BoB_WEB 6/23/09 4:08 PM Page 150

2 • L’Oréal fetes 100 years in beauty 6 • P&G adds The Art of to portfolio 3 • Consumers put a lid on color 7 • Value products smooth straying hair category 4 • Coty smells success with Del Labs deal 8 • drops out of U.S. market 5 • restructures 8 • McDonald takes lead position at P&G 6 • Vichy brings ‘Oo La La’ to U.S. beauty 9 • Shopper buzz

Drug Store News www.drugstorenews.com June 2009 • 1 BoB_WEB 6/23/09 4:08 PM Page 150

THE BUSINESS OF BEAUTY

L’ORÉAL FETES 100 YEARS IN BEAUTY

BY ANTOINETTE ALEXANDER

A century ago, in a small apartment teer projects, followed by a celebration L’Oréal: A look back in , French chemist Eugène for all employees. More than 3,000 Schueller started a company called employees in L’Oréal USA’s facilities 1907: Eugène Schueller, a young French Sofia-Antipolis. “La Société Française des Teintures in , New Jersey, Ohio, chemist, created the first synthetic hair dye. Inoffensives Pour Cheveux,” which Illinois, Colorado, Kentucky, Arkansas, 1982: Plénitude launched, representing translated means “The Safe Hair-Dye Tennessee, Texas and Puerto Rico 1908: With just 120 euros in his pocket, the entry of the L’Oréal Paris brand into Company of France.” With a dining spent more than 12,000 hours giving Schueller registered his company and . Today, Plénitude is known as room that doubled as a demonstra- back in their local communities. established it in a two-bedroom apartment Dermo-Expertise. on rue d’Alger. The dining room was used tion area and a kitchen as a laborato- Employees engaged in a variety of as the demonstration room and the 1984: L’Oréal acquired ry, the chemist, inventor and market- volunteer activities, including reading kitchen as the laboratory. Fragrances. ing wiz for his time sought to estab- and crafts with children, visiting sen- lish that beauty must be based on sci- iors, revitalizing public parks and pub- 1909: Schueller gained the backing of an 1986: Niosome by Lancôme was launched. ence. He never saw the risks but lic buildings, preparing the unem- accountant from Epernay, who loaned him 4,000 euros. He moved the company to a 1989: was acquired, rather the possibilities, and his deter- ployed to return to the workforce, sort- four-bedroom apartment on the rue du and the of La Roche-Posay mination paid off. In 1939, the compa- ing clothing at thrift shops, sorting Louvre and recruited his first employee. Pharmaceutical Labs. ny was named L’Oréal. food and making meals at homeless Over the next 100 years, L’Oréal’s shelters, assembling bicycles for chil- 1910: Schueller began to export his prod- 1990: Lancôme women’s fragrance, commitment to science and innovation dren, walking dogs at animal shelters ucts abroad. Trésor, was launched. laid a solid for growth and preparing hygiene kits for those 1934: Schueller took over Monsavon, and 1993: L’Oréal acquired and worldwide. Today, the beauty giant living in temporary housing. in 1934 launched Dop, the first mass mar- Capital Soleil by Vichy, which contained has more than 20 global brands, a pres- So what’s in store for the next 100 years? ket without soap. the new filter Mexoryl SX.

1935: The company launched the sun tan 1994: Cosmair became a wholly owned oil Ambre Solaire. subsidiary of the L’Oréal Group.

1946: L’Oréal launched Oréol, the first 1996: The L’Oréal Group acquired the U.S. cold wave in . company .

