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Author: TMFSarahGen Big gold star, 5000 posts Top Favorite Fools Old School Fool Ticker Guide Supernova Odyssey 1
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Subject: BARE (annual meeting and more) Date: 5/16/2008 1:47 PM
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So the longer I put off updating my current thoughts on events, the more there are!

So this is brief, and I do hope to do a good analysis and updated pitch in my blog, but here are the things on my mind and some ramblings.

I did go to the annual meeting yesterday. I guess I was not expecting something as big as Berkshire Hathaway's Buffetapalooza weekend fest, but I thought it might be a big gathering of the Bare Escentuals faithful. Some presentations and free gifts at least, and who knows what surprises?

Well, no. lol. When I check into the hotel the night before I asked when/where the BARE meeting was scheduled and they told me 8am-11am in the California room. Hmmm 3 hours?

My only previous annual meeting experience was at Ruger where they served breakfast before, and lunch after - so I thought, I guess I'll stroll in around 8:30 or 9 and skip that breakfast stuff.

Luckily I changed my mind at the last minute and ran down the hall at 8:05 to check out what was happening.

Surprise! The meeting was done and over by 8:10. lol Just strictly business and not much at that. And while the floor was opened for Q&A, not one Question from all those navy-blue-suited characters (who I assume were all analysts).

Because I was so late, the only seats free were near the front and I ended up sitting next to and behind a couple directors who were just re-elected. I, of course, didn't realize I was sitting next to a director - I just knew I'd flown from Seattle to attend a meeting for 5 minutes. silly me lol. So I started the most logical conversation ever "wow, that was short!" And she said, "last year was even shorter."
"I thought there would be a lot of shareholders here."
"Yeah, I did too."
"Well, I am."
"You are?"
"You're not?"
"Well, I am, but I'm a director."
So there you are, the woman in the most beautiful suit I've ever seen was not a wealthy investor but on the board of directors. Maybe I should have taken the time to curl my hair.

I found myself a bit of curiousity because, "hey, she's a shareholder!" And because I have some strong opinions - all mostly along the lines of BARE's obvious market leadership, not so noticed by the financial community (in my opinion), the power of their brand, their strong moat, their invincibility in recession, etc. I think Ms. Ottinger (I looked her up here on the list of board of directors), got a kick out of my rap I keep telling my male investing friends here:
Women will downgrade from steak to chicken, chicken to ramen noodles. But they're not giving up their $30 mascara.
I think she got an extra chuckle when I expanded that standard rap of mine to:
Let's face it, you can give up your Knob Creek Manhattan and switch to bathtub gin, but you're just not going to mess with your face!

I got these opinions from listening to the last ULTA earnings conference call where they stated that women were not downgrading from prestige cosmetics. Women might make other cutbacks, but they were not going to drop BARE's $20 mascara for a $2 mascara from down-market brand Wet N Wild.

Ms. Ottinger (Lea Anne) insisted on introducing me to Leslie Blodgett the CEO with a "she's more than a shareholder, and she's got this great theory about vodka." lol. And then another director.

Leslie was just as friendly as she is on tv and in her personal appearances, but also busy. We chatted about BARE, the amazing job she's doing. I teased her about the fact that I DVR all her QVC appearances to watch closely for any secrets she might drop - she can't help it. She immediately knew what I meant when I said, "for example, two appearances ago someone called in suggesting the application could be easier something more similar to competitors' integrated brush/makeup and she said, "oh we're working on something!" shhh - it's a secret!

She urged me to come to BARE HQ just a couple blocks away and introduced me to the new CMO, Jim Taschetta. I guess I should stop calling him "new" because it was last October that he was appointed: http://ir.bareescentuals.com/releasedetail.cfm?ReleaseID=269...

I'm a huge fan of Mr. Taschetta's because his first presentation I heard, at the ICR XChange Conference in January was so persuasive. You could tell from listening that he was a serious new convert. His comments about BARE's brand recognition and brand loyalty being the strongest he'd seen in his career blew me away. With a career that has included Coke and Proctor & Gamble, that's saying something. And then he sketched out in simple terms their future growth path - the circles of sales/influence. BARE dominates foundation, but color is bigger than foundation, and skin care is even bigger than color. He announced at that time that BARE was much more seriously going after skin care. And within weeks we saw BARE's first skin cleanser and blemish therapy (which not only work, but are perfect to carry on the plane because they're all minerals, not liquid).

So I, of course, was thrilled to meet Mr. Taschetta (Jim). He walked me over to BARE and we chatted about my little role at the Fool, and about BARE. I did ask him for that powerpoint from the Conference in January as it's not on BARE's IR page and I don't think I saw it on sec.gov. He's checking into that for me.

Everyone I had met so far urgently needed to finish up their Board of Directors meeting which had started the day before, and was running half day yesterday. So I was set up with a couple others.

I met with Vicki Parotino, the National Events Director. Wow, another exec that is purely on fire. She's been with BARE (as most of the senior execs have) for these serious 10 years of growth. And since I've done sales and grown regions before, I totally got her pride and excitement as she talked about taking on and completely turning around California, and then other locations. She took those sleepy stores and turned them into the high volume high cash generation Bare Escentual boutiques that they are today. Wow.

And after awhile (I don't know the years), Leslie said, "Vicki, time for something new." And she took on the events challenge. And you know those events - the bus tours, Leslie's appearances - are what has helped give Leslie the rockstar status she now enjoys. She said that she still has a challenge persuading mall owners/managers that a visit from Leslie is going to be the big event that it is. The people camping overnight, the crowds, the cameras, etc. The best description of this mania is in Elle magazine from earlier this year (March? April? I have to track it down - fantastic article).

Just like everyone I met, Ms. Parotino is a real pro and really excited about BARE.

Things were a little crazy, and since it is a makeup company - they just had to offer me a makeover. :) (Which in Bare Escentuals land is called a "makeunder")

And then it was back to my hotel. So the 10minute meeting ended up being 2.5hours. I got to meet so many passionate execs, I saw a huge model of how all the new boutiques will look (much bigger, and more welcoming than the one I've been to in Bellevue - some are already out in the new model - I just haven't seen them), a reminder of how soon the new infomercial is out (it's either out already in the last couple days - or coming very soon - and remember the infomercials are what bring in the very best margins), a reminder that their big 10th anniversary with QVC is happening this week, and of course, I ended up with a bunch of free samples (all the latest baby buxoms). Oh, and a couple folks repeatedly told me how well things were going with Nordstrom's. Sounds like they're going to be expanding very quickly there. This has always been on the agenda, but I wonder if this means faster? or more income from those sales? hard to tell, but definitely great feedback and great excitement.

I tried to get Leslie to spill how the new infomercial was testing or performing, but she would only say how proud they were of it. They incorporated more of their signature "real people" mostly all footage from the bus tours / appearances.

I'm DVR'ing the latest QVC special. And I'll be DVR'ing the newest infomercial soon as I can.

On my to do list:
1. take a real look at the numbers, the only thing negative I could see in the last earnings was a moving of shipping kits from 2nd quarter to 3rd quarter.
2. write up a summary of my current take
3. write up a new pitch for my blog
4. watch those QVC and infomercial specials
5. find one of those new boutiques (ok, that's just for fun)

For anyone near Las Vegas, that's where the next event is.

Oh, and btw, how did the makeunder go? Well, let's just say when my husband picked me up at the Seattle airport and we headed out for dinner and a drink - I was carded for the first time in ages. Not bad for 39yrs and 11months. :)

Sarah
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