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Sea Change: Beauty’s Historic Opportunity

By: Andrew M. Apfelberg
Posted: November 9, 2009, from the November 2009 issue of GCI Magazine.

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CEOs can use this confluence of factors to their benefit by acquiring those competitors (in a horizontal strategy) or suppliers and vendors (in a vertical strategy) that fit well into their company’s business model. It is often cheaper to “buy” than it is to “build,” and this is especially true right now. The speed with which revenue, market share, barriers to competition and brand/reputation can grow through an acquisition strategy is significantly greater than through an internal growth strategy.

Profitability can almost always be enhanced because an acquisition forces the buyer to assess its own operations for inefficiencies and redundancies.

While competitors are hunkered down and focused on simply weathering the storm until it is clear that the recession is over, take advantage by intelligently making the bold moves required to grow your company beyond the point at which the same competitors can pose a meaningful threat. While the economy emerges from the recession, you can corner the market on the best suppliers and vendors, and enhance and solidify your relationship with the retailers whose limited shelf space is at a premium. Just because waters are choppy does not mean that they cannot be navigated. In fact, those with the vision and steady hand at the tiller to keep moving forward instead of dropping anchor will find themselves in favorable waters much more quickly. They will likely also find themselves so far out ahead of their competition, that the laggards will never catch up.

Andrew M. Apfelberg is a corporate transactional attorney for privately held middle-market companies and specializes in working with the beauty industry. He is a partner of Rutter Hobbs & Davidoff Incorporated, a full-service law firm in Los Angeles and can be reached at 1-310-789-1824.