1953: The company Cosmair Inc. was cre- 1998: L’Oréal USA acquired ethnic hair ated and became the exclusive licensee of brand Soft Sheen Products. the L’Oréal Group in the . 1999: L’Oréal acquired Maybelline in Japan. 1960: Elnett hairspray was launched. Elnett remains one of the most coveted 2000: L’Oréal acquired the U.S. company products of hairstylists around the world. Carson, a maker of ethnic hair products, as well as Matrix and Kiehl’s Since1851. 1964: Lancôme was acquired, which transported L’Oréal into the world of toi- 2001: L’Oréal acquired the U.S. company letries, makeup and perfume, and gave it BioMedic, which specialized in skin care ence in more than 130 countries and The company stated that it continues access to the selective channels of the products to accompany and recorded 17.5 billion euros (U.S. $24.5 to make greater strides in its under- perfume sector. L’Oréal took over . plastic treatments. billion) in consolidated sales in 2008. standing of skin and hair, and recent 1965: Guy Laroche Perfumes were created. 2002: L’Oréal acquired the U.S. company “Our rigorous approach to quality discoveries on the role of genes in cuta- ARTec, which marketed hair care and hair and innovation through [research and neous aging are opening new inves- 1966: L’Oréal introduced Preference, its color products for the salon industry. development] will continue to be a tigative horizons for its scientists. A first mass market hair color line. driving force for L’Oréal in making more thorough understanding of stem 2003: L’Oréal inaugurated the first ethnic 1970: L’Oréal acquired . hair and skin research center in Chicago. beauty accessible to women and men cells’ biological behavior, which is worldwide,” the company stated. “The responsible for skin and hair regenera- 1973: L’Oréal introduced the “Because I’m 2005: Mexoryl was approved in the United ability to address different cultures tion during aging, has allowed the Worth It” ad campaign, which was created States. L’Oréal acquired the U.S. company and their specific needs has helped company to, for example, select the in the United States. SkinCeuticals and integrated it into the broaden the concept of beauty and active ingredients that protect them. Active Cosmetics Division. 1974: Lancôme was introduced in the made the company what it is today.” “We believe in a holistic vision of United States. 2006: L’Oréal acquired . To celebrate its 100th anniversary, beauty. We believe beauty will become Mexoryl got FDA approval for use in the L’Oréal not only celebrated the men global, incorporating cosmetics used 1975: Equalia by Vichy was created, the United States. and women who have made the com- on the surface but also those taken first based on an anti-dehydra- pany a success but also supported a orally or via the use of a device to max- tion mechanism. L’Oréal had signed tech- 2007: L’Oréal acquired the U.S. company nical agreements with Vichy in 1954. The PureOlogy. number of socially responsible projects imize effects or modify the skin, as company was acquired outright in 1980. aimed at helping those less fortunate well as surgical procedures (i.e., 2008: L’Oréal and PPR signed a definitive in more than 60 countries, according to and injections),” the company stated. 1978: Anais Anais perfume by agreement for the effective transfer of the company. “In terms of our company, L’Oréal is in was launched. Yves Saint Laurent Beauté to L’Oréal. For example, in the United States, a position to anticipate these changes 1979: Centre International de Recherches 2009: L’Oréal celebrated its 100th 17 L’Oréal facilities celebrated the and remain the beauty market leader Dermatologiques was created at anniversary. anniversary with a morning of volun- in these categories.”

Drug Store News www.drugstorenews.com June 2009 • 2 BoB_WEB 6/23/09 4:08 PM Page 150

