BEAUTY CARE

Ellen Brothers named to Bare Escentuals board of directors

BY Antoinette Alexander

SAN FRANCISCO Bare Escentuals, a maker of mineral-based cosmetics, has appointed Ellen Brothers an independent member of its board of directors and a member of the board’s nominating and corporate governance committee.

Brothers brings nearly 30 years of senior management experience, most recently as president of the American Girls Brands, a business unit of Mattel. In this role, she is responsible for the strategic vision and day-to-day operations of the organization, which includes direct marketing, experiential retail and publishing channels. 

Brothers joined American Girl in 1995 as VP catalogue marketing. She was named president of the company in 2000, succeeding founder Pleasant Rowland. Prior to American Girl, she was with Pepperidge Farm Mail Order Company for10 years, where she served as president and GM. 

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Estee Lauder outlines 4-year strategy, will cut jobs

BY Antoinette Alexander

NEW YORK Battling challenging global economic conditions, The Estee Lauder Cos. has unveiled a four-year strategy to drive sales, reduce costs and realign its organizational structure, a move that will result in the reduction of about 2,000 employees over the next two years.

“The factors that impacted our second-quarter results were challenging on multiple levels, and not different from what many other companies have experienced, especially those companies dependent on consumer spending,” stated William Lauder, CEO. “The current difficult environment, which is global in scale, is not expected to improve in the near term. This underscores how vital it is for us to execute on our long-term strategy, even as we address the short-term challenges.”

During the quarter ended Dec. 31, each of the company’s product categories and geographic regions were adversely impacted by the economy. The worldwide economic downturn has negatively affected consumer demand, according to the beauty company, resulting in weak retail sales and prompting significant inventory destocking by certain key retailers.

Net sales for the quarter were $2.04 billion compared with $2.31 billion in the year-ago period. Net earnings totaled $158 million compared with $224.4 million last year. Diluted net earnings per common share were 80 cents compared with $1.14 reported in the prior-year quarter.

Looking to build on its core strengths, sharpen its focus on execution capabilities and lower costs, the company has outlined a four-year strategic plan and set performance goals for fiscal year 2010 through fiscal 2013. The plan includes, but is not limited to:

  • Generating more than 60% of sales outside the United States, making the company more balanced and diversified. The Asia/Pacific region is expected to lead growth, followed by Europe, the Middle East and Africa.
  • Address underperforming brands by changing their business models to improve profitability within 18 to 24 months.
  • Cut costs by $450 million to $550 million, including improvements in cost of goods, organizational resizing and regional realignments, benefits from the Strategic Modernization Initiative, reduction and management of SKUs, logistic optimization, indirect procurement savings and selective outsourcing opportunities.
  •  Reduce headcount over the next two years by about 2,000 employees, or 6% of the work force, institute an immediate companywide freeze on merit raises and a continuation of the current hiring freeze. Reductions would occur through a combination of normal attrition, reorganizations and job eliminations.
  •  Reinvest about $50 million to fuel growth and gain global share.

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Murad tops ’08 skin-care sales charts at Sephora, Ulta

BY Antoinette Alexander

EL SEGUNDO, Calif. Murad Inc., which was founded in 1989 by Howard Murad M.D., has announced that it is once again the top-selling clinical skin-care brand at Sephora and Ulta for the third year running, based on 2008 sales data reported by these retailers.

“It is tremendously gratifying to learn that we have once again topped the skin-care sales charts at our retail partners Sephora and Ulta,” stated Richard Murad, COO. “We enjoyed great success at retail in 2008. Not only did we maintain our No. 1 position at Ulta, Sephora and Sephora inside J.C. Penny, we further extended the margin by which we lead our competition. With a record-breaking sales year overall in 2008, we look forward to further building upon that success and extending it into other venues in 2009.”

Sephora has more than 750 stores in 21 countries, while Ulta operates 211 stores within 26 U.S. states.

The Murad brand is known for its topical and internal skin-care lines. It offers 88 consumer products and 45 professional products throughout 45 countries.

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