ReportersNotebook — Beauty Care, 2/27/12
SUPPLIER NEWS — Church & Dwight’s Nair has developed a line of hair removal creams and waxes for the body and face that are inspired by the hair removal and skin care secrets of Brazil. The new products, which are in midst of hitting retail shelves with full distribution expected by March, include: Brazilian Spa Clay Shower Power hair removal cream ($9.99), Brazilian Spa Clay Roll-On wax ($10.49), Brazilian Spa Clay Sensitive Face hair removal cream ($4.99) and Precision Face Roll-On wax kit ($7.99).
Burt’s Bees, a maker of natural personal care products, has developed a new collection, dubbed “Güd.” The collection includes hair care, body care and hand care in three fragrances — Orange Petalooza, Floral Cherrynova and Vanilla Flame — as well as one Target exclusive, Pearanormal Activity. Distributed in the same channels as Burt’s Bees, the collection aims to offer a modern, playful take on natural. The prices range from $4.99 to $11.99.
Coty’s Sally Hansen brand has teamed up with pop star Avril Lavigne to launch a limited-edition collection of edgy Salon Effects real nail polish strip designs inspired by the pop star’s signature energetic, no-frills attitude and straight-talking lyrics. The collection is comprised of 12 limited-edition patterns from skull-and-bones to funky leopard print. The collection is slated to hit retail shelves in April and will be priced at $9.99 each.
Prestige skin care, fragrance flourish
In the United States, beauty sales in both the mass and prestige channels were positive month after month in 2011, but prestige beauty took the spotlight in 2011, according to market research company The NDP Group.
In fact, the total U.S. prestige beauty industry experienced an 11% increase in dollar sales during 2011, with skin care and fragrance sold in U.S. department stores posting double-digit gains.
The U.S. food, drug and mass channel experienced a 4% increase in sales for total beauty in 2011 versus 2010. Makeup sales posted the biggest increase at 8%, followed by skin care at 3%, while fragrance sales declined 5% in dollar sales compared with 2010, according to NPD. In the prestige channel — meaning those products sold mainly in U.S. department stores — skin care and fragrance flourished, posting double-digit dollar growth of 14% and 11%, respectively, while makeup grew 9% compared with 2010.
“In continental Europe, where the prestige market is more mature, growth is more tempered, and performance among the categories has not been as dynamic as in the [United States] or [United Kingdom]. But nonetheless, prestige beauty managed to flourish thanks to brand media investment, bigger in-store animation and price promotions,” stated Karen Grant, VP and senior global industry analyst for NPD.
In a separate statement release in late 2011, Grant noted that while neutral tones and face products led in makeup in the past, strong gains in color categories of lip and nail color, and a new focus on eye shadow and eye definition with growth in eye pencil and brow products, had spread across countries during the first 10 months of 2011.
Revlon CEO: ‘2011 was a year of many notable achievements’
NEW YORK — Beauty company Revlon posted a 4.5% sales gain in 2011, driven in part by its acquisition of Sinful Colors and higher sales of Revlon and Almay color cosmetics, and Revlon ColorSilk hair color.
“2011 was a year of many notable achievements. We delivered net sales growth of 4.5% and sustained highly competitive operating income margins. We delivered our fourth consecutive year of positive free cash flow and we improved our capital structure by refinancing and reducing our net debt,” stated Revlon president and CEO Alan T. Ennis.
“From a marketplace perspective, our emphasis on effective brand communication and strong in-store execution drove our positive performance, and we introduced a number of successful new, innovative, consumer-preferred products across our entire portfolio," Ennis continued. "We acquired the Sinful Colors brand and signed two of Hollywood’s most sought-after actresses, Emma Stone and Olivia Wilde, as global brand ambassadors for the Revlon brand.”
Net sales in 2011 totaled $1.38 billion, up 4.5% compared with the year-ago period. Excluding favorable foreign currency fluctuations of $17 million, net sales rose 3.3%. In the United States, sales for 2011 totaled $757.4 million, up 3.9%. The increase primarily was driven by the inclusion of net sales of Sinful Colors and higher net sales of Almay color cosmetics and Revlon ColorSilk hair color. The increase was offset partially by lower net sales of Revlon beauty tools and Revlon color cosmetics.
Net income for the year was $53.4 million, or $1.02 cents per diluted share, compared with net income of $327.3 million, or $6.26 per diluted share, in the year-ago period. Net income in 2011 included the non-cash tax benefit of $16.9 million, as well as charges of $11.2 million, before tax, associated with the 2011 refinancing of the company’s revolving credit and term loan facilities. Net income in 2010 included the non-cash tax benefit of $260.6 million, as well as charges of $9.7 million, before tax, associated with the March 2010 refinancing of the company’s revolving credit and term loan facilities.
For the fourth quarter, sales were $359.8 million, a decrease of 2.5% compared with last year. Excluding unfavorable foreign currency fluctuations, net sales essentially were unchanged versus last year. In the United States, net sales during the fourth quarter were $191.6 million, down 4.7% versus the year-ago period.
Net income during fourth quarter 2011 was $36.4 million, or 70 cents per diluted share, versus $296.2 million, or $5.66 per diluted share, in the year-ago period. Net income included a non-cash tax benefit of $16.9 million in fourth quarter 2011 and $260.6 million in fourth quarter 2010.