THE BUSINESS OF BEAUTY

CONSUMERS PUT A LID ON COLOR COSMETICS: FOCUS ON EYE MAKEUP

BY ANTOINETTE ALEXANDER

Color cosmetics had a bit Among the top perform- launched earlier this year its eyelashes, however, ham- tinued to show their love of of a rough go in 2008, as ers in 2008 was eye makeup, Lash Stiletto mascara, which pered sales of lip products gloss, which is easy to apply beauty shoppers curbed which posted a 3% value features an elastic formula — namely lip plumpers — and gives lips a sexy shine. their spending in light of sales gain, according to that stretches lashes for according to Euromonitor. In makeup, mineral the current economy — but Euromonitor. and provocative length. It is With the novelty of lip makeup continued to be the silver lining is that eye pencils showed the most infused with a Pro-Vitamin plumpers wearing off, and popular among beauty shop- many consumers traded growth, at nearly 5%, thanks B-5 formula that conditions with women focusing on pers, given its more healthy down from premium color in large part to a continued and smoothes for black- lashes, lip products and natural positioning, but cosmetics to mass-market emphasis on smoky eyes, patent shine, according to dropped by 3% in 2008. In overall, facial makeup sales offerings to save money. while innovation helped the company. contrast, sales remained flat during 2008, The year also proved that fuel sales of mascara. Consumers’ focus on full grew by 3%, as women con- according to Euromonitor. the eyes still have it. didn’t fair as According to Euromonitor well, inching up 1%, due in Cross-channel beauty sales 2008 vs. 2007 International’s “U.S. Color part to a lack of innovation Cosmetics” report for 2009, and a snub by some older sales of premium color beauty shoppers who be- Total retail Prestige FDMx cosmetics declined by lieve that eyeshadow nearly 3% to $3.5 bil- exaggerates the lines Total beauty -2% -3% 0% lion. This made 2008 of the eyelids. the first year premi- Whether it was vi- Makeup -2% -4% 1% um color cosmetics brating brushes or showed a sales de- volumizing formulas, Skin care 0% 0% 0% cline during the re- innovation helped view period, accord- fuel sales of mascara, Hair care -4% 6% -4% ing to the research which grew by 3% in firm. There’s no doubt 2008, according to Women’s fragrance -5% -5% -6% that some of that Euromonitor. money shifted to For example, Coty Men’s fragrance -8% -8% -6% mass-market retailers. Inc.’s brand Source: NPD/IRI Beauty Cross Channel Monitor The NPD Group introduced for 2009 Total retail = department stores, food, drug and mass (excluding Walmart) and Information Re- the new Sexy Curves FDMx = food, drug and mass (excluding Walmart) sources Inc. — through mascara, which prom- their new point-of- ises to deliver up to sale tracking product, 70% curlier lashes called the Beauty via the breakthrough Cross Channel Mon- Triple Plump brush. itor — found a similar The applicator’s hour- trend. Their research glass shape curves in found that sales of to capture the formula makeup at food, drug for maximum lash and mass (excluding loading, and also Walmart) rose 1% in curves out to dramati- 2008 compared with cally curl and de- 2007 — the only beauty clump lashes. The category to see a lift Lash Inflation Form- at mass. Meanwhile, ula has been devel- makeup sales at pres- oped to work in syn- tige dropped 4% during ergy with the Triple that same period. Plump brush. The col- The Beauty Cross lagen-enriched formu- Channel looks at sales la contains proteins, performance in depart- vitamins and condi- ment stores and the tioners to strengthen food, drug and mass Maybelline’s and amplify lashes. channel (excluding Lash Stiletto In addition, May- Walmart). mascara belline New York

Drug Store News www.drugstorenews.com June 2009 • 3 BoB_WEB 6/23/09 4:09 PM Page 150

