Latest / The Front / Loyalty and labour in the brutal business of beauty

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Loyalty and labour in the brutal business of beauty · The Front

• 0:04
  Speaker 1: From The Australian. Here's what's on the front. I'm Claire Harvey.
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  Speaker 1: It's Tuesday, January thirteen, twenty twenty six. There's an almighty
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  Speaker 1: cultural fight going on over one of Australia's oldest literary gatherings,
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  Speaker 1: the Adelaide Writers' Festival. The overall Adelaide Festival Board, with
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  Speaker 1: the backing of State Premier Peter Malanauskas, disinvited controversial anti
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  Speaker 1: Zionist academic runner Abdelphatar, who's called for the destruction of Israel.
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  Speaker 1: Abdelphatar's bumping prompted scores of writers to boycott the event
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  Speaker 1: on free speech grounds. Now publisher Maury Schwartz is getting involved,
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  Speaker 1: accusing the writer's festival's boss of deliberately provoking the fight.
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  Speaker 1: At the Australian dot com Dot a you can read
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  Speaker 1: all about that complicated. Staush Brands is a billion dollar
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  Speaker 1: Australian cosmetics empire with legions of devoted fans thanks to
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  Speaker 1: a genius loyalty scheme. Its founder Joe Horgan, one of
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  Speaker 1: the country's most celebrated entrepreneurs, has a message of female empowerment,
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  Speaker 1: but as Mecha destroys the old school department store model
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  Speaker 1: of Australian beauty retailing. It has also had to deal
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  Speaker 1: with women, its customers and its staff questioning what the
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  Speaker 1: business is really all about. That's today's story.
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  Speaker 2: Okay, I have the best hack ever for getting more
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  Speaker 2: bang for your buck At Mecca.
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  Speaker 1: Mecha sells makeup, perfume, shampoo, candles, and it also sells
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  Speaker 1: a sense of belonging. The brand's slick, multi layer loyalty
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  Speaker 1: scheme has turned thousands of women on social media into
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  Speaker 1: super users. On TikTok and Instagram, they unbox and test
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  Speaker 1: out their purchases, giving Mecha the kind of free publicity
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  Speaker 1: other brands can only envy.
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  Speaker 3: Hi, guys, it's Mecca beauty loop times.
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  Speaker 2: So I like to save up my purchases from Mecca
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  Speaker 2: for beauty loop time.
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  Speaker 3: That way I can get my beauty loop. But I'm
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  Speaker 3: not spending money just to get the beauty loop.
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  Speaker 1: I was just meant to get my boxed lean. To
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  Speaker 1: get into the beauty Loop, customers have to spend more
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  Speaker 1: than three hundred dollars on makeup, skincare and fragrances in
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  Speaker 1: a calendar year, and then keep spending to stay in
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  Speaker 1: the program or move to higher tiers. In return, mech
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  Speaker 1: out sends them gift boxes. And this is where the
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  Speaker 1: risk arises. When you hand your marketing to an army
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  Speaker 1: of empowered civilians with social media platforms, you better keep delivering.
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  Speaker 3: Back again with another disappointed review of the Mecca beew loopbox.
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  Speaker 3: This is the biggest failed beauty loop sexer here and
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  Speaker 3: the context Mecca has released the world's worst advent calendar
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  Speaker 3: again this year. It's coming to the point where I
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  Speaker 3: think this is just one big inside joke.
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  Speaker 4: Look at that setting screen.
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  Speaker 1: There's an ultra secretive top layer where you have to
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  Speaker 1: spend something like ten thousand dollars per annum to get in,
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  Speaker 1: and in return, Mecha sends you gifts like candles.
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  Speaker 5: I don't know whether be proud of myself or ashamed,
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  Speaker 5: but I have been invited into this special club with
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  Speaker 5: very small membership with the Mecca called Magic Circle, which
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  Speaker 5: means we have our own concierge team, a bunch of
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  Speaker 5: people who find things if we really need to find
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  Speaker 5: things around the world that we're trying to find in
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  Speaker 5: the makeup line and skincare line.
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  Speaker 1: Because Mecca ever do sales.
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  Speaker 3: I used to get us this all the time, when
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  Speaker 3: I work there.
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  Speaker 1: The answer is yes, once a year, Boxing day, but
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  Speaker 1: that is their only sale they do amazing hotel.
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  Speaker 3: Sorry, a sale category with nothing in it.
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  Speaker 1: Your favorites will always be the same price. Angelicas Snowden
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  Speaker 1: is a business journalist with The Australian, and she spoke
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  Speaker 1: to the Front's Kristin Amyot, and you've been.
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  Speaker 2: Reporting on the beauty retail chain Mecha this year. Tell
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  Speaker 2: me do you shop there?
