It doesn't advertise.

Its packaging is mind-numbingly bland, cramming blocks of tiny text on white labels.

It shuns e-commerce.

Its only retail store, in Manhattan's East Village, is decorated with motorcycles and photographs of fighter planes.

Its employees get reprimanded for not giving away products.

Yet Kiehl's has developed a following that has other cosmetics companies beside themselves with envy. Winona Ryder and Sarah Jessica Parker swear by Kiehl's products. Exclusive stores like Bergdorf Goodman and Barney's sell them. The beautiful and fashionable from around the world converge on the Kiehl's store. Numerous big cosmetics companies have made offers to buy Kiehl's.

Kiehl's offers a stark lesson in the powerful cachet that can come from marching in the opposite direction of all the competition. "It sounds crazy, but it really is word of mouth," says Jami Morse Heidegger, who is known professionally as Jami Morse and who owns and runs Kiehl's with her husband, Klaus Heidegger, a former World Cup champion skier from Austria.

How does a tiny family business generate buzz? In Kiehl's case, it has helped to be located in New York, the center of the fashion and beauty media. Magazines from Vogue to Marie Claire routinely list Kiehl's products as among the best. It doesn't hurt that many beauty editors have patronised the Kiehl's East Village store. So have many of the city's celebrity hairdressers, who in turn mention the products to the magazines.

Kiehl's itself expends hardly any effort in soliciting the beauty media. "I personally have never received so much as a piece of mail from them," says Martha Nelson, managing editor of In Style magazine, which mentioned Kiehl's in more than 60 articles in the past two years.

Selectivity also helps: Kiehl's has refused what could be lucrative accounts because it doesn't want to saturate the market.

At the same time, Kiehl's rosewater facial freshener-toner, pineapple papaya facial scrub and other products tend to appear in cool places. Manhattan's trendy Soho Grand Hotel puts Kiehl's shampoo, conditioner and hand cream in guest rooms. "Those in the know seem to hold it in high regard," says Tony Fant, the Soho Grand's executive vice president.

Kiehl's is also obsessive about giving away vast amounts of samples to anyone who comes into the store, calls the company's 800 number or wanders by a Kiehl's counter in a department store - all in hopes of winning over a new customer. "It's a very smart way of doing it," says Philip Miller, chairman of Saks Fifth Avenue. He persuaded Kiehl's to establish its first department-store account in 1975 when he was president of Neiman Marcus.

Heidegger, who serves as the company's chief financial officer, estimates that Kiehl's gives away as much as $1.5 million annually in various samples and gift boxes. He and his wife feel so strongly about sampling that they will cancel an account if the department store's workers won't dispense samples with abandon.

"When we first go in, they think we're nuts - telling people, `Please don't make a sale, hand out samples.' They have quotas. They really don't want to not sell," Morse says. If someone writes the company to say she has shared Kiehl's samples with colleagues at work, Morse says, she will likely send her 50 more samples to share with more friends. "Touching a person - that's the best way to make a business grow," she says, adding, "Then you're convincing them. It's not just false hope or promises."

Kiehl's is still very small. Heidegger declines to discuss the private company's profit, but he says annual sales are about $40 million.

Growth has been between 20 per cent and 30 per cent a year for the past six years, Heidegger estimates. The owners say they want to keep their business small to preserve customer service. At the Kiehl's store, the staff is famous for spending a half-hour with one customer. While a long line waits, the employee grills customer after customer about skin and hair characteristics and then disgorges detailed information about the products.

Kiehl's accepts returns unconditionally - even if the product is almost entirely used. It coaches employees to talk customers out of making a purchase if it isn't right for their complexion. It routinely sends representatives incognito to department stores to make sure the store employees behind the Kiehl's counter are spending the time and attention - and giving away the generous samples - that Kiehl's requires.

Kiehl's recently canceled a 30-store account in Japan - it won't say which - because its customer-service guidelines weren't observed to the letter. "It cost us a lot of money," says Heidegger, "but we didn't look at it that way." A few years ago, it pulled its products from Saks Fifth Avenue in Beverly Hills for the same reason. A spokeswoman for the Beverly Hills store confirmed that it doesn't carry Kiehl's products but said she didn't know why that was the case.

Kiehl's, whose full name is Kiehl's Since 1851 Inc., began that year in a tiny storefront at Third Avenue and 13th Street in Manhattan, where it still sits today. John Kiehl founded the business as an apothecary selling such enticing remedies as baldness cures, virility creams and even something called Money Drawing Oil.

In 1921, Irving Morse, a young apprentice to Kiehl who had studied pharmacology at Columbia university, bought the store and turned it into a traditional pharmacy, keeping the Kiehl name. Three decades later, his son Aaron took it over, transformed it into a beauty-care business and gave it the quirks and character for which it is legendary.

Aaron, a charismatic and gregarious man, was known to approach strangers in the neighborhood and offer to dab cream on a blemish. He would slap astringent on customers in the store and paint his own face with lipstick to demonstrate the colors. (Lipstick is the only makeup Kiehl's sells.) No photographs of beautiful models with beautiful hair and skin for him, however.

A fighter pilot in World War II, he adorned his store with pictures of airplanes. Products were stashed in rows on shelves where they could fit.Aaron Morse ardently guarded the little company's small size and character, refusing to sell Kiehl's in big department stores, except for a few crown jewels, like the Neiman Marcus store in Beverly Hills. But in 1985, he asked his daughter, Jami, and son-in-law, Klaus, to come to New York to eventually take over the business.

The two were much more expansion-minded. "When I first started, I was very excited to grow," says Morse. At 38, she runs the business from the ranch in Southern California where she lives with her husband, their nine-year-old daughter and two-and-a-half year-old twins. Morse's father died in 1995.She started a mail-order system and opened new accounts abroad, which her father loudly opposed, complaining that she was ruining the company.

Now she has stopped adding new accounts and is thinking about scaling back."My husband teases me all the time," she says, adding, "He says the older I get, the more I become like my father."

(The Asian Wall Street Journal)