THE BUSINESS OF BEAUTY

COTY SMELLS SUCCESS WITH DEL LABS DEAL: FOCUS ON FRAGRANCE, NAIL

BY ANTOINETTE ALEXANDER

Sally It is likely that Coty will called the nail wall. Through Hansen’s leverage the enhanced fra- the reinvention process, the Insta-Dri grance department to pro- department has now been fast dry mote its more recent success- dubbed the color and care nail color ful launches, including the wall, more reflective of both McGraw by Tim McGraw fra- what’s on it, as well as how grance for men and Halle by the shopper thinks about it.” . McGraw by Tim This research currently is McGraw launched in 2008, being presented to customers. and is expected to be a $20 A preview indicated clearly million-plus franchise. Halle positioned product segments, It has been less than two and initiatives, including fra- their retailer has a fragrance by Halle Berry launched in enhanced consumer commu- years since Coty Inc. ac- grance. In fragrance, Coty department, and an even larg- the spring and, according to nication and a significant quired Del Labs, and now currently holds more than a er percentage perceive the Coty, landed as the No. 1 new reinvigoration to an impor- that the dust has settled, the 30% share of the market. retailer’s fragrance assortment woman’s SKU for the four tant and growing section of synergies are growing in- One factor that makes as being smaller and more weeks ended May 24 with a the cosmetics category. creasingly evident in both its Coty unique, compared with limited than it actually is. 4.6% dollar share. It is ex- There are opportunities to market share of cosmetics, some of its competitors, is its pected to generate $25 mil- further grow the nail care nail and fragrance, and in its foothold in both the mass The [nail wall] lion in annual retail sales. segment, as the economy is efforts to enhance the shop- market and prestige with fra- “ Coty, a U.S. leader in both forcing many beauty shop- ping experience at mass. grance, said Mary van Praag, has now been nail color and nail treatment pers to forgo pricey salon vis- At this year’s National SVP sales. This dichotomy with the Sally Hansen brand its in lieu of at-home beauty Association of Chain Drug perhaps is more important dubbed the color — with more than a 43% share treatments. Because of this, Stores Annual meeting in today than ever before, as re- of market in each segment, several segments of the nail West Palm Beach, Fla., Coty search indicated that budget- and care wall, according to Information Re- care market — namely treat- executives once again sat conscious beauty shoppers sources Inc. data for the 52 ments and — are down with Drug Store News are changing their buying more reflective of weeks ended May 24 — and experiencing an upswing. In to share key highlights and to habits and mass-market re- the No. 2 manufacturer in fact, nail color has been talk about where the beauty tailers are turning to innova- beauty tools with the La Cross coined the new . company is heading. For tive concepts (e.g., CVS’ new both what’s on it, brand, has been working with According to data from retailers, the changes are Beauty 360 stores) to capture retail and market research IRI, the cosmetic nail catego- expected to unlock significant their beauty dollars. as well as how partners to reinvent the infa- ry totaled nearly $586 mil- sales growth opportunities. According to Coty execu- mous “Nail Wall.” lion, up 0.36% compared Taking a quick look back, tives, fragrance at mass rep- the shopper David Russell, VP cosmet- with the year-ago period, the late 2007 acquisition of resents a tremendous oppor- ic sales strategy, stated, “The at food, drug and mass Del enabled Coty to extend its tunity. In fact, John Burg- thinks about it.” consumer has spoken to us (excluding Walmart) for the portfolio offering, which prior fechtel, VP sales strategy, through six months of 52 weeks ended Dec. 28, to the deal made 68% of its customer marketing and David Russell, research and helped us to 2008. Nail treatments experi- sales in fragrance. Previously, sales operations, said there is Coty Inc. reinvent what has been enced a 4.8% boost, with color cosmetics accounted an $85 million opportunity to known forever as the nail sales reaching nearly $72 for 15% of Coty’s sales, while unlock fragrance at mass — Coty has been working wall. In spite of the fact that million. Even more interest- toiletries stood at 14% and especially in today’s eco- hard to change that, and this this section of the cosmetic ing is nail polish, which skin and sun care only at nomic environment where year beauty shoppers will start department typically fea- experienced a 5.2% increase, 3%. Through the acquisition, shoppers are trading down to see enhancements in the tures a lot more than just nail with sales reaching $237.2 Coty Beauty’s portfolio has from department stores. fragrance category at mass. products, it ended up being million for the period. been bolstered with the addi- The key, however, is to tion of Del’s Sally Hansen, unlock the category — literal- N.Y.C. New York Color and ly — and to enhance the shop- La Cross brands. ping experience through im- Having such brands in its agery and sampling. Previous fold makes Coty an even research conducted by Coty more powerful player in the showed that many consumers beauty space, and the mo- are unfamiliar with the fra- mentum shows little sign of grance department in the slowing as the company retailer they most frequently gears up for new launches shop. Some don’t even realize Sally Hansen’s HD Hi-Definition nail color

Drug Store News www.drugstorenews.com June 2009 • 4 BoB_WEB 6/23/09 4:09 PM Page 150

