of a hair dressing called Alberto VO5 by the president of a drug store chain. The manufacturer of the product carried out no advertising at this point, so the high volume of sales was notable. It was reputed to be a particular favourite with Hollywood actresses because hair stayed shiny and well-conditioned under bright studio lighting. Although Lavin was really only interested in the VO5 product, he agreed to buy the whole company, which consisted of a portfolio of over a hundred products, from the owner, a Mr. Hoffman. In order to raise the capital needed to buy Alberto-Culver, Leonard agreed that three new partners-F.E. McCabe, W. Clement Stone and Russell Arrington-could share twenty-five percent of the equity in exchange for a £500,000 stake.
Once the sale had been finalised, Lavin began to phase out all products besides VO5. He also employed a chemist from Germany to develop innovative new products for Alberto-Culver. In the first year of business, sales tripled-a success repeated the following year, when they reached one million dollars. In 1960, a new manufacturing facility was constructed in Melrose Park, Illinois at the site which was to become the company's headquarters.
Part of the company's success was due to its effective use of television advertising. At the time, advertisers would typically buy a sixty-second spot for promoting their brand. However, the Albert-Culver budget wasn't large enough for this to be worthwhile, so they split each sixty seconds between two products. This proved controversial: networks were uneasy about potential loss of profit, while Proctor and Gamble worried about the potential threat to their market dominance. They complained that Alberto-Culver and the other advertisers copying their strategy were in breach of the Code of the National Association of Broadcasters, which stated that broadcasters must not run more than two consecutive advertisements. Together with Helene Curtis, Alberto-Culver challenged this complaint and won, starting a trend of thirty second advertisements.
In 1961, a small percentage of Alberto-Culver stock was offered for sale to the public for the first time. This offering of stock was oversubscribed, costing twenty-two dollars a share. By 1964, the annual sales volume of the company had reached $100 million.
Leonard Lavin's wife Bernice had been appointed as the Vice-Chairman of the company, managing the human resources, accounting, manufacturing and legal departments, while Lavin himself took a key leadership role in relation to marketing strategy. In an address to the New York Marketing Executives Association in April 1962, he attributed the company's success to the strong emphasis placed on marketing strategies, saying:
If you judge us to be successful [the company went from sales of $400,000 in 1956 to $80,000,000 in 1963], chalk it up to innovator products, excellent packaging, premium pricing, hard-driving promotions, and heavy TV backing of effective creative commercials.
This was shortly after the Alberto-Culver range had expanded to include dentifrice, a headache remedy and a first-aid item, and in the midst of what a contemporary business analyst termed a 'courageous media investment policy'. The company itself described the effects of this approach thus:
The sales for our established brands are growing at a greater rate than their substantial advertising budgets. [...] Our aggressiveness continues with the added incentive that once we get a brand off the ground, its ability to grow and return profits to the company accelerates at a much greater rate than the increased advertising expenditure.
From the first five years of the company's existence onwards, Alberto-Culver was happy to embrace multi-brand competition, having multiple brands within the same market niche.
Recognising that Alberto-Culver was not yet reaching the section of the market made of people who bought hair products at beauty salons, toward the end of the sixties Lavin decided to purchase 'Sally Stores', a wholesaler chain based in the South that operated through shops open solely to salon owners and beauty professionals. This proved a success; by 2003, the company owned more than 2,300 Sally Beauty Supply Stores.
In 1993, the company launched an internal initiative to improve transparency and openness in communication between high-level managers and employees. This was intended to increase both employee loyalty and efficiency by educating staff about company financial strategies and creating an environment in which they could potentially offer criticisms of current practice. Leonard Lavin described the differences between past approaches and this new 'philosophy' in the following way:
In my day, information was shared with those who had a need to know. Now the philosophy is employees should need to know everything that is going on so that they can be of greater help to the company.
When Leonard Lavin turned seventy-three, their daughter Carol Bernick was appointed as executive chairman of the board, while her husband Howard became CEO and president. Carol had been working for the company since 1974, spending many years as head of the consumer products division where she introduced several successful new products. Howard Bernick had been appointed chief operating officer in 1986 and became CEO in 1994. Bernice Lavin ceased to be a director of the company in 1999.
It was announced in 2010 that Unilever was to buy Alberto Culver for $3.7 billion. At this point, Alberto-Culver products were being sold in 120 countries. The acquisition was completed in 2011 and meant that Unilever became the world's leading company in hair conditioning, the second largest in shampoo, and the third largest in styling. Under the terms of an agreement with the U.S. Department of Justice, Unilever divested the Alberto VO5 brand in the U.S, as well as their own Rave brand.
Unilever also agreed to divest the bar soaps business to Lornamead. This company acquired the Cidal and Wright brands outright and also obtained a perpetual licence for Simple bar soaps in the UK, Ireland and Channel Islands.
In the UK, the Alberto Culver head office was based in Basingstoke. It also had a distribution centre in Bridgend and a factory in Swansea, which were closed in 2013 and 2014, respectively. Production lines from Swansea were transferred to Port Sunlight and Bydgoszcz, Poland.
