July 11--Skin care brand H2O Plus plans to relocate its headquarters from Chicago to San Francisco and close its West Loop manufacturing plant to focus on freshening its image, the company announced Friday.
About 75 Chicago employees will be affected when the maker of marine-based skin treatments closes its 90,000-square-foot facility at 845 W. Madison St., where it has operated for 20 years.
The 26-year-old company is shifting its focus from manufacturing to the marketing and sales of its products. By relocating to the West Coast, it will gain greater access to key business markets in Asia, the company said.
"I think the brand has been extremely successful, but it also needs a bit of a makeover," said CEO Joy Chen, who took the helm of the company in February. She plans to transfer manufacturing to third-party companies in the U.S. and focus on launching a rebrand.
H2O Plus has been unprofitable for at least five years, Chen said. A series of ownership and leadership changes, lack of product innovation, increased competition in the natural skin care space and the closing of almost all of its branded stores have cost it business.
The company, which at its peak had more than 300 stores, she said, now has just two -- one on Michigan Avenue and one in Canada.
"That leads to diminishing awareness because people can't find the product or don't know where to find the product," Chen said. The company is evaluating what to do with the remaining stores and may beef up selling online.
H2O Plus had already planned to move out of the West Loop building after Chicago developer John Buck bought it last year, Chen said.
Chen came to H2O Plus from San Francisco-based Yes To, maker of natural skin care products like Yes To Carrots and Yes To Tomatoes. She has been credited with transforming Yes To from an unprofitable startup to a fast-growing brand through a rebranding and retail expansion.
"The difference (with H2O Plus) is that this was a core brand that has been around for many years," Chen said. "How do you possibly grow this business without losing your core consumer, your consumer base that's been so loyal to you."
The company will close its Chicago manufacturing plant and headquarters over the next six to 12 months, and some key employees will be offered the opportunity to transfer to San Francisco. A remote sales office in Chicago will remain.
H2O Plus is looking for 10,000 square feet of office space in San Francisco's Financial District and expects to begin operations by fall.
H2O Plus, founded in 1989, was acquired in 2011 by Japanese beauty care company Pola Orbis.
aelejalderuiz@tribpub.com