THE BUSINESS OF BEAUTY

REVLON RESTRUCTURES WITH COST CONTROL, NEW MANAGEMENT, NEW PRODUCTS

BY ANTOINETTE ALEXANDER

Revlon bolstered its first- as EVP, CFO and treasurer. Meanwhile, Revlon posted million, compared with last cosmetics net sales rose 8.9%. quarter and Kennedy now serves as for the first quarter ended year’s $311.7 million. Ex- Sales benefited from the trimmed debt as new product Revlon’s vice chairman and March 31 a net income of $12.7 cluding foreign currency shipments of new products. introductions helped grow a senior EVP at MacAndrews million, compared with a net fluctuations, Revlon color While the first-quarter net sales of its color cosmetics. & Forbes Holdings. loss in the year-ago period of results were in line, at least But the company’s turn- “Alan has extraordinary $2.5 million, and reduced its one industry analyst ex- around efforts continue as the energy, the leadership skills debt by $38.3 million. pressed caution in light of beauty giant has a new leader and strategic ability to lead Net sales for the quarter, the slew of Revlon news and at the helm and is cutting 400 the worldwide Revlon organ- which were hampered by the quality of earnings. positions worldwide. ization at this time and con- unfavorable foreign currency “With Q1 benefiting from One month after announc- tinue to implement our strate- fluctuations, were $303.3 load-in of new products, that ing that Alan Ennis, former gy most effectively,” Kennedy raises the risk that, if the new EVP, CFO and president of told analysts during the com- products are not successful Revlon International, was pany’s April 30 conference or if the launches are weaker succeeding David Kennedy call to discuss first-quarter than planned because of the as the new president and results. “As you know, Alan recession, Revlon will get CEO, Revlon revealed in late has been a key member of our heavy returns in the coming May a worldwide restructur- leadership team as CFO [and] quarters,” stated J.P. Morgan ing initiative aimed at saving president of Revlon Inter- analyst Carla Casella in a about $30 million annually. national, and is a member of research note. “Today’s announcement the operating committee. In However, Revlon’s senior represents an important, nec- those roles he has been closely management remains opti- essary and logical next step involved in all the key deci- mistic as it brings to market a forward for Revlon,” stated sions we have made over the new lineup for the second Ennis when announcing the past few years.” half of 2009 that features restructuring. “Over the past Kennedy had served as first-to-market technology of two years, we have built president and CEO of Revlon and color cos- improved and more efficient Revlon since September metics. These introductions processes and workflows, 2006, when he replaced Jack include the new Revlon which now allow us to take Stahl. After taking the helm, ColorStay Ultimate liquid this step to reduce annual- Kennedy began a restructur- lipstick, the first and only ized costs by approximately ing program that involved one-step lip color that fea- $30 million.” cost control; pulling the ail- tures the ColorStay long- The initiative involves ing Vital Radiance line, a wear technology combined cutting about 400 positions cosmetics line for mature with an exclusive condition- worldwide, including about women; and embarking on a ing complex; Revlon Double- 325 employees and 75 open round of job cuts. Twist mascara, a first-to- positions. As of Dec. 31, The news of the most mass 2-in-1 brush that has 2008, the company em- recent senior management traditional bristles to thicken ployed approximately 5,600 changes came on the heels of lashes and innovative combs people, according to Rev- a buyout proposal from to define; and the Revlon lon’s most recent annual fil- ’s firm ColorStay Mineral Mousse ing with the Securities and MacAndrews & Forbes, makeup and Mineral Finish- Exchange Commission. owner of 75% of Revlon ing powder, which are ex- The restructuring could be stock, to buyout minority tensions of the Revlon viewed as Ennis’ first stamp shareholders of Revlon, a ColorStay Mineral franchise. on the company since move that would reduce the Under the Almay brand, assuming the president and company’s hefty debt load. there’s the new Almay Smart CEO post on May 1. At that The timing may have Shade Smart Balance make- time, Revlon also appointed raised the of some up, which is an extension of Chris Elshaw, who had industry observers, but a the Almay Smart Shade fran- served as EVP and general Revlon spokesperson said, chise, and the new Almay manager of the U.S. region, according to published re- Pure Blends Volumizing as EVP and COO. In addi- ports, that the executive mascara, which is an exten- tion, Steven Berns, former moves had nothing to do Revlon DoubleTwist mascara and ColorStay Ultimate liquid lipstick sion of the Almay Pure CFO at Tradeweb, was hired with the proposed buyout. will be introduced in the second half of 2009. Blends natural collection.

Drug Store News www.drugstorenews.com June 2009 • 5 BoB_WEB 6/23/09 4:09 PM Page 150

