The transformation of James Murphy’s company from a distributor to a manufacturer began rather abruptly. In 2007, the supplement business was landed with a €15 million judgment against it.
“The product we were selling was not the product we thought. It was produced in China despite saying it was made in Denmark. We had to drop the product and lost 75 per cent of our business as a result,” Murphy says. The company faced a major crisis with a Danish supplier, and was left facing a multimillion euro judgment which its lawyers didn’t contest.
“We got the product tested and found it didn’t conform with the ingredients listed on the box. We were not insured for products manufactured outside the EU so had no choice but to stop selling it.”
Not one to give up easily, Murphy went to Denmark to fight the case, ultimately settling.
The Galway-based company has returned bigger than ever after making a bold move to take ownership and control of its key brands and move away from being a pure distributor.
"We had no choice but to try and buy the Viviscal business and went to Helsinki to do so. I joked we may be spending Christmas in Finland as there was no way I was leaving the country without the company. We got it on Christmas Eve and flew home late that evening."
Rebranded
Murphy qualified as an accountant in 1986 working briefly in Limerick, before heading to Brussels and then Luxembourg to work for Coopers & Lybrand. He came back to Ireland in 1991, taking a job with Bio Medical Research, where he helped build up the Slendertone brand worldwide.
In 1997, he founded Irish Response Limited to distribute health and beauty products, and in 2002 he paid €1.5 million for Pharmavita to break into the food supplements market in Britain. He rebranded as Lifes2Good the following year.
“When I bought Pharmavita, I noticed it had the distribution rights to Viviscal in the UK. I found it hard to believe the product worked only on men. We did some research and found 50 per cent of the people buying the product were women. We wondered if women were buying it for the men or if they were using it themselves.”
Through research, the company found out the women were buying the Viviscal hair supplement for themselves, and Murphy changed the direction of the business, deciding to focus on female hair loss. The brand got its first big break in Britain in 2004 when the Daily Mail did an article on it.
“Things took off and, in 2005, we got into Boots. Our turnover was €600,000 when we started off in 1997. In 2006, it was at €20 million and we were still just a distributor.”
After purchasing the Viviscal brand following the setback, the company relaunched in Ireland, Britain, Portugal and the US. It also began clinical trials in Dallas and Colorado Springs, which proved to be a success.
“If a product doesn’t work, you shouldn’t be selling it. You might do well in the short term but not in the long term. If it does work, get research to prove it. We learned this the hard way.”
The company began selling Viviscal in the US in 2009, at New York area Duane Reade stores. The following year, it announced an agreement to sell the product in 4,900 Rite Aid stores in the US and, by 2011, it was being stocked in CVS and Walgreens, bringing its listing in the US to 25,000 stores.
“We had to open an office in Chicago to cope with rapid expansion in the US. We also started manufacturing in the US, as it was proving too expensive to ship over from Ireland.
“It also took time to ship to the US so if there was a spike in PR and demand for the product suddenly increased, we couldn’t ship quick enough.”
The company now sells in Ireland, Britain, Canada, Spain, Portugal, Brazil, Mexico, the US and Australia.
“Less than 5 per cent of our business is the Irish market. In 2005, that figure was 45 per cent. I always wanted to build the business globally and not rely fully on Ireland as the domestic market is so small.”
As for the future, Murphy has ambitions for Viviscal to be a global brand. “We want to be associated with products with global appeal.”
With an annual turnover of €26 million, and product listings in 25 countries, it looks like Murphy is already on his way.
