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Coty: Despite ‘challenging’ fiscal 2014, signs of nail segment turnaround emerge

BY Antoinette Alexander

NEW YORK — Beauty company Coty Inc. had a “challenging year” in fiscal 2014 as net revenues declined because of pressure on its nail business and fierce competition from rivals. However, the company is starting to see the first sign of a turnaround in its nail business thanks to the new Sally Hansen Miracle Gel.

“Fiscal 2014 was a challenging year for Coty. We reported a marginal decline both on top-line and bottom-line. Our net revenues decreased 1.6%, and our adjusted net income decreased 2.2%,” Michele Scannavini, CEO of Coty, told analysts. “The revenue decline was mainly due to the pressure we had on our nail business, particularly in the United States, which more than offset the growth we had in the fragrance and skin care segments.”

Net revenues for fiscal 2014 totaled $4.6 billion, a decrease of 1.6% like-for-like and 2.1% as reported from the prior-year. Adjusted net income was $316.2 million, a decrease from $323.2 million in the prior year. Adjusted earnings per diluted share decreased to 81 cents from 82 cents in the prior year.

According to the company, the U.S. market — which accounts for close to 30% of its business — experienced a 1.5% decrease in total fragrance for the year driven by a decline in the mass channel.

The U.S. color cosmetic market in mass was flat during the year and decreased 2% during the fourth quarter. Hampering the segment was nail, which recorded a 7% decline for the year and a 13% decline during the fourth quarter. However, there is sign of a turnaround.

“We are particularly excited to see the first sign of a turnaround in our nail business in the beginning of this fiscal year, driven by the launch of the new Sally Hansen Miracle Gel. First sales results are outstanding,” Scannavini told analysts. “According to IRI retail panel, in the four weeks ending Aug. 11, Sally Hansen hit its highest market share in the last two years.”

The company also noted that Rimmel London was the fastest-growing color brand among the top 10 in mass in fiscal year 2014. New launches under the Rimmel brand include a new mascara called Wonderful.
 

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Traditional Medicinals partners with RealCup on single-serve offering

BY Michael Johnsen

MISSISSAUGUA, Ontario — Traditional Medicinals herbal supplement wellness teas have chosen to partner with the RealCup brand for their launch into the fast-growing single-serve capsule format, the company announced last week. Mother Parkers Tea & Coffee, the company that owns and manufactures the RealCup brand, announced that it will produce two popular varieties of Traditional Medicinals teas in their patented RealCup capsule.
 
"We chose to launch our products in the RealCup brand of capsules because their unique FlavorMax filter delivers the high quality brewing required to help ensure our teas deliver their intended effect," stated Blair Kellison, Traditional Medicinals CEO. 
 
"The non-woven filter in the RealCup brand of capsules is different than anything that the competition offers," said Bill VandenBygaart, VP business development, Mother Parkers Tea & Coffee. "It allows more of the active constituents into the cup, ensuring authentic taste and, in the case of Traditional Medicinals, efficacy and functionality of their wellness herbal supplement tea blends."
 
Traditional Medicinals will make the new capsule format available in selected U.S. retail outlets across its Ginger Aid and Roasted Dandelion Root lines. Ginger Aid can help with occasional indigestion and nausea associated with motion, while Roasted Dandelion Root gently stimulates the liver and can support healthy digestion.
 
RealCup capsules are designed for use with K-Cup compatible single-serve brewers. 
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CCA Industries sells Mega-T weight-loss brand

BY Michael Johnsen

EAST RUTHERFORD, N.J. — CCA Industries last week announced that it has sold its weight-loss business, marketed under the Mega-T brand, to a group formed by Casla Partners Capital Fund I.
 
"The sale of the Mega-T brand represents an important step in strengthening our company's future performance by enabling us to focus resources behind our five core brands: Bikini Zone, Nutra Nail Treatments, Plus White, Scar Zone and Sudden Change," stated Richard Kornhauser, CCA CEO and president. "This transaction also relieves the company of a significant financial liability and allows the company to better support its brand advertising program to deliver new sales and profits. We believe that Mega-T is in the hands of capable and experienced weight-loss category managers, and we wish them the very best in their future endeavors." 
 
"Casla is excited to add the Mega-T brand to its growing portfolio of investments, an acquisition that builds on the firm's demonstrated core competency of acquiring, integrating and growing high equity businesses," said Jared Rochwerg, a partner of Casla. "Mega-T possesses strong brand equity and consumer awareness, while the efficacy of its products contribute to a healthy and active lifestyle. With the firm's proven operational and marketing expertise in the space, Casla is the optimal partner to support Mega-T in realizing its growth potential." 
 
Under the terms of the sale, the purchaser received all inventory, trademarks and other intellectual property rights related to the brand in exchange for assuming pre-closing liabilities for returns, markdowns and co-operative advertising deductions by the retailers up to a cap of $2.25 million.  
 
 
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