THE BUSINESS OF BEAUTY

VICHY BRINGS ‘OO LA LA’ TO U.S. BEAUTY

BY ANTOINETTE ALEXANDER

French skin care brand bution through select retail snapped up Brooks, but told Drug Store News. The that skin care is one area they Vichy Labs recently partnerships. Vichy also has since part- Vichy brand was founded in still are likely to spend money unveiled several new prod- A lot has changed since nered with retailers Duane France in 1931, and was on, and Vichy appears to be ucts, but what’s even more Vichy made its U.S. debut in Reade and CVS/, acquired outright in 1980. reaping the benefits. interesting is the brand’s 2002 inside the Derma Skin- selling its products in select Patsalidés said the compa- Vichy currently represents potential in the U.S. skin care Centers within select locations that have high-end, ny would like to take the about 20% of facial skin care care market in the coming Brooks Pharmacy locations. in-store skin care sales within the 700 doors in years as it expands distri- Not only has Rite Aid boutiques. which it is sold. Patsa- In these brightly lidés said that the lit European-style skin care cate- boutiques, prod- gory at mass ucts are showcased grew by 6%, on white shelving, so Vichy has giving the centers an grown three upscale, professional times fast- feel. A skin adviser, er than the often outfitted in a mass market. white lab coat, is on On the pro- hand to create personal- Vichy Labs’ duct front, Vichy ized skin profiles on the spot Liftactiv CxP recently launched using high-tech computer- several new skin care ized equipment. brand nationwide, but it will offerings, including the Today, Vichy is sold in be through partnerships new NeOvadiol SPF 15 about 700 doors, a number with select retailers. He intensive densifying bright- that likely will reach roughly noted that in the next five ening cream for mature skin, 800 by year’s end, Philippe years, there is a potential to Aqualia Thermal Light and Patsalidés, general manager be in 3,500 doors. Mat for 24-hour moisturiza- Vichy showcases its products by utilizing brightly lit displays with white shelving, of the Active Cosmetics Even in today’s economy, tion and Liftactiv CxP Bio- giving the displays a high-end, European feel. Division for L’Oréal USA, women have demonstrated Lifting Daily Care. P&G ADDS THE ART OF SHAVING TO MALE GROOMING PORTFOLIO Procter & Gamble execu- Founded in 1996, The Art of pressed their desire to place a tives have made it clear that Shaving grooming and shav- much greater focus on men, they see greater opportuni- ing products are sold in high- and as part of that effort, the ties within the men’s groom- end department stores and company is reorienting its ing segment, and now the outlets, as well as beauty business by gender, as beauty company is getting through its 36 retail locations opposed to around product into the retail business in the United States. Products categories. It also set up the through its recent acquisi- also can be purchased online Male Grooming Zone at tion of upscale grooming at www.theartofshaving.com. the National Association of brand The Art of Shaving. According to P&G, the Chain Drug Stores Annual “As a leading high-end acquisition is “the natural meeting in April in West male grooming brand, The evolution of a strong existing Palm Beach, Fla., where men Art of Shaving is a perfect fit partnership.” Since opening could get pampered with for P&G Male Grooming, its doors in 1996, The Art of products. broadening our footprint in Shaving has designed its Meanwhile, the company the prestige channel and razors to fit only Gillette has been causing quite a stir appealing to the high-end blades. In addition, over the with its series of instructional male consumer with prod- past two years, the two videos on YouTube on “man- ucts and services that meet brands have partnered on scaping,” defined as basically his unique wants and needs the co-design and marketing shaving below the belt. The — when and where he of The Fusion Chrome Coll- videos promote the use of shops,” P&G stated. ection of premium razors Gillette blades, razors and P&G recently acquired The Art of Shaving, an upscale grooming brand established in Financial terms of the deal and accessories. such other products as body 1996 that has been partnering with Gillette over the past two years to co-design and were not disclosed. P&G executives have ex- wash and after-shave balms. market The Fusion Chrome Collection of premium razors and accessories.

Drug Store News www.drugstorenews.com June 2009 • 6 BoB_WEB 6/23/09 4:09 PM Page 150