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  Speaker 3: I used to shop there, however a number of years
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  Speaker 3: ago I stopped, and I think the reason for that
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  Speaker 3: is I'm not an avid makeup user, but I found
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  Speaker 3: the convenience of it to be fantastic. It started from
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  Speaker 3: me buying a mascara all the way up to shampoos
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  Speaker 3: and conditioners, which ended up costing me a lot of cash,
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  Speaker 3: and it kind of prompted me to look at myself
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  Speaker 3: in the cold, hard light of day and go have said,
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  Speaker 3: some other options out there, and I might want to
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  Speaker 3: consider them. I have done a lot of dupe purchasing,
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  Speaker 3: which I know is very unpopular in the makeup industry,
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  Speaker 3: but cost of living is a real thing and I
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  Speaker 3: feel that there are a lot of cheaper alternatives out there,
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  Speaker 3: not to say that the products that Mecha stocks aren't
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  Speaker 3: fabulous or very good quality. I think there is a
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  Speaker 3: pretty good range out there as well, though.
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  Speaker 2: And that's the thing about Mecha, isn't it. They don't
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  Speaker 2: tend to go on sale or do a huge amount
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  Speaker 2: of promotions outside of their membership program.
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  Speaker 3: Exactly, and in my reporting that's been one of the
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  Speaker 3: most consistent consumer concerns about the brand. I guess you're
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  Speaker 3: already looking at products that have a high price point,
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  Speaker 3: and that's because their luxury products. You walk into a
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  Speaker 3: Mecha store and you can instantly see that the service
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  Speaker 3: is fantastic and the products are also fantastic. Nonetheless, there's
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  Speaker 3: a lot of online I think discussion about a lack
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  Speaker 3: of sales, and further that sort of stems from a
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  Speaker 3: lack of competition. I guess as well.
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  Speaker 4: Only one percent of written history is about women. There's
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  Speaker 4: a whole lot of stories to be told.
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  Speaker 3: Joe Hoggan is by all accounts, one of the most
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  Speaker 3: successful and effective business people in Australia.
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  Speaker 4: Nearly thirty years ago, when I started Mecca, there was
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  Speaker 4: a dream to allow people to experience beauty differently. Beauty
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  Speaker 4: is not just about the products it's much more importantly
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  Speaker 4: about how it makes you feel, how you get to
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  Speaker 4: express yourself.
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  Speaker 3: She started with one store about thirty years ago and
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  Speaker 3: has grown this business into one of the most successful
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  Speaker 3: retail businesses in Australia. And I think really interestingly she has,
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  Speaker 3: you know, effectively taken from underneath David Jones maya big
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  Speaker 3: department stores and offering that they had really hoped to
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  Speaker 3: deliver to customers. But I think over the last ten
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  Speaker 3: to fifteen years we've really seen Devia Jones Mayers not
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  Speaker 3: be able to compete with mecha and physically. I think
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  Speaker 3: her presence in Melbourne, in particular in Burke Street right
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  Speaker 3: opposite David Jones, is a pretty good indication that she's
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  Speaker 3: won that war.
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  Speaker 4: Our purpose at Mecca from the very get go has
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  Speaker 4: been to embolden through beauty. How do you make people look,
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  Speaker 4: feel and most importantly be their best.
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  Speaker 2: There have been persistent rumors that Joe Horgan is going
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  Speaker 2: to leave Mecca, but she's indicated she's not going anywhere,
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  Speaker 2: and in fact, she has suggested that she has plans
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  Speaker 2: to take the company global, beyond Australia and New Zealand.
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  Speaker 2: Have you been able to get to the bottom of
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  Speaker 2: where those rumors are coming from and are there any
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  Speaker 2: truth to them.
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  Speaker 3: Joe Horgan emphatically denies that she is selling her business
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  Speaker 3: and in fact insists that she is in this And
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  Speaker 3: I've asked a number of times if they're planning on
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  Speaker 3: floating the business on the ASX, considering it is so successful. Again,
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  Speaker 3: they deny that and they want to stay private. The
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  Speaker 3: only thing I can say about this is that Horgan
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  Speaker 3: is ambitious. She has expressed interests in expanding the business globally,
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  Speaker 3: and certainly I think over the next few years she'd
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  Speaker 3: look at expanding those plans.
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  Speaker 2: You reported that the company was late in filing its
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  Speaker 2: financial documents over the past couple of years. It's now
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  Speaker 2: done so on those records have revealed a revenue of
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  Speaker 2: over a billion dollars. Did it face consequences for its lateness.
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  Speaker 3: We're not sure yet. What I can say, though, is
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  Speaker 3: that the corporate kop Asseic is investigating that practice. And
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  Speaker 3: you know, I recently checked in with them to ask
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  Speaker 3: if there was any updates that they could give me.
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  Speaker 1: They said not yet, but and did get to have
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  Speaker 1: a look at Mecca's financial records.
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  Speaker 3: What they revealed is that this business is performing extremely well.
