Dillard's melts for Denver-based Melt

Department store to host bath-product boutiques

By Joyzelle Davis, Rocky Mountain News (Contact)

Tuesday, July 22, 2008

The Rocky / 2007

Steve McNally, co-founder of Melt, at the Cherry Creek mall.

Melt is about to drop a fizzy bath bomb on Dillard's.

Denver-based Melt, which has sold its trademark "handmade in Colorado" soaps and bath products since 2001, signed an agreement to open boutiques within Dillard's department stores. The first 500-square-foot-store will open in Metairie, La., in October, with more to follow nationwide, said Steve McNally, co-founder of the company.

Melt, which currently has three stores in Colorado including Cherry Creek Shopping Center and FlatIron Crossing, also has other expansion efforts in the works. The company plans to open its first downtown store next week, in the Market Center building at Market and 17th streets, and is scouting a location in Boulder, McNally said. Melt expects to open its first franchised locations in Washington, D.C., by the end of the year.

"Our business seems to do the opposite of the rest of the world," he said. "When the economy is down, people seem to eat up skin care. They want a small luxury."

The closely held company doesn't release financial information, but McNally said that same-store monthly sales have been up by double digits this year. Melt's prices range from $5.50 for bath balls to $22.50 for body scrubs.

The expansion is the latest for Melt, which McNally co-founded after quitting his longtime job as a purser for United Airlines. He mortgaged his Congress Park home to get the business off the ground, and last year brought in an outside management team to help the company's expansion.

McNally expects the company will open in anywhere from three to 10 Dillard's stores a year if the boutique store concept goes well. Dillard's, which has some 330 stores nationwide, didn't return a call for comment.

Macy's has had a similar alliance with Britain's Lush Fresh Handmade Cosmetics since 2006, and earlier this year announced plans to expand to another two stores this year.

The company recently revamped its product labels to play up its Colorado heritage, and plans to design its Dillard's and other future stores with an "Aspen chic" aesthetic, as McNally calls it.

"Colorado has such a mystique, an air of natural and clean living with the snowy peaks and mountain streams," he said. "Consumers really respond to that."

In his own words Steve McNally, co-founder of Melt, on how he came up with the idea for a Colorado line of handmade soaps and bath products.

* "I was inspired to create a line of products that spoke well to the dry climate that we live in while also offering a luxurious but affordable experience. I also felt at the time that there was a hole in the market with regard to a natural product line that was available to the masses - not something you'd have to go to a day spa and spend a fortune on.

* "Over a bottle of wine, we discussed how we could get products into our stores. When we first started, we bought everything third party on the Web, just to get the stores open and stocked. Then we started working directly with the product laboratories, which allowed us to take over production to the point where we are today. It's totally our own line, and it helped reduce costs dramatically."