THE BUSINESS OF BEAUTY VALUE PRODUCTS SMOOTH STRAYING HAIR CATEGORY

BY ANTOINETTE ALEXANDER

The hair care segment has lost take a value approach to “natural” make it work more effec- some of its volume in recent years, hair care. tively: It takes 10 min- thanks in large part to the recession “This dynamic enabled Organix utes, compared with 20 and a lack of blockbuster product from Vogue International to reach minutes to 30 minutes; launches. However, the good news sales of just over $50 million in 2008, has 10 times less alka- is that consumers are increasingly after just two years on the market,” linity than conven- looking for value — rather than Euromonitor stated. “The modestly tional technology; buying based on specialized formu- priced L’Oréal’s Garnier Fructis more selectively lations regardless of price — and brand, which claims to have natural targets melanin mass-market retailers are well posi- active ingredients, also benefited.” ; is less tioned to reap the benefits. There were, however, two growth likely to react According to Euromonitor Inter- subsectors in 2008, according to with hair pro- national’s 2009 “U.S. Hair Care Euromonitor’s data: perms and tein fibers; Report,” U.S. hair care value sales relaxants, and hair color. Perms and and helps to slipped by 2% in 2008 — a drop relaxants rose 3% in 2008, as manu- control dam- driven by declines in shampoo, con- facturers and retailers placed a aging free ditioner and styling product sales. greater emphasis on the unique hair radicals. Actually, the slowdown in U.S. hair care needs of ethnic consumers, care sales can be traced back to the namely African-Americans. The nat- second half of 2007, as the major ural/organic trend has been espe- hair care product launches and cially pronounced in the ethnic hair relaunches of 2006 ran through. care segment as these shoppers tend Then factor in the economic crunch. to desire gentler treatments. The silver lining is that consumers For 2009, SoftSheen-Carson de- are changing the way they shop for veloped a string of new prod- hair care. Instead of snapping up ucts, including the new Roots pricey premium salon brands that of Nature line. The natural- tout new features or specialized for- based hair care line is mulations, shoppers increasingly are designed to battle severely scouting for value. Manufacturers damaged hair with a are heeding the call and are develop- combination of green ing products that offer a cheaper tea and shea butter. alternative to salon hair care. In addition, Alberto- For example, L’Oréal Paris Culver launched for brought to retail earlier this year its 2009 several new prod- new EverPure, a sulfate-free hair ucts. For example, its color care system that is positioned Motions Marula Natural as the first line to feature such ingre- collection now dients, quality and expertise in the includes Marula Natu- mass market. The EverPure collec- ral Therapy strengthening tion, priced between $6.99 and shampoo, strengthening con- $8.99, is free of harsh sulfates, harsh ditioner and strengthening surfactants and harsh salts that can thermal oil treatment. dull color and damage hair. Meanwhile, hair colorants Also this year, Procter & Gamble rose 1% during 2008, according Beauty introduced its new to Euromonitor, as more women Pro-V Nature Fusion line. The line opted to color their hair at home has two collections: Moisture Balance in lieu of costly salon treatments. and Smooth Vitality and Contributing to the growth was conditioners (SRP $3.99). There also the 2008 launch of P&G’s Perfect is a Pantene Pro-V Nature Fusion 10 by Nice ’n Easy, touted as the treatment product (SRP $5.99). biggest home hair care innovation The new Pantene Pro-V Nature in more than 50 years. It has a sug- Fusion line also taps into the popu- gested retail price of $13.99. larity of natural or nature-inspired What makes the product unique, products. Natural or according to P&G, is the lightening organic-positioned formulas have system, called AminoGlycine. The gained popularity among con- system took nearly 10 years to sumers, but the economy has develop, with 18 filed patents. The prompted many shoppers also to attributes of AminoGlycine that

Drug Store News www.drugstorenews.com June 2009 • 7 BoB_WEB 6/23/09 4:09 PM Page 150

