Huntington Smells Something Good In Crescent House

Finding the right perfume just got a whole lot easier with Huntington Capital's latest investment.

Crescent House Publishing Inc. is a small Carlsbad, Calif., company that makes touch-screen scent selectors in stores that give product suggestions based on interactive questioning. Huntington Capital took a liking to CHP after seeing its success with retailers, and the firm made a mezzanine investment of less than $2 million in the company, said Managing Director Morgan Miller.

The technology, which uses software developed by CHP called Scentsa and ScentsaBeauty, is used in Sephora, JCPenney and DFS Galleria stores, as well as some Barnes & Noble College Bookstores. The screen presents the customer a series of six questions, mostly about the target consumer's personality and preferences, and then it offers a few product ideas.

"It's a marriage of technology and content," said Miller, who will often bring home a fragrance for his wife after returning from a trip, although he confesses he always ends up getting Chanel No. 5. "It's safest and she loves it."

The company, which is still expanding, has annual revenue of less than $5 million. It was founded by Jan Moran, a beauty expert who co-runs the business. Co-Chief Executive Steven Fish handles the technology side of the company.

"Jan must have some other kind of olfactory sensory ability or something, because she can really distinguish the subtleties of fragrances," Miller said. "What really convinced me, though, was their ability to execute and scale. They have a very well thought out and simple model."

Founded in 1992, CHP is looking to do pilot programs with larger retailers, although Huntington wouldn't disclose which companies. The technology may also be good for wine selection, which is a category the company is entertaining as a possible growth strategy as well. The technology has increased total sales by 15% in some retailers, Miller said.

Huntington invested from their second fund, Huntington Capital Fund II LP, which closed on $78 million late last year.

The San Diego firm also has teamed up with Central Valley Fund, a private investment fund focused on midmarket companies in the Central Valley area, an $8.5 million mezzanine investment in Anabi Oil Corp., an operator of Shell-branded gas stations in Northern and Southern California. The firms each committed $4.25 million.

Under the deal Anabi is expanding its revenue base by gaining rights to distribute gasoline to at least 80 stations. It also is getting into the wholesale end of the business, delivering gas to stations throughout California.