In certain circles, Michelle Kluz is known as the “fixer CEO.”
“I love fixing brands that I love,” Kluz told Glossy. “I get bored when things are just coming along swimmingly.”
Currently at Stila Cosmetics in her fifth CEO role, Kluz led multi-year turnaround projects for fitness brands like Pure Barre and Tough Mudder Bootcamps; Kering-owned retailer Avenue; and fashion holding companies behind accessories and intimate brands like Lovisa and Diva. She got her start in academia as a Fulbright scholar, then in design, leadership and consulting roles at Sapient, Motorola and the Boston Consultancy Group.
“As a turnaround leader or executive, you have to have an appetite for decisions that a lot of other leaders might be uncomfortable making,” Kluz said. “Even more than a skill set, it’s about how somebody is built.”
Kluz joined Stila in August 2022 during a particularly challenging time for the brand.
Stila was launched in 1994 by celebrity and editorial makeup artist Jeanine Lobell. She was inspired by her time backstage at fashion week, including the need for longwear, multitasking products, and the line was an instant consumer hit. Lobell sold to Estée Lauder Companies in 1999 for an undisclosed amount and has since gone on to start Neen, a line of colorful cosmetics in eco-friendly packaging sold at Nordstrom, Blue Mercury and Cult Beauty.
Stila is still well known for the same offerings today: eyeliner, lip color, foundation and other color cosmetics. They sell DTC, on Amazon and across retailers like Ulta Beauty, Sephora, Revolve and Nordstrom, among others, although their selection and in-store presence has been reduced over the years.
ELC sold Stila to private equity firm Sun Capital in 2006, which sold it to another P.E. named Patriarch Partners three years later. After one of the funds backing Patriarch Partners dissolved, lawsuits began around 2021. The company was forced by U.S. courts to hand over Stila to its current owner, a consortium of financial institutions led by P.E. firm Bardin Hill Capital.
Known for her brand turnarounds, Kluz was approached by the fund’s managers to gut and rebuild the brand. “The timing was really predicated on the courts,” she said. “I was supposed to come in almost an entire year earlier than I did.”
“The thing I love about fixing brands is that you actually know what good looks like,” she said. “If you’re running a startup, you don’t know if 20% growth is good or 200% growth is good, but when you’re doing a fix, you know what good looks like, and you have a heritage to draw upon.”
Kluz was a superfan of Stila in the ‘90s and saw the potential for a comeback. “Stila was so cool,” she said. “I wanted to be a ‘Stila girl.’ I was a customer for years.”
Through the aughts, Kluz wondered why the brand had receded into the shadows of the color cosmetics market, slowly disappearing from stores and almost totally absent from social apps like TikTok and YouTube. Longtime customers discussed similar topics, questioning what exactly was going on behind the scenes at Stila, in Reddit groups like /makeupaddiction and /sephora.
Kluz came aboard in 2022 and began a deep data dig on its sales, consumer and reach. Ironically, Kluz discovered that most consumers first buy Stila the same way she did years ago: when trading up their eye makeup from mass to prestige. “Once they did trade up to Stila, our repeat purchase rate was really strong,” she said.
“The problem at Stila when I came aboard was [too much] focus on the other parts of the portfolio and not the subset that was driving sales,” she said. “You can’t reinvigorate a brand if your core isn’t working.”
A 24/7, always-on marketing strategy helped to revive its top sellers, like its Stay All Day franchise eyeliners and lipsticks. Kluz poured gasoline on the marketing of its top SKUs and oversaw the expansion of content onto social media platforms like TikTok, plus sales on TikTok Shop. Her team revamped all assets and imagery and brought back the line’s recognizable illustrations from the ‘90s by adding new body types and updating the style and colors. Advertising on TV streaming platforms like Amazon and Hulu came next.
“You want [the 80/20 rule]: A small set of your portfolio is really driving the majority of your sales, but you need the rest of the product portfolio to work, too,” Kluz said. “I’m really pleased that, in 2024, we ended up with our top 20 SKUs, which make up a very significant chunk of the business, strongly up over the year prior.”
According to market research company Circana, Stila was the No. 1 liquid eyeliner brand, based on sales, in 2024 and ranked as the 25th overall makeup brand, based on sales, in the same period.
To make budget for this push, Kluz cut new product development in half, from 90 new SKUs per year to 45, and consolidated Stila’s contract manufacturing roster to secure better margins. No brand should have more than 10 CMs, Kluz told Glossy.
Other extensive cuts included the product assortment: Kluz has slashed somewhere between 50 and 100 products to now sell around 200 SKUs across the brand. This fall, an additional selection will be slashed to make room for a new fall eye makeup release. Making cuts isn’t only about sales, however.
“When you look at an assortment and you make assortment changes based wholly on sales, you do the brand a disservice,” she said. “What you end up with is a sea of beige, quite literally. … But sometimes you need the hot pink sweater to sell the black one.”
She then expanded lines that made sense, including its hero Stay All Day franchise.
But perhaps the most important move was adding regular town halls and a weekly email to staff and being available to anyone in the company, all to make sure the team’s mission is concise and clear. “I’m a broken record,” she said. “Everyone says, ‘Yes, Michelle, we know!’”
Her mission includes three main points: Maintain the No. 1 liquid eyeliner spot, which she calls “sacred”; maintain a strict focus on the brand’s top categories of eye and lip; and grow to reach the No. 3 space in eyeliner overall.
Revamping the team was also crucial for Kluz: Nearly every exec was let go when she joined, except for the existing CTO and head of retail.
“That was probably one of the biggest things I needed to tackle when I came in: building a culture,” she said. “We needed a mindset of creativity, and, ‘We’re in it together’, and, ‘Everybody is important to this.’ And so, when I hire people, I hire based on cultural fit first.”
Building a well-aligned team is perhaps the most elusive part of business, she said. “It’s hard to get that kind of magic in a team.”
It’s also taken time. Kluz only appointed a new CFO and COO this past week with the announcement of Steve Rosen as CFO and David Reece as COO. Rosen’s CV includes ZO Skin Health and ELC, while Reece’s background includes Ritual, Herbalife and Beautycounter.
So far, it’s been a success story: The Stay All Day Smudge & Set Waterproof Gel Eye Liner that Kluz launched on the back of data in August 2024 quickly shot to the No. 13 best-selling prestige eyeliner during the fourth quarter of 2024, according to Circana market research. Sephora, which sells Stila online and in its minis section, is also adding three SKUs to its selection this quarter for the first time in years.
Kluz has also focused on international distribution, focusing on markets that love eyeliner, like India and the Middle East. Stila has expanded to more than four retailers in these markets thus far.
Still, the brand has a long way to go to accomplish Kluz’s goals. According to alternative data provider Yipit, Stila Cosmetics saw a 2% sales dip at Sephora in 2024 and a steeper 8% drop at Ulta Beauty the same year, mainly due to weaker lipstick and eyeshadow sales. However, Stila’s eyeliner sales at Ulta grew 5% year-over-year with the brand now holding approximately 6.5% share of the category.
As for when it’s time to move on, Kluz told Glossy she’s right in the middle of the turnaround at the 3-year mark of her tenure, with big things on the horizon.
“We’ve been watering the plants, and I’m excited to say we have a lot of green shoots [of growth], but until we have a big, blossoming tree, I’m going nowhere,” Kluz told Glossy. “I don’t anticipate I’ll be going anywhere until I feel like the business is starting to come along. At that point, I will go and fix another business.”