THE BUSINESS OF BEAUTY

MAX FACTOR DROPS OUT OF U.S. MARKET

BY ANTOINETTE ALEXANDER

HUNT VALLEY, Md. — The Max “Max Factor is a strong, in the region — CoverGirl.” Factor legacy is coming to an profitable brand and re- Since it was officially end — at least in the United mains one of P&G Beauty & founded in 1909, the brand States — as Procter & Gamble Grooming’s key engines for has developed countless will stop selling the makeup growth. However, we are makeup innovations and brand in the United States in choosing to discontinue the has become synonymous first quarter 2010. The compa- U.S. Max Factor brand, with beauty and fashion to ny will shift that focus to its which has different prod- millions of women in all CoverGirl brand. ucts, packaging and distri- parts of the world. In fact, it While Max Factor is the bution channels than the became the first motion-pic- leading cosmetics brand in Max Factor brand marketed ture makeup in 1914, and more than 20 countries, and around the world,” stated the word “makeup” was the No. 2 cosmetics brand in Virginia Drosos, president of coined by Max Factor. such key markets as the global female beauty at P&G acquired the brand United Kingdom and Russia, P&G. “P&G is fully commit- from Revlon in 1991 for $1.14 it represents a small portion ted to profitable growth and billion. Over the years, P&G of the P&G cosmetic busi- leadership in cosmetics, both has worked to leverage the ness in the United States, in the United States and brand’s theatrical heritage. P&G stated. According to globally. This is the right In 2005, it signed Carmen reports, the brand generates decision to further strength- Electra to represent the more than $1 billion in sales en our cosmetics business brand and more recently in worldwide in more than 70 because it allows us to focus 2008, it tapped countries, but its U.S. dollar P&G has announced plans to stop selling its Max Factor makeup brand in the United States our U.S. resources on contin- Gisele Bundchen as the new share is about 1.2%. and focus its resources on continuing to grow the CoverGirl cosmetics brand. uing to grow the No. 1 brand of Max Factor. MCDONALD TAKES LEAD POSITION AT P&G CINCINNATI — On July 1, a new as a U.S. Army captain, joined leader will officially be at the P&G in 1980. He rose through “The board is confident that helm at Procter & Gamble, as the ranks quickly, managing Robert McDonald, currently such brands as Solo, Cascade, A.G. [Lafley] and [Robert COO, takes over as president and and . In the 1990s, CEO. He succeeds A.G. Lafley, McDonald spent his time in Asia McDonald] have made the right who will become chairman. as P&G expanded its reach “A.G. Lafley has led the beyond North America. choices to deal with the current transformation of P&G over the In 2004, McDonald was ap- past nine years,” stated Jim pointed vice chairman global economic realities and have McNerney, presiding director of operations and has served as P&G’s board. “P&G is a far COO for the past two years. built the leadership team to more consumer-driven, exter- During his tenure at P&G, nally focused and innovative Lafley has revitalized the compa- guide P&G through the decade company than it was a decade ny and coordinated the $57 billion ago. P&G’s organization is Robert McDonald acquisition of Gillette Co., creat- ahead. It’s the right time for world-class. The board is confi- ing a consumer products power- dent that A.G. and Bob have made the right house with more than 20 billion-dollar brands. Bob to step up as CEO. choices to deal with the current economic reali- The recession has hampered P&G’s business as ” ties and have built the leadership team to guide consumers curb spending, and in May the com- Jim McNerney, P&G through the decade ahead. It’s the right pany issued a lower-than-expected earnings time for Bob to step up as CEO. The board is also forecast for fiscal 2010. But at least one source P&G pleased that A.G. will continue to serve full-time told the Journal that Lafley’s depar- as P&G’s chairman.” ture has been in the works for at least two or He has broad experience in every facet of P&G’s McDonald, who also has been appointed a three years and is not related to any dissatisfac- business and in virtually every part of the world. member of P&G’s board, has nearly 30 years of tion with his performance. He has a strong and consistent track record of brand building, market development, global “I’ve worked with Bob for most of my career at business results and has been an integral member business unit and global operations leadership P&G, and he and I have worked side-by-side of my leadership team. He thinks strategically experience across the company. over the past decade,” Lafley stated. “He believes and operates systemically. He has my complete McDonald, a West Point graduate who served in P&G’s purpose and P&G’s people to his core. confidence and support.”

Drug Store News www.drugstorenews.com June 2009 • 8 BoB_WEB 6/23/09 4:11 PM Page 148

THE BUSINESS OF BEAUTY

How has the economy altered your beauty regimen? Are there areas, such as makeup or hair care, where you have traded down for cheaper alternatives?

“I haven’t changed “Yes — makeup. I stopped “No, actually. I’ve just used “Yes — hair. I get cheaper “I’ve definitely cut back on anything.” using Dior foundation and the same brand of cosmetics highlights and use a differ- hair products. I used to use – Moises R., 32, Mexico started trying the brands at I’ve used.” ent haircutter. I now go to a Garnier Fructis, but now I’ve Duane Reade.” – Marina K., 14, Brazil neighborhood where hair- just been using store brand.” – Rebecca M., 21, cuts are half the price of – Allison W., 21, New York what I was paying. I haven’t Massachusetts cut back on beauty prod- ucts though.” – Sandy C., 64, Brooklyn Heights, N.Y.

“No, I haven’t cut back.” “Yes, I’ve switched makeup “I’m one of those people if I “With hair care, I don’t care “No, I haven’t made any – Toni C., 23, and hair products. You have want something, I’ll get it. I how much. I I have cut changes. I really don’t Queens, N.Y. to go for a bargain, or what- don’t care about the price.” back with makeup though. put anything in my hair ever you find on sale, and – Hayley C., 17, Instead of going to , besides shampoo and not buy the more expensive I go to Duane Reade.” conditioner, and I just use brands on the market.” – Candey V., 23, mascara or shadow some- – Margaret D., 41, Brooklyn, N.Y. times for makeup.” New Jersey – Kristian V., 30, Bronx, N.Y.

Drug Store News www.drugstorenews.com June 2009 • 9