BEAUTY CARE

Revlon appoints new president, CEO

BY Antoinette Alexander

NEW YORK Revlon’s board of directors has elected Alan Ennis president and CEO, succeeding David Kennedy, who will become vice chairman. News of the move, which was described as a “planned transition,” came as the beauty company posted a 7.8% boost in first-quarter net sales in the United States, thanks in large part to increased sales of Revlon and Almay color cosmetics and Revlon ColorSilk hair color.

Ennis previously served as Revlon’s EVP, CFO and president of Revlon International. In addition to serving as Revlon’s vice chairman, Kennedy also will serve as a senior EVP at MacAndrews & Forbes Holdings, Revlon’s largest shareholder. Both Ennis and Kennedy will remain on the company’s board of directors.

In addition, Chris Elshaw, who has served as EVP and general manager of the U.S. region, has been elected EVP and COO. Steven Berns has been elected EVP, CFO and treasurer. The appointments of Ennis, Kennedy and Elshaw are effective May 1. Berns will join the company later in May.

Kennedy has served as the company’s president and CEO since September 2006. In March 2006, he was elected CFO.

“This planned leadership transition ensures that we have highly capable executives to continue to lead our business. I am most confident that Alan is best positioned to lead the company, as he has strong leadership capability, strategic ability and financial acumen,” stated Kennedy. “In addition, Chris and Steven are well-equipped to assume their respective roles. Alan and Chris, along with the other senior management team that make up the operating committee, will provide the company with outstanding leadership.”

The news came as Revlon announced that net sales in the United States totaled $191 million, an increase of $13.8 million, or 7.8%, compared with $177.2 million in the year-ago period. First quarter 2009 net sales benefited from higher pipeline shipments of first half and some second half 2009 new color cosmetics products, as a result of timing of shipments and a more extensive new product lineup, including Revlon ColorStay Ultimate Liquid Lipstick.

Total sales for the quarter were $303.3 million, compared with $311.7 million in the year-ago period. Excluding unfavorable foreign currency fluctuations, net sales increased by 3.8%.

Net income for the quarter was $12.7 million, or 25 cents per diluted share, compared with a net loss of $2.5 million, or 5 cents per share, last year.

Net income in the current quarter benefited from lower interest expense, a gain on the repurchase of senior notes and lower income tax expense, partially offset by higher foreign currency losses and higher pension expense. First quarter 2008 net loss included a gain of $6 million related to the sale of a non-core trademark.

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BEAUTY CARE

NPD, IRI study: Channel switching could present opportunities for growth in mass-market beauty

BY Antoinette Alexander

PORT WASHINGTON, N.Y. Beauty shoppers are tightening the grip on their wallets as a result of the current economy, but they are switching channels in such key categories as facial skin care, which could spell opportunities in today’s challenging marketplace, according to findings by The NPD Group and Information Resources Inc.

This is the first year the two groups have partnered to develop a product, the Beauty Cross Channel Monitor, and it is the U.S. beauty industry’s first and only point-of-sale tracking product that looks at sales performance in department stores and food, drug and mass (excluding Walmart).

“For the first time we have the ability to take a broader view of the U.S. beauty industry,” stated Diane Nicholson, president of beauty at The NPD Group. “When looking across total channels — department stores and food, drug and mass channels, excluding Walmart — we can size the market at $19.1 billion, representing approximately 60% of the U.S. beauty industry.”

In looking at the data, The NPD Group and IRI found that while the beauty industry suffered the same fate as most industries and posted declines in 2008, there were some pockets of growth and opportunity driven by some channel shifting.

While department store sales of makeup declined in 2008 versus 2007, makeup posted a slight increase (1%) in the food, drug and mass channel.

Conversely, the hair care segment grew by 6% in department stores compared with a 4% decline in mass, where hair represents a larger portion of the overall business.

Skin care remained steady across all channels but a bright spot was facial skin care. This segment rose by 1% across all channels, driven by a more health performance in mass, with 2.1% growth in 2008.

“In this ever-changing and challenging environment, the ability to understand the market dynamics across channels is more crucial than ever,” stated John Deputato, SVP client solutions for IRI. “Our clients are very interested in how consumers are changing their shopping patterns.”

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Procter & Gamble may widen the scope on men’s grooming

BY Antoinette Alexander

NEW YORK With the Gillette brand in its fold, Procter & Gamble has had the male shopper in its sights for some time, but it appears that the Male Grooming Zone area at the recent NACDS Annual meeting may have been a glimpse into a major aspect of the manufacturer’s marketing strategy in beauty and grooming — a much greater focus on men.

At the NACDS Annual meeting in April in West Palm Beach, Fla., P&G set up a Male Grooming Zone area where men could get pampered with Gillette products.

According to an internal P&G company memo obtained and reviewed by The Wall Street Journal, P&G is looking to restructure the unit to place a greater emphasis on men and could develop new products for high-end retailers, salons and spas.

According to the WSJ, the memo, circulated to P&G staff last week, states that the company will reorient its beauty business by gender to “better serve Him or Her,” rather than its typical organization around product categories.

“Our principal beauty focus has been winning with women, yet we’re not broadly serving male consumers’ needs outside of Gillette and fine fragrances,” Ed Shirley, P&G’s vice chairman of global beauty and grooming, wrote in the memo, the WSJ reported. The new structure is expected to take effect July 1.

Furthermore, the memo suggests that the manufacturer may launch upscale shaving products to be sold in “prestige and luxury” outlets, the WSJ reported.

In addition, P&G is mulling an expansion into professional salons that could include “skin care, cosmetics and fragrances,” the memo states, according to the WSJ.

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