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  Speaker 3: So before six months ago, all we knew about was
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  Speaker 3: a company called Mecca Brands. Every year, albeit late, they
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  Speaker 3: would report their results and perhaps they would report one
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  Speaker 3: hundred and sixty eight million dollars in profit over the
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  Speaker 3: last sort of ten years or so, which is good,
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  Speaker 3: but considering the growth of this business, it probably is
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  Speaker 3: a bit small. However, we realized there's actually a larger
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  Speaker 3: company involved called RTCH and that has shown in the
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  Speaker 3: same period of time, over about ten years, a nine
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  Speaker 3: hundred million dollar profit. So that's a huge difference and
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  Speaker 3: it explains a lot in terms of the growth, how
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  Speaker 3: many more stores they're opening, how perhaps they're using the
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  Speaker 3: cash that they're generating to invest back into the business
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  Speaker 3: to keep funding more activities.
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  Speaker 1: Over the past couple of years, Angelica has done a
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  Speaker 1: series of stories on workplace dramas at Mecha that went viral,
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  Speaker 1: allegations that Mecha's high performance, high pressure culture left some
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  Speaker 1: staff shattered. Mecha's workforce is largely female, and these accusations
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  Speaker 1: came from women. One executive launched action against the company
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  Speaker 1: after being made redundant while she was on maternity leave.
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  Speaker 1: Another said she was made redundant. Shortly after returning to
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  Speaker 1: work post baby and X, staff told Angelica about a
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  Speaker 1: workplace seminar that made them feel Mecher put its own
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  Speaker 1: interests first. A lunchtime seminar about options for egg freezing.
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  Speaker 1: Woman told Angelica it was all about having staff work longer.
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  Speaker 1: Mecha said the seminar was way back in twenty seventeen
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  Speaker 1: and was actually a response to staff requests for information
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  Speaker 1: about fertility. Mecha also said it was proud of the
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  Speaker 1: fact it asked employees to work hard, saying one of
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  Speaker 1: its core values was whatever it takes.
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  Speaker 2: Mechas faced a handful of legal actions from former employees,
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  Speaker 2: both in the federal court and the Victorian Civil Administrative Tribunal.
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  Speaker 2: What have you learned over the course of your reporting
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  Speaker 2: about the workplace culture at Mecca as a result of
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  Speaker 2: those legal proceedings.
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  Speaker 3: I've learned, based on those legal proceedings that the workplace
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  Speaker 3: culture is intense, it's high pressure, it's busy, as you
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  Speaker 3: would probably expect with one of the most successful retail
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  Speaker 3: businesses in the country. A number of the matters that
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  Speaker 3: I had reported on had resulted in women signing a
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  Speaker 3: non disclosure agreement Mecca's a private company. It's entitled to
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  Speaker 3: ask its staff to sign these types of contracts. There's
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  Speaker 3: no issues there. What it means, though, is that the
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  Speaker 3: transparency around the culture inside this company is going to
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  Speaker 3: remain without scrutiny beyond what I've been able to report
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  Speaker 3: on so far.
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  Speaker 1: Coming up Mecca's record on gender pay equity.
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  Speaker 2: You reported earlier that Mecca has one of the biggest
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  Speaker 2: gender pay gaps of any company in Australia. It's fifth
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  Speaker 2: on the list I believe. Does that strike you as
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  Speaker 2: odd given Mecca's customer base by and large is women,
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  Speaker 2: A lot of the workforce is also women, and how
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  Speaker 2: does that factor into this broader conversation about company culture. Yes,
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  Speaker 2: it struck me as particularly interesting because Mecca is a
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  Speaker 2: company that has always promoted women Outwardly says it is
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  Speaker 2: a company that supports women not only in its sort
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  Speaker 2: of the sale of its retail products, but in its
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  Speaker 2: philanthropic efforts as well. So the values of this company
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  Speaker 2: are all about female empowerment and equality. When I noted
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  Speaker 2: the gender pay gap results, I just thought it was
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  Speaker 2: interesting in terms of the public message that this is
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  Speaker 2: a company that's about equality, but in practice. As with
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  Speaker 2: many other companies, retail workers, who are dominated by women
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  Speaker 2: in this company are the lowest paid of the company.
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  Speaker 2: And in fact, at Mecca, a lot of their tech workers.
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  Speaker 3: Are men and they're the ones who had paid the
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  Speaker 3: big bucks.
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  Speaker 2: And has Mecha's performance in that space improved over the
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  Speaker 2: past couple of years and what do they say about
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  Speaker 2: what they're doing to close that gender pay gap. Mecca
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  Speaker 2: says that it has improved and that it's an active
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  Speaker 2: area that they're working on. They say, we know we're
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  Speaker 2: not perfect, but we're focusing on progress, which we've seen
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  Speaker 2: in this year's results.
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  Speaker 3: It was also interesting to note Sephora's results, which you
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  Speaker 3: would probably say is Mecca's direct competitor in Australia and
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  Speaker 3: they had a smaller gender pay gap than Mecca did.
• 14:46
  Speaker 1: Angelica Snowden is a business reporter with The Australian. You
• 14:49
  Speaker 1: can read her work anytime, plus all the nation's best
• 14:53
  Speaker 1: business news at the Australian dot com dot a U