Pure Romance in the News Pure Romance hits the road

Pure Romance hits the road

Loveland firm to find out if sex sells internationally

Premium content from Business Courier by Lucy May, Courier Senior Staff Reporter

Date: Friday, February 4, 2011, 6:00am EST - Last Modified: Thursday, February 3, 2011, 11:42am EST

Bruce Crippen | Courier

CEO Patty Brisben, with son and President Chris Cicchinelli, have big plans for Pure Romance.

After boasting another year of double-digit revenue growth, Loveland-based Pure Romance has long since proven that sex sells.
Now the purveyor of sensual lotions and bedroom toys is out to show its “relationship enhancement” formula will work internationally, too.
Pure Romance, which posted sales in excess of $120 million in 2010, quietly launched operations in Puerto Rico in October with a 5,000-square-foot warehouse there. The company plans to enter the South African market in May and will start work this year to enter the Australian market, said Pure Romance President Chris Cicchinelli.
“There is not a major global brand that is doing what we do,” said Cicchinelli, whose mother, CEO Patty Brisben, founded the company in 1993 out of her basement with $5,000 and 55 sales consultants. “It’s going to be interesting to see.”
Cicchinelli said Pure Romance selected the two new markets for their low cost of entry and because English is the dominant language in each of them. That means the company won’t have to worry about translating labels on all its products.
Last year’s expansion to Puerto Rico contributed about 10 percent of the company’s 37 percent increase in retail sales for 2010, Cicchinelli said. Just like in the U.S. and Canada, the company contracts with independent consultants to sell its products at home-based parties, offering heavy doses of intimacy education along the way. It has more than 70,000 consultants in all.

More fast growth expected

Cicchinelli expects Pure Romance’s 2011 sales to grow another 50 percent, although he’s not counting on international markets to make up much of that growth, he said. The firm’s 2009 total sales were $92 million, according to Courier research.
“Maybe 5 percent of our growth in revenue this year could come from South Africa,” he said. “We’re still working with government officials.”
International business experts note that different countries have different regulations about the contents of lotions and creams, and some have different outlooks on what constitutes an employee versus an independent consultant.
Pure Romance is smart not to bet the company on these international expansions, local experts said.
“It’s the very first baby step, and you want it to be a close match to your home market,” said Mee-Shew Cheung, interim director of the Center for International Business at Xavier University’s Williams College of Business. “So you don’t have to turn yourself inside out and upside down.”
But experts caution that picking English-speaking countries is no guarantee of success.
“In some respects, it’s more difficult entering those markets than it is when the language is different and the culture is vastly different,” said Larry Gales, academic director of the University of Cincinnati’s International Program and an associate professor of management.
“When you go into other English-speaking markets, you sometimes assume everything is going to be the same or somewhat the same,” he said. “There can be significant differences in culture, things like how open people are about emotion and sexuality.”
Or as Ralph Katerberg, a UC professor of organizational behavior, put it: “Cultural differences can bite them, and they won’t know.”
Genine Fallon, Pure Romance’s director of public relations, said the company is finding that the U.S. is more open to the idea of Pure Romance’s products than many international markets, despite our conservative reputation. But so far, the expansion strategy appears to be paying off for the company.
“Puerto Rico is en fuego,” Cicchinelli said. “They’re so hungry for education. It is definitely a fiesta all the time, and they are just so excited.”

‘Cultural issues’ a key

Researching each market – including its legal systems, its view of direct selling and its cultural differences – will be key to the company’s long-term prosperity, Gales said.
Gales said he tells business executives they must understand three broad categories of issues before entering any new international market: the legal and political systems in place and how they could constrain or facilitate the business; the cultural environment as it pertains to marketing, product positioning and hiring; and the kinds of media outlets available to market the company’s message.
Fallon said the company sought the help of a business consulting firm when planning its international expansion, but “nobody wanted to touch it because of the category” so the company decided to go it alone.
Gales said that might be because those consulting firms don’t understand how to “deal with the product,” but he said Pure Romance was smart to seek the help.
“Navigating the cultural issues around sex, sexuality and intimacy, if there’s anyplace where country culture is going to be a tremendous hurdle, it’s a business like that,” he said.
Still, company founder and CEO Brisben said she views Pure Romance’s products and its mission to enhance relationships as an asset, not a liability.
“No matter what, sex is going to be there,” she said.

http://www.bizjournals.com/cincinnati/print-edition/2011/02/04/pure-romance-hits-the-road.html