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BHC - Meehan 122404

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    12-24-04

    BEVERLY
    HILLS BUSINESS

    Profile of:
    Paula Kent Meehan

    ”After painfully coming to the conclusion Hollywood wasn’t going to make me the next Joan Crawford, I wanted to control my own destiny”
    —Paula Kent Meehan

    By John L. Seitz – Courier Managing Editor

          Thanks to a $3,000 fee from a beer commercial 44 years ago, a worldwide mega-empire was launched by an aspiring young actress who paved the way for the emerging phenomenon of women entrepreneurs, and she also happens to be a native daughter of Beverly Hills.
          Paula Kent Meehan, though actually growing up in Burbank, returned big time to her roots with her 1971 purchase of Elvis Presley’s former canyon home and the 1994 acquisition of the landmark George W. Elkins building at Canon Dr. and Santa Monica Blvd. to headquarter her new enterprise, Kenquest, Inc. She is also heavily involved in establishing a permanent pet rescue center in The City.
          But before that, she spent her career building a beauty products company which resulted in her being named among the “top 50 women business owners” by Working Woman magazine; #1 on Los Angeles Business Journal’s list of women-owned businesses in LA for four consecutive years; and one of Entrepreneurial Woman’s eight most powerful business owners. She was also named 2003 “woman of the year” for California’s 42nd assembly district.
          Meehan was born in a Christian Science maternity facility in Beverly Hills, a short distance from what was then her parents’ house. Her accountant father had originally been lured to Hollywood by the Fox Film Corporation but the family eventually resettled in Burbank to be near his new, non-studio CPA business.
          “Burbank is where I met and became a lifelong friend of Debbie Reynolds,” she said. “Debbie actually wanted to be a gym teacher while my aspiration was to be an actress. Debbie certainly got the jump on me, signing on with MGM and becoming a major star with Singing In The Rain. Myself, I had to settle with playing a minor bit part as Dino’s Restaurant hat check girl on 77 Sunset Strip at Warner Brothers.
          The high school dropout had married and became a mother while still in her mid-teens. While attempting to get hired for TV commercials or acting jobs, she made ends meet as a gas station attendant and as secretary for Hydro Air and, later, for a doctor in the valley.
          “One thing I did treat myself to in those days was a regular hair appointment at the old House of Westmore on Sunset Blvd.,” stated Meehan. “Like every actress, I also had to spend many hours with studio makeup artists and hairdressers. After awhile, however, I started to have a severe allergic reaction to some of the chemicals being used in hairsprays. Nobody could tell me the answer as to why these were irritating to my scalp and skin.
          “I finally turned to a husband of a friend of mine, Jheri Redding, who owned a beauty salon in Van Nuys. More than strictly being a beautician, he was actually a frustrated chemist and knew all about the ingredients contained in the products being put on people’s hair. Remember, that was long before the FDA required any of these be listed individually.”
          She continued: “After painfully coming to the conclusion Hollywood wasn’t going to make me the next ‘Joan Crawford’, I wanted to control my own destiny. I received $3,000 from a Hamms’ Beer TV spot and decided to invest in the hair care business with Jheri. My primary motivation selfishly was not only to find natural and gentle products suitable for my own hair and skin since what I’d come across wasn’t doing the trick, but also be in a business that would help others.”
          In 1961, Redken Laboratories, Inc. became a reality—its monicker coming from a combination of “Red” for Redding and “Ken” for Kent. This forever changed the course of the hair care industry by its pioneering of a scientific approach to beauty including the actual listing of ingredients contained in each product—the first two of which being Amino Pon shampoo and PPT “S-77”, which were on the market four decades later.
          “We began to pioneer the teaching of the chemistry of hair to stylists so they would be better equipped to serve their clients’ needs. In effect, this served to elevate the art of hairdressing to a higher technical and professional standard,” explained Meehan.
          The Redken method was based upon three principles: (1) technology of protein of which hair is primarily composed; (2) an acidic pH which complements natural pH in hair and skin; and (3) that products will be personally recommended by licensed cosmetologists in professional salons.
          Meehan pointed out: “Throughout its history, Redken has only sold to salons. Therefore, we designed special training programs to inform their hairdressers about the merits of this emerging new science in regards to Redken products and how to successfully retail them to their own clientele, something totally unheard of at the time.”
          The new company’s revenues were $90,000 the first year and hit $350,000 the next. By the time Redding, who had begun teaching chemistry on a regular basis, retired from the business in 1966 sales had reached $1.5 million.
          Ever the marketer, Meehan enticed a star London stylist named Vidal Sassoon to come to California for some joint appearances with her at trade shows. Sassoon was a specialist in straight hair having created the “bob” look for British designer Mary Quant (inventor of the miniskirt and hot pants) and actress Jean Shrimpton. He was also about to popularize the “bob” internationally on Mia Farrow for her role in Rosemary’s Baby at Paramount.
          By 1970, though still a relatively small player in the overall worldwide industry, Redken was making a name for itself locally operating out of a 20,000-sq. ft. building in Van Nuys.
          “Harry Volk, who headed Union Bank, invited me to become a company director. There I was, obviously the token female on what had previously been strictly a men-only board composed of some of California’s biggest tycoons,” Meehan said. “It was really an invigorating experience and I learned a lot from these associations.
          “Since we needed capital for expansion to meet our escalating sales, in addition to bank borrowing, I decided to take the huge step of having an IPO (initial public offering) for Redken. The former Mitchum Jones & Templeton firm in downtown LA handled our 1971 offering and we raised $5 million. After that, Merrill Lynch became our primary underwriter.
          “It was a lucky time for me all around because I married John Meehan the same year. He was a highly successful advertising executive for a number of trade magazines, many of which were in the fashion and hair care industry so we were a natural.” (The Meehans were married 33 years until his passing early in 2004.)
