Iconic beauty company, Mary Kay, has announced that it has closed its activity in Australia and New Zealand, saying market conditions are too tough for trade.
The news was shared on their website, saying that operations in the region were unsustainable, and that the brand would be focusing on their “core growth markets across the globe”.
The well-known make-up business first arrived down under in 1971, after being started in Dallas, USA in 1963.
Why The Exit?
A Mary Kay spokesperson said in a statement that a “combination in rising costs of doing business and slowing consumer spend” had been “compounded by the smaller size” of the Australian and NZ markets.
Its withdrawal was “not due to a slump in the popularity of products or our channels” and that “Mary Kay’s direct selling business model continues to operate profitably in nearly 40 markets around the world.
It’s An MLM
The model underlying the business is a controversial multi-level marketing scheme (MLM), with consultants recruited to sell Mary Kay products directly to their local networks.
There is much criticism around the way MLM’s work and their close resemblance to pyramid schemes, which are actually illegal in Australia.
Sign Of The Times
However the business model is probably not the main reason why Mary Kay withdrew from Down Under.
Marketing and consumer behaviour expert Gary Mortimer, from the Queensland University of Technology spoke to ABC News saying he believed it was a sign of the times.
“I think it’s more a case that the Australian community and society has evolved from the 1960s and 70s,” Professor Mortimer said.
“People aren’t at home waiting for a knock on the door, we don’t wait for that catalogue to arrive — those days are long gone.”
Mecca & Sephora
“The younger market are now looking at emerging, exciting brands like Mecca or Sephora, or those types of brands where there is an experience involved in the purchase of makeup — like make-up classes or blogs.
“There is a lot more of a digital element in the purchase of make-up and cosmetics,” added Prof Mortimer.
He also said that most of the salespeople didn’t derive a significant income, unless you were high up in the chain. Beauty consultants are not employees of Mary Kay and do not receive a salary or wage.
A Mary Kay spokesperson said: “The consultants have shared Mary Kay’s disappointment in its withdrawal from these markets … and is providing support to help them transition out of the business.”
On its website, Mary Kay said it would accept returned products from its independent sales staff up until 6 April 2020.
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