March 28, 2011
Sometimes beauty is just business.
Helena Rubinstein was born in 1872 in Krakow's Jewish ghetto, the eldest of eight daughters of a kerosene dealer. By her late teens, she had abandoned Poland for Australia, where she began cooking up vats of face cream. She called it Valaze, and claimed that it was the creation of an eminent European skin specialist named Dr. Lykuski and had been "compounded from rare herbs which only grow in the Carpathian mountains." She rented a storefront in downtown Melbourne, and peddled her concoction at a staggering markup.
In just over a decade, she had become a millionaire. She expanded to London, then to Paris, then to New York—and from there to almost every other major city in the world. She added one product after another, until Helena Rubinstein Inc. comprised sixty-two creams; seventy-eight powders; forty-six perfumes, colognes, and eaux de toilette; sixty-nine lotions; and a hundred and fifteen lipsticks, plus soaps, rouges, and eyeshadows. In December of 1928, she sold her business to Lehman Brothers for the equivalent of eighty-four million dollars in today's money—and, when Lehman's mismanagement and the Depression brought the stock price down from sixty dollars to three dollars, she bought her firm back for a pittance and took it to even greater success. She was four feet ten and spoke an odd combination of Polish, Yiddish, French, and English. She insisted on being referred to as Madame. At the time of her death, in 1965, she was one of the richest women in the world.
The biographer Ruth Brandon spends the first part of "Ugly Beauty" (Harper; $26.99) describing Rubinstein's rise, and the picture she paints of her subject is extraordinary. Rubinstein bought art by the truckload; a critic once said that she had "unimportant paintings by every important painter of the nineteenth and twentieth centuries." In just one room in her Park Avenue triplex, she had seven Renoirs hung above a fireplace. Her legendary collection of jewels was kept in a filing cabinet, sorted alphabetically: "A" for amethysts, "B" for beryls, "D" for diamonds. "Rubinstein's New York living room, like everything else about her, was tasteless but full of gusto," Brandon writes. "It sported an acid-green carpet designed by Miró, twenty Victorian carved chairs covered in purple and magenta velvets, Chinese pearl-inlaid coffee tables, gold Turkish floor lamps, life-sized Easter Island sculptures, six-foot-tall blue opaline vases, African masks around the fireplace, and paintings covering every inch of wall space." She once invited Edith Sitwell over for lunch and, upon hearing that Sitwell's ancestors had burned Joan of Arc at the stake, exclaimed, "Somebody had to do it!" In the nineteen-fifties, she took as a companion a young man half a century her junior, wooing him on a date that began with an enormous lunch ("I need to keep up my energy!") and a showing of "Ben-Hur" ("Most interesting! I'm glad the Jewish boy won!"). From then on, Rubinstein took the young man everywhere, even to a state dinner with the Israeli Prime Minister David Ben-Gurion, who asked her, "Who's your goy?" Rubinstein replied, "That's Patrick! And . . . and, yes, he is my goy."
In the second part of "Ugly Beauty," Brandon tells a parallel story, about one of Rubinstein's contemporaries, a man named Eugène Schueller. He was born nine years after Rubinstein, in Paris. His parents ran a small pâtisserie on the Rue du Cherche-Midi in Montparnasse. He was an only child—his four brothers died in infancy—and his parents sacrificed to send him to a private school, subsidizing his tuition in cakes. After a successful academic career, he ended up teaching chemistry at the Sorbonne. But the leisurely pace of academic life bored him. "He would climb in and out though the window before and after hours, sometimes starting work at six a.m., sometimes staying on late into the evening—hours his colleagues inexplicably preferred to spend with their friends and family," Brandon writes. One day, a hairdresser approached him, looking for an improvement over the unreliable dyes then in use. Schueller quit his job, and converted his apartment into a laboratory. By 1907, he had perfected his formula, and began selling it to local hairdressers. In 1909, he recorded his first profit. By the nineteen-thirties, he was one of the wealthiest industrialists in France, and had moved his headquarters to a stately building on the Rue Royale. He would rise at 4 A.M., attend to company business for two hours, take an hour's walk, and then later be driven, by Rolls-Royce, to each of his various chemical plants, ending his day at midnight. He called his company L'Oréal.
Brandon's aim in relating the histories of these two pioneers of the beauty business is to tease out their many connections and parallels—to explore what the development of cosmetics at L'Oréal and at Helena Rubinstein tells us about the social constructions of beauty. The juxtaposition of Rubinstein and Schueller, though, is most interesting as a kind of natural experiment in entrepreneurial style. After all, here were two people, born into the same class and era and charged with the same passion: making cosmetics respectable. Yet they could scarcely have been more different. Rubinstein was selling an illusion—the promise of eternal youth. What Schueller sold was real. "In the beauty industry, whose claims routinely bore little if any relation to reality, his product was unique in that both he and his customers knew it would always do precisely what the package promised," Brandon writes. "L'Oréal worked: it would dye your hair any color you wished—and safely. . . . The foundation of her business was folk wisdom; Schueller's business rested on science."