          Infused with the necessary cash, Redken moved into a 250,000-sq. ft. headquarters, manufacturing plant and state-of-the-art research facility in Canoga Park.
          “One thing we never scrimped on was research. It was an on-going effort by a large staff,” stated Meehan. “I always felt even if it didn’t always result in new Redken products, it would expand our body of knowledge on the structure of hair and skin to the benefit of our industry and the scientific community. We developed and owned more than 80 patents.”
          The results of the company’s research have been published in a wide range of journals and used by physicians, dentists and even NASA.
           Redken continued to experience rapidly growing revenues via its own management in nine countries or through carefully-vetted representatives in 50 others encompassing major regions of the US, Canada and Mexico plus South America, Europe and Asia.
          The company maintained a significant in-house legal staff to ensure strict adherence to its code of selling only to salons. Occasionally, its products—which now included makeup, lipstick and a men’s line—would appear on the retail shelves of drugstores in violation of its stated-policy. These instances were immediately litigated in the company’s favor and the representatives fined or dismissed.
          Japan was the only country Meehan personally handled but admitted it was an uphill struggle to make any kind of profit there. “The Japanese have their own methods of doing business, which I could never figure out. Besides, I think they were uncomfortable having to deal with a woman.”
          “Like any company, Redken had its ups and downs but never once experienced a single losing year so we had a good reputation on Wall Street. By 1988 and sales of $120 million, I had enough of being a public entity and decided to take the company private once again.”
          As she explained: “We had a total of 2,400 shareholders but 400 of them owned but a single share. Most of these were competitors who—because of their stock ownership—were now privy to our quarterly and annual reports, in fact, all our financial information.
          “At my request, our chief financial officer, Tom McLoughlin, initiated a leveraged buy-out plan and engaged Merrill Lynch to complete this transaction. To make it happen, I personally guaranteed a $58 million loan from Security-Pacific National Bank to purchase back all our publicly-owned shares.”
          By 1993, she had completely paid off her bank debt as Redken sales hit $165 million with an astounding operating profit of $25 million.
          Throughout its then 32-year history, she had rejected several offers to sell the company from such as Revlon, Rayette-Faberge and Helene Curtis. After much soul searching, Meehan decided the right time was at hand to do so and a deal was struck with another long-time suitor, Cosmair, Inc., the US licensee of Parisian-based cosmetics giant, L’Oreal. The sale price would represent a 20 times annual return on investment in the half decade since going private.
          One of the selling stipulations was that L’Oreal agree to keep Redken’s headquarters in Canoga Park so none of her staff would be affected. Six months later in January 1994, however, catastrophe struck—the Northridge earthquake. The plant was virtually ruined and the company’s headquarters moved to Manhattan by its new owners, and remains a global force in hair care products and services.
          But now that Meehan wasn’t running the day-to-day operations (though still acting when called upon as Redken’s goodwill ambassador), what was she going to do with the rest of her life? In a word—plenty!
          “After you’ve spent well over a quarter century of your life working or thinking about one business 24/7, it’s a big adjustment,” she admitted.
          But this dynamic entrepreneur has hardly missed a breath. She bought and completely renovated the former George W. Elkins building to start a new investment firm, Kenquest. She has additional real estate holdings in Malibu and Sherman Oaks plus holdings in Colorado and Arizona.
          Her charter business includes ownership of a Gulfstream IV private jet and a 140-ft. luxury yacht.
          She started a new catalogue venture called Boutique Beverly Hills. “This hasn’t worked too well so far but I’ll revisit and tweak it later on.”
          Meanwhile, Meehan, being a pioneer hair care entrepreneur herself, has established the “Global Salon Business Awards” in association with UCLA’s Anderson School of Management and the latter’s Price Center for Entrepreneurial Studies to encourage skills and growth in the beauty shop industry.
          More than 3,200 hairdressing salons from 21 countries throughout the world were nominated, with 320 entrees selected to compete and 81 of them winning at the June finals held in London.
          “These awards pay tribute to salon and spa operators whose business acumen and notable accomplishments have had a lasting and positive impact on their local communities as well as their own bottom lines,” said Meehan. “This first program was so successful we’re planning another in Barcelona in 2006.”
          She plays a prominent role in various foundations: UCLA, B.E.S.T., Pet Care, California Community, and her own, P.K. Her directorships include the Saint John’s Health Center, LA Police Historical Society (from which she won the 2003 “Jack Webb Award”, LA Sheriffs Star Organization, and LA Opera and is on the advisory board of the LA Police Foundation.
          Her charitable philanthropy includes ChildHelp USA (winner of its 2003 “Angel Award”), Saint John’s Health Center, Actors & Others for Animals, and The Thalians (for which she underwrote November’s benefit gala for the group’s mental health center at Cedars-Sinai).
          Meehan’s work with a Beverly Hills advisory board has led to a five year effort for the establishment of a pet rescue center in the Beverly Hills area. “When our lost dogs and cats are picked up, they are shipped to Carson which is a terrible, overcrowded facility, 40 minutes away. Frankly, most of them don’t make it.
          “I hope to open a facility in The City or nearby community to take care of this problem but so far haven’t been able to find the available land.” She has already pledged $500,000 of her own money to this effort and secured pledges for an additional $1 million, all from private sources.
          When it comes to getting something off the ground and getting it done, don’t ever bet against Paula Kent Meehan. She will never take “no” for an answer and enjoys litigation, as she said, “just too much.

      
     
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