Roxanne Quimby Case

Roxanne Quimby CaseZacharakis

Roxanne Quimby Epilogue♌ 1998 $8 mm rev.♌ 35% pre-tax income♌ massive product turnover - all skin care products♌ 20 employees♌ 3000 stores♌ Bought Burt out in 1999, he stays on asspokesman♌ 2001 $21M -- 32M rev; 120 person plantZacharakis

ZacharakisPatricia ClohertyPatricoff and Company

Benefits of Lifestyle Firms♌ Need fewer resources – bootstrapping♌ Greater control over operation• Fewer employees• Fewer investors; probably no active investors♌ Can adapt business model based uponmarket reaction – fewer fixed costsZacharakis

Benefits of HPV♌ Greater interest from professional equityinvestors♌ Smaller equity position, but greater reward• Small piece of a large pie♌ Create legacy• Generate jobs• Generate wealth to yourself, employees,investors, other stakeholders and communityZacharakis

Organic Growth♌ Quimby saw an opportunity to “grow herbaby.”♌ Not serendipity, but a vision that evolves♌ Take steps early on to keep “options” open• Lay groundwork (build network)• Establish model that is replicable• Record of success to show future stakeholdersZacharakis

Executive LimitGrowthTimeZacharakis

Executive Limit Symptoms♌ Entrepreneurs have a difficult timemanaging on-going organizations♌ Transition is most difficult during the highgrowth phase♌ Failure to replace entrepreneur can lead toventure failureZacharakis

Who is most susceptible♌ Dogmatic authoritarians♌ Lack management experience♌ Engineer/technicianZacharakis

How did Roxanne ManageTransition?♌ Lives in NYC♌ Backfilled talented executives – she is notinvolved in day-toto-day♌ Hit $56M in 2003 sales♌ Sold for $180M in late 2003♌ Retain minority shares♌ Employment contract as consultant for up to 2years♌ Considering a run for Governor of MaineZacharakis