Brandon calls Rubinstein's career "chaotic, a progression of brilliantly executed extempore sallies." She was a yeller and a worrier. She lurched from crisis to crisis. She peopled her sprawling empire with every relative she could get her hands on. "The essence of Madame was that business and emotion were not separable," Brandon says, and she goes on:
She ran on adrenaline: her chaotic, compulsive letters to [her friend] Rosa Hollay, in which the worry of the moment was scribbled down whenever it might occur on whatever scrap of paper lay to hand, reveal the constant, jumbled panic beneath her assured exterior: "I haven't paid any bills the last three weeks, let me know again what must and should be paid now. I am frightfully short of money, it seems worse and worse. . . . I often don't know if I am on my feet or my head."
Schueller, by contrast, was the picture of reason and calculation. If he worried, he left no trace of it. He methodically applied the same principles and scientific techniques to one business after another, until he had expanded into soap and paint and photographic film and plastics. He hired professional managers and left behind a company that today is a colossus. Rubinstein was the nineteenth-century entrepreneur; her style was personal and idiosyncratic. Schueller was the modern entrepreneur. The business builders we venerate today, who bring technical innovation and discipline to primitive marketplaces, are cut in his image. Schueller is Steve Jobs. He is Mark Zuckerberg. And there the story of Schueller and Rubinstein would end, were it not for the small matter of the Second World War.
One of the leaders of the far right in France, in the tumultuous years leading up to the Second World War, was Eugène Deloncle, whom Brandon describes as a "clever and charismatic naval engineer whose hypnotic personal charm nullified his somewhat absurd appearance—short, plump, invariably bowler-hatted." Deloncle ran what was essentially a terrorist group called La Cagoule, which conducted political assassinations, fired on a socialist demonstration, and set off two bombs near the Arc de Triomphe. He had a personal hit man, named Jean Filliol, who at one point tried to kill the French Prime Minister. After the German invasion of France in 1940, Deloncle formed a political party called the Mouvement Social Révolutionnaire, or M.S.R., which in Occupied France was one of the loudest voices favoring collaboration with the Nazis. Deloncle's men marched through Paris in jackboots and tunics, cataloguing Jewish property for expropriation. In October of 1941, the M.S.R. blew up seven Paris synagogues with explosives provided by the Gestapo. Deloncle was a gangster, a thug, and a vicious anti-Semite, and Eugène Schueller was one of his biggest backers. Schueller wrote for Deloncle's newspaper. He gave him money. He even set the M.S.R. up in an office next to his own at L'Oréal's headquarters.
Brandon argues that Schueller's affection for the M.S.R. wasn't primarily ideological. He wasn't pro-German. He wasn't a Nazi. There is no evidence that he was particularly anti-Semitic. Many of Deloncle's followers were essentially right-wing royalists, pining for the long-lost Catholic monarchy. Schueller was the kid from the Rue du Cherche-Midi. He believed in a meritocracy.
Schueller's behavior stemmed from pragmatism. He was a businessman, and collaborating with the Germans was to him the correct business decision. "The war years were very profitable for those who could keep manufacturing—anything that could be made could be sold, the occupiers would pay any price for luxuries, and there was a flourishing black market in scarce necessities," Brandon writes. "But only collaboration ensured access to raw materials."
The minute Schueller sensed the tide of the war turning, he coolly changed course. In late 1941, he began to cut his ties to the M.S.R. and Deloncle. By the end of 1942, with America now in the war and Hitler overextended in Russia, Schueller began cozying up to the Resistance. He let a L'Oréal van be used for a covert mail drop. He donated seven hundred thousand francs to the Maquis, and two million francs to de Gaulle, in exile in England. He started working with a group that eventually helped two hundred people escape the Nazis. After the war was over, Schueller—along with a number of other French industrialists—was charged with collaboration. A contemporary, the automaker Louis Renault, ended his life in disgrace, and his business was taken over by the government. Not Schueller. The Resistance legend Pierre de Bénouville stood up and vouched for him. In the postwar years, the good word of a war hero was everything. Schueller was acquitted.
