The retail cosmetics powerhouse lost money for its first four years and was on the verge of shutting down. Now it turns over more than $570 million.
Jo Horgan was in her late 20s when she decided she’d take on long-established global giants at their own game: selling cosmetics.
Fed-up with men telling women how they should buy make-up and skincare, the former L’Oréal executive decided to open her own store. She called it Mecca. It opened in South Yarra in 1997.
“We had our launch party, which felt fabulous. And then a few sort of well wishers bought a couple of things. And then silence,” Horgan tells The Australian Financial Review’s Female Founders podcast.
Within four years Horgan, and her husband Peter Wetenhall – at the time a Boston Consulting executive who’d put up his future salary as a guarantee against the debt fuelling Mecca’s early expansion – were given a stark warning from their accountant.
“He sat me and Pete down and said, ‘you know, some businesses just aren’t meant to be and maybe this is one of them’. We had lost money for four years, and we didn’t have money to lose.”More than 25 years later and Mecca is a retail powerhouse turning over more than $570 million, and its success landed Horgan and Wetenhall on the Financial Review Rich List.
It took plenty of hard work, and as Horgan tells the podcast, a bit of luck by being at the right place at the right time. But it also took perseverance.
“I think that it is a hard road for anyone to do their own business, and it’s very cold and lonely. That said, there is a J curve that can come from perseverance. Mecca in the last five years has grown more than it did in the first 20 years combined.”
Horgan’s mum ran a mail-order fashion start-up, while her father owned factories that made yarn and clothing for the likes of Marks & Spencer. It seems obvious she’d be an entrepreneur too. Except, she’d choose to study English literature.
“My parents instilled in me the belief that education was the most important doorway in your life. And that’s something I now believe. And they coupled that with ‘do something you absolutely love’. I just love English literature. I loved languages. That was super fascinating to me.”
Horgan says another component to their success has been operating as a private company.
“I think having a private business allows you to have one focus, and that is the customer,” she says.
“I think as soon as you become a publicly listed business, you have a responsibility to shareholders, of which there are usually many. And I think that takes up a lot of headspace and time. So, I treasure the autonomy of the business where we literally can do whatever we think is right.”
That meant when the pandemic hit, the business could pivot quickly.
“We still act like we are, to quote Hamilton, young, scrappy and hungry. We’re very entrepreneurial, we move fast and we do believe that everything is possible.”
Horgan has built her empire in lockstep with Wetenhall, who left Boston Consulting to join Mecca in 2005 as co-chief executive to help grow the business as they prepared to have a second child.
“I quote Sheryl Sandberg from Lean In. I recount her telling that she feels the single most important decision you can make if you want to be a successful operator – if you are to choose to have a partner, have a partner who lifts you up, who multiplies your power, not a partner who diminishes or deadens your drive or opportunity,” Horgan tells Female Founders.
“Pete was, from the outset, incredibly supportive to the point where he literally guaranteed the bank loan that got Mecca off the ground against his future salary. So, he was an indentured slave to the bank. If it had all gone pear-shaped, he would have been working to pay the bank back.”
She recognises she was lucky – not many women have a husband with a salary that can be put up as a surety and the freedom to make the mistakes without yet having children.
”I’m lucky enough that I found an amazing bank manager, who was willing to take an absolute risk on us and the idea, and put that against Pete’s future salary. Not many women have that luxury: before kids, before commitments, before any of those things.
‘Choose Sunshine Sally’
“Less than 3 per cent of VC funds go to women-owned or run businesses. So the amount of capital out there for women to start their own businesses is paltry.
“That’s one example of how we need to address this gender inequality to allow full workforce participation.”
“One of my first objectives at Mecca to that was to start a female-founded business where we got women together, and we showed that women could create a successful company collectively, and we could build each other up and create something really fantastic as a collective.“
Horgan is an optimist, choosing to believe they can persevere when the chips are down from the very outset.
She lost her first day’s takings, about $1600 (she’d find it later).
“Things really can be stacked against you. But as I have always said, I am a natural optimist. And rather than having a voice in my head that said, ’Oh, you are so stupid, how could you ever let that happen? How does this bode for the rest of this adventure that you’re on? This is such a bad omen.” I was like, oh, well, onwards and upwards. There’s always tomorrow and there’s 10 million brilliant things about this, and I’m not going to focus on that one thing.
“It was a choice. I remember thinking at that moment, there are two paths. I can go down here, the Debbie Downer, or the sort of Sunshine Sally. I am choosing Sunshine Sally.”
