Revlon announces global organizational restructuring
NEW YORK Revlon is implementing a worldwide organizational restructuring to curb costs, a move that will result in the elimination of about 400 positions, including roughly 325 current employees and about 75 open positions.
The beauty company expects this restructuring will save roughly $30 million annually, about $15 million of which will benefit 2009 results.
The primary components of the restructuring involve consolidating certain functions; reducing layers of management, where appropriate, to increase accountability and effectiveness; streamlining support functions to reflect the new structure; and further consolidation of the company’s office facilities in New Jersey.
“Today’s announcement represents an important, necessary and logical next step forward for Revlon. Over the past two years, we have built improved and more efficient processes and workflows, which now allow us to take this step to reduce annualized costs by approximately $30 million,” stated Alan Ennis, Revlon president and CEO.
The moves are expected to result in charges of $20 million, comprised of $17 million in employee-related costs, including severance and other termination benefits, and $3 million related to the consolidation of the New Jersey office facilities. Revlon stated that roughly $17 million of the charges will be recognized during the second quarter 2009, while the remaining $3 million will be recognized in the second half of 2009. All of the charges are expected to be paid out over the 2009 to 2012 period, including $11 million in 2009, $6 million in 2010, and the balance of $3 million to be paid thereafter.
Commenting on its outlook for the second quarter 2009, Ennis said the company expects “a significant negative impact on net sales and profitability” due to retailers scaling back inventory levels in light of the current economic situation, unfavorable foreign currency fluctuations and pension expenses.
Jordana Cosmetics to infiltrate India market
KANPUR, India Los Angeles-based Jordana Cosmetics is making a foray into India’s cosmetic market through a partnership with India’s Glanor Pvt. Ltd.
Operated by the Bijou family for more than 18 years, Jordana has taken a personal approach to the research and development of its color cosmetics and currently offers a range of more than 1,000 items.
“The key to Jordana Cosmetics’ long-term success is the ability to deliver department store quality and the hottest color cosmetic trends to customers at value-driven prices,” stated Lisa De La Flor, EVP international sales at Jordana Cosmetics Corp.
Jordana will be competing in the mass market segment, which accounts for nearly 70% of total color cosmetics sales with brands like Lakme and ColorBar. Jordana’s range of products for eyes, lips, nails and face has been selected to suit Indian skin tones. The products do not use animal ingredients or animal testing.
Unlike some other foreign brands, which are launched in metropolitan cities, Jordana will first launch in Glanor’s hometown of Kanpur.
NPD Group: Online beauty product purchases see gain
PORT WASHINGTON, N.Y. The Internet is the only retail channel to post a slight increase in beauty product purchases, according to market research firm The NPD Group, as more women enjoy the ease and product availability of shopping online.
According to a report by NPD, the Web gained one percentage point and was the only retail channel to experience an increase in the number of women who reported mentions for beauty products. The average annual beauty spending per woman was $86 for this channel.
The report also found that those women who spent more on the Internet also reported that they bought more beauty products in general and that they started buying more expensive brands and products than in the previous year.
Higher gas prices were also a factor as more consumers opted to shop online instead of driving to a store.
Beauty mavens also turn to the Internet to research brands and products.
About 2-in-3 Internet shoppers who shopped for beauty online, but did not make a purchase, said they use the Internet to gather information and make price comparisons through different Web sites.
For the study, a nationally representative sample of females ages 18 to 64 were selected from NPD’s Online Panel during Nov. 20 and 26, 2008.