The details of just how Schueller managed to wriggle out of legal trouble are sordid. Bénouville turns out to have barely known Schueller. He was, it seems, doing a favor for three friends: François Dalle, who ran L'Oréal after Schueller's death; André Bettencourt, who married Schueller's daughter and became one of the richest men in the world; and François Mitterrand, who worked for L'Oréal in the last days of the war and ended up as the President of France. But there is no denying the cynical brilliance of Schueller's strategy. As they would say on Wall Street, he hedged the war to perfection. When the market turned in 1942, he shorted Germany and went long on France, and the awkward fact about Schueller's behavior is that this ability to deal with unexpected obstacles is what we normally celebrate in entrepreneurs. The entrepreneur is someone obsessed with his creation, who applies the full force of his intellect to protect and sustain it. That's why Alexander Graham Bell didn't give up on the telephone, and why Hewlett and Packard kept plugging away in their garage in Silicon Valley. We like this about them. Here is Brandon describing what happened to Schueller when he first embarked on his hair-dye project. Having quit his job, and with just eight hundred francs to his name, he surrendered to the compulsion of invention:
The two-room apartment on rue d'Alger cost 400 francs a year, which since he had also to eat and buy materials gave him a little less than two years. The dining room became his office, the bedroom his lab. He lived alone, cooked for himself, and slept in a little camp bed until it was crowded out by laboratory equipment. . . . "When I think back to those days, I can't imagine how I got through them," he reflected forty years later.
So why should we be surprised that Schueller would cross a moral line in the service of that same obsession? Schueller's daughter, Liliane Bettencourt, later tried to excuse her father's wartime behavior by saying that he was a "pathological optimist who hadn't the first idea about politics, and who always managed to be in the wrong place." Brandon is skeptical of that explanation. But it is not entirely wrong. The kind of people who retreat to their two-room apartments or cluttered garages and emerge, two years later, with a better mousetrap are pathological optimists, and seldom have the first idea about politics. Schueller wasn't for France; he wasn't for Germany. Schueller was for Schueller. An engineer who worked at L'Oréal said it best: "I think M. Schueller is too much of an opportunist to risk engaging himself absolutely in favor of anyone."
One of the classic stories in the entrepreneurial canon involves the founder of Ikea, Ingvar Kamprad. In the early days of the company, other Swedish furniture manufacturers had been boycotting Kamprad, protesting what they considered his predatory pricing. His business was in a crisis: he could fill only a fraction of his orders. So Kamprad went to Poland, where manufacturing costs were half those in Sweden. There he struck a series of deals that eventually established Ikea as Europe's premier low-cost furniture company, and vaulted it from obscurity into one of the biggest retailers in the world. Here is the entrepreneur at work: brilliantly resolving an obstacle to his own advantage. But the official Ikea history hardly considers the implications of when Kamprad made that trip to Poland. It was 1961. The Berlin Wall was about to go up. The Cold War was at its peak. Poland, like the other Soviet-bloc countries, was in the grips of a repressive regime. "Their visit lasted a week and can still be tracked almost step by step by step in the documents the Polish secret police drew up," the journalist Bertil Torekull breezily writes, in the corporate biography he crafted with Ingvar Kamprad. And how did Kamprad set up shop? "At first we did a bit of advance smuggling," Kamprad recounts to Torekull. "Illegally, we took tools such as files, spare parts for machines, and even carbon paper for ancient typewriters. . . . We bought nose and mouth protectors when we saw the dreadful environment, and we took a whole lot of secondhand machines from a firm in Jönköping [in Sweden] and installed them in Poland instead." Because the Ikea history was written in 1998—long after the fall of Communism, when Poland had become a healthy democracy and the unpleasantness of the Soviet bloc had begun to recede into history, Kamprad's trip to Poland has been treated as a kind of heroic pilgrimage. But what Kamprad did in 1961—cozy up to a police state, break the law—is not radically different from what Schueller did in 1940. Kamprad didn't get too worked up about the moral consequences of collaborating with the Soviet bloc because he wasn't interested in moral consequences. He was an entrepreneur trying to save his business. He was too much of an opportunist to risk engaging himself absolutely in favor of anyone. Kamprad was for Kamprad.
Compare the Holocaust hero Oskar Schindler. Schindler was an entrepreneur as well. He came to Krakow, at the outset of the war, and realized that through the Nazis' Aryanization program he could pick up a fully functioning Jewish-owned enamelware factory for next to nothing—essentially for promising to keep the factory's former owners employed. He landed a lucrative war-supply contract. At Emalia, as the factory was known, he began to produce munitions, which gave his factory and his Jewish workforce an "essential to the war effort" designation. In the first five years of the war, he made a huge amount of money. But when the Germans decided to shut down Schindler's operation in Krakow—and ship his workers to the gas chambers—Schindler did an about-face. He persuaded the Germans to let him move his employees and machinery to Brünnlitz, in Czechoslovakia. Here is the business professor Ray Jones, in his article "The Economic Puzzle of Oskar Schindler":
Schindler used the money he had made [in Krakow] . . . to pay bribes to acquire permission for the factory, to convert the factory into an armaments factory and subcamp, to transport his workers to the factory, to pay the SS for the prisoners' labor, to purchase food for them on the black market, to acquire additional laborers, and to pay the necessary bribes to keep the Brunnlitz factory open. By the end of the war he had literally spent all of the money that he had made at Emalia, his entire personal fortune.
