Physicians Formula looks to top-line growth in 2010
AZUSA, Calif. Physicians Formula, whose beauty products are sold in 23,700 stores operated by Walmart, Target, CVS and Rite Aid, narrowed its fourth quarter net loss and is optimistic about 2010 as it has rationalized 28% of its SKUs and has a “strong product mix” in the pipeline.
“Although our overall market share decreased as expected versus last year, mainly impacted by the loss of a major customer, we saw an increase in dollar sales for our strategic platforms, including our bronzers, Mineral Wear face powders, and natural and organic products,” stated Ingrid Jackel, chairwoman and CEO. “Having rationalized 28% of our SKUs and with the promising start of our 2010 new products, we believe that we have a strong product mix as we begin 2010 that will enable us to increase both the efficiency of our product set and our market share in our core categories. In fact, after seeing our early 2010 new product sales, we believe we are in a good position to grow our top-line in 2010.”
Net sales for the quarter ended Dec. 31 totaled $22.3 million compared with $28.2 million in the year-ago period. The decrease is primarily due to the previously announced loss of a major customer and lackluster retail POS trends for the masstige cosmetics market in both the United States and Canada.
Net loss for the quarter totaled $2.5 million, or a loss of 18 cents per share, versus a loss of $24.5 million, or $1.80 per share, in the year-ago period.
The current quarter’s net loss includes a $4 million charge from the company’s implementation of a SKU rationalization initiative designed to discontinue slower-selling products. The initiative, which concluded in late December after 2010 plan-o-grams were finalized with its retail partners, resulted in the discontinuation of about 28% of the beauty company’s products as of Dec. 31.
“We believe we adapted well to the challenges we experienced in 2009. Although our top line was negatively impacted during the year, we made significant progress on our business model redefinition by improving our manufacturing efficiencies and diligently managing our general and administrative costs,” stated Jackel. “As a result, we generated $9.4 million of net cash from operating activities for the full year and $3.6 million for the back half.”
Helen of Troy acquires Pert Plus, Sure brands
EL PASO, Texas Helen of Troy has reached an agreement to acquire the Pert Plus hair care and Sure antiperspirant and deodorant businesses from Innovative Brands.
Terms of the deal were not disclosed. The acquisition is expected to close at the end of this month.
Innovative Brands, which is a portfolio company of private investment firm Najafi Cos., acquired the Pert Plus and Sure brands from Procter & Gamble in 2006.
“We are very pleased to acquire the Pert Plus and Sure brands from Innovative Brands. We have a growing position in hair care styling and personal grooming with our innovative appliance and accessory businesses and adding Pert Plus and Sure will enhance our role as a comprehensive provider of solutions for our hair care and personal grooming consumers and styling professionals,” stated Gerald Rubin, chairman, CEO and president of Helen of Troy.
Rubin stated that the Pert Plus and Sure brands will be integrated into its Idelle Labs division, which markets and manages its hair and skin care products. Consumer product brands currently sold by Idelle Labs include Infusium 23, which it acquired from P&G in March 2009; Brut; Vitalis; Final Net; Sea Breeze and Condition 3-in-1.
Helen of Troy expects the Pert Plus and Sure brands to generate roughly $65 million in annual sales for the Idelle Labs division and to be accretive upon integration.
Rubin noted that Helen of Troy will “continue to pursue similar acquisitions that can be integrated into Helen of Troy and provide accretive earnings to our shareholders.”
Walmart customers get Hard Candy for spring
BENTONVILLE, Ark. Walmart is gearing up for spring with a collection of new Hard Candy beauty products slated to be on shelf the first week of May.
The new Hard Candy makeup products include:
- Hot Smudge: A duo cream eyeliner/smudge shadow housed in a long case with a brush and smudger. The price is $6.
- Meteor Eyes: This is a high-pigment, baked eye shadow that is buildable to create endless looks. It can be used “dry” for a sheer color or “wet” for an intense, dramatic look. The price is $6.
- Powder Keg: These powdery-fine, silky-soft shadows promise to deliver more intense color than pressed or cream eye shadows. The formula is made from pearlized powders. The price is $6.
- Welcome Matte: This is a micro-pigmented pressed powder that promises to eliminate unwanted shine. It includes a mirror and sponge and is priced at $8.
- Moon Glow: This is a multi-tasking translucent powder infused with illuminating gold powder. It includes a mirror and sponge and is priced at $8.
- Take Me Out Liner (glitter): This is a micro glitter-infused eyeliner pencil priced at $5.
- Take Me Out Liner (molten metal): The molten metal eye pencils are available in a rainbow of shades. The color glides on smooth and stays soft and creamy for blending (about 30 seconds), then dries for a long-lasting finish. The price is $5.
In addition to the new makeup, beauty mavens can also buy a 100% nylon Train Case accented with the signature Hard Candy art and customer zipper pulls ($9) or a cosmetic bag that also features the signature Hard Candy styling and zipper pulls ($4).