At the time of the acquisition, Alberto Culver's portfolio of products included the following:
Baker's Joy: Non-stick spray for use in baking in the U.S. It contained oil and flour to grease and flour pans and other baking equipment. It was also low in calories and contained no fat, sodium, cholesterol, or carbohydrates.
Consort: Line of men's grooming products launched in 1965.
FDS: Following visits by Leonard Lavin to European pharmacies and convenience stores, it was decided to introduce a feminine deodorant product to the Alberto-Culver range, inspired by the samples purchased during the trip. The Alberto-Culver research team developed a product called FDS (Feminine Deodorant Spray-or, in the advertising, 'Feminine, Discreet, Sensual'), which was launched in 1966. The products were hypo-allergenic and contained Vitamin E and camomile.
Initially, Alberto-Culver was challenged by the Federal Drug Administration (FDA) about one of the ingredients in FDS, hexachlorophene, which it claimed could be harmful. Lavin requested to see their evidence, in order to present counter-evidence. Following a meeting with the FDA, the ban on hexachlorophene was only partially lifted (it was permitted in hospitals and clinics, but not in retail products), so FDS was reformulated.
By 2011, the following FDS products were available:
Feminine Sprays - Extra Strength, Baby Powder, Shower Fresh, White Blossom, Sheer Freshness, Delicate Breeze, Ocean Breeze, Sheer Tropics, Exotic Kiwi.
Feminine Washes - Shower Fresh Wash, Sheer Tropics Wash, Baby Powder Wash.
Just for Me: Part of the Soft & Beautiful range (see below), this range was designed for children. Products available in 2011: Oil Moisturising Lotion, 2-in-1 Conditioning Shampoo, 2-in-1 Conditioning Detangler, Crème Conditioner and Hairdress, Scalp Conditioner and Hairdress, Smoothing Gel, and Curl Smoother Crème.
Molly McButter: Natural Butter Flavour Sprinkles and Natural Cheese Flavour Sprinkles. Added to steamed or grilled vegetables, baked or mashed potatoes, rice, pasta, fish, hot cereal, and popcorn. Fat free, with just five calories per serving.
Motions: Range of women's hair products, including shampoos, conditioners, relaxers, treatments, hairdress and lotions, and styling products.
Mrs Dash: Salt free seasonings, developed by Carol Lavin Bernick in the 1980s, when she was a marketing executive for Alberto Culver; she went on to become Executive Chair. Fourteen different varieties were available in 2011: Original Blend, Garlic & Herb, Table Blend, Extra Spicy, Onion & Herb, Lemon Pepper, Italian Medley, Tomato Basil Garlic, Southwest Chipotle, Fiesta Lime, Caribbean Citrus, Steak Grilling Blend, Chicken Grilling Blend, and Hamburger Grilling Blend. They were all salt free and contained no MSG. There were also six marinades - Zesty Garlic Herb, Lemon Herb Peppercorn, Mesquite Grille, Southwestern Chipotle, Spicy Teriyaki, and Garlic Lime.
Nexxus: Available in the U.S, this brand comprised shampoos and conditioners, treatments, and styling products.
Noxzema: A range of skin care products, such as make up removal cloths, cleansing creams, blemish pads, cleansers, and foaming wash. They also had a line of shaving products for women. The brand was acquired by Alberto Culver from Procter and Gamble in 2008.
Simple: Range of skin products, including bath and shower washes, cleansers, eye care products, hair care products, Derma products for sensitive skin, Simple for Men, moisturisers, sun care, toiletries and liquid soap, bar soaps, wipes, baby, teen skincare, lip care.
Soft & Beautiful: A range of hair care products.
Static Guard: Product which was sprayed onto clothes to eliminate static cling. It could also be used on furniture and upholstery, electronic equipment, blankets, etc.
St. Ives: Sold in the UK, U.S, Canada, Australia and New Zealand. Ranges comprised facial products, hand and body lotions, and body washes.
Sugar Twin: Sugar substitute sold in U.S and Canada.
TCB: Affordable line of products for women. 2011 products as follows: Naturals Hair & Scalp Conditioner, Naturals Olive Oil No-Lye Relaxer (coarse), Foaming Wrap-n-Set Lotion, Naturals Olive Oil No-Lye Relaxer (regular), Lite Hair & Scalp Conditioner, Hair Food.
TRESemmé: Available in Argentina, Australia, Canada, Chile, Denmark, Finland, Mexico, Norway, New Zealand, South Africa, Spain, Sweden, UK, USA. Range of salon quality affordable hair care and styling products. TRESemmé was the No. 2 styling brand in the U.S at this time.
VO5: Sold in the UK, U.S, Canada, South Africa, Australia and New Zealand. The VO5 brand consisted of shampoos and conditioners, conditioning treatments, and styling products. Male and female products available. It was the UK's No. 1 styling brand.
In October 2011 Unilever announced that it had sold the Culver Speciality Foods division, which came to Unilever after the purchase of Alberto Culver, to B&G Foods. The division produced brands such as Mrs Dash, Molly McButter, Sugar Twin, Bakers Joy, and Static Guard.