Schindler is the rare businessman who resolves the ethical conflicts of wartime capitalism in a way that we today find satisfactory. But he does so by violating every precept of good entrepreneurship—by jeopardizing his company and his investment and all his personal wealth for the welfare of his employees. Schindler's moment of moral greatness was his recognition that the Nazi threat demanded more of him than that he be a good businessman. So at Brünnlitz he kept countless people on the payroll who contributed little or nothing. He dragged his feet in getting the factory started, claiming—implausibly—that he was having startup difficulties. He sabotaged his machinery so that the shells he made for the German Army would be useless. He deliberately placed his company in peril. By 1944, Jones concludes, Schindler "had no serious industrial intentions." Virtually every business venture he tried, during the rest of his life, ended in failure, which makes perfect sense. The war had cured him of his entrepreneurial obsession. Schindler was no longer for Schindler.
One morning in May of 1964, thieves broke into Helena Rubinstein's Park Avenue apartment. They posed as deliverymen, carrying roses, and tied up her butler at gunpoint. But when they surprised her, in her bedroom, she defied them. The keys to her safe were in her purse, and her purse was buried beneath a mound of papers on her bed. "Madame silently extracted the keys and with characteristic presence of mind dropped them in the one place she could be sure no one would ever look: down her ample bosom," Brandon writes. "By the time the thieves noticed the purse, it contained only some handfuls of paper, a powder compact, five twenty-dollar bills, and a pair of diamond earrings worth around forty thousand dollars. The earrings rolled away as they upended it, and Madame covered them with a Kleenex."
The thieves tied Rubinstein to a chair with strips of her sheets and fled with the hundred dollars. When she was freed by her butler, she told him to put the roses in the icebox, in case they had company that day. Brandon says that she calculated that the thieves, "after paying $40 for the roses . . . had made just $60 profit on their morning."
Rubinstein was ninety-one at the time, and still in full command of her business. She soon set off to Paris, Tangier, and Normandy—and then returned home to New York, where she died, following a stroke. "The Park Avenue triplex was rented, in a move that would surely have appalled her, to Charles Revson of Revlon, an upstart whose name she had always refused to utter, referring to him only as 'the nail man,' " Brandon writes. Her extraordinary collection of art, real estate, haute couture, and jewelry was dispersed, and the business she had spent the better part of a century building was eventually put on the block, passing from one owner to the next until finally, in the nineteen-eighties, it was acquired for a pittance by L'Oréal's U.S. affiliate Cosmair, whose chairman, Jacques Corrèze, was the former chief lieutenant to that Jew-hating Fascist Eugène Deloncle.
This is the moment at which the two strands of Brandon's story come together, and the natural experiment in competing entrepreneurial styles is resolved. Schueller's side won. The twentieth century triumphed over the nineteenth, and Brandon understandably makes much of the final transaction. Corrèze had called himself a "colonel" in the M.S.R.'s uniformed brigade and had been one of those marching through the streets of Paris in jackboots, itemizing Jewish property for the Nazi expropriators. When he first came to New York for Cosmair, in the nineteen-fifties, he had immediately sought out Rubinstein. He had wanted to buy her company from the moment she died. He participated in secret negotiations with the Arab League, to figure out how to "scrub" the Rubinstein properties of their Jewishness so that L'Oréal would not fall under the Arab boycott. In a television interview in 1991, he was asked, "Do you feel you were a real anti-Semite?" To which he snapped, "I don't know if I was, but I'm about to become one." Brandon has no doubt that L'Oréal's acquisition of Helena Rubinstein Inc. was personal:
Given his past, and his defiant arrogance, it is hard to believe that Helena Rubinstein's Jewishness played no part in Corrèze's absolute determination to acquire her business. He never showed any interest in the very comparable Elizabeth Arden, who was an equally powerful player, who died only a year after Madame, and whose business went downhill in much the same way as Helena Rubinstein's. On the contrary, it seems in character that, having arrived in New York and sized up the situation, he should have decided to resume the old game he had so enjoyed in Paris—Colonel Corrèze redivivus, minus only the high boots and cross-belts. Everything he did points to his enjoyment of this underlying drama, his pleasure doubtless enhanced by the fact that only he was aware of it.
The other possibility, of course, is that it wasn't personal at all. The uncomfortable lesson of the triumph of Eugène Schueller over Helena Rubinstein is that sometimes it's just business.