NEW YORK — It has been a big week for a big furry cat.
Last week, Kimora Lee Simmons unleashed a line of jewelry bearing an oversized Hello Kitty head retailing for $20,000 to $80,000. This week — at the other end of the price spectrum — the 32-year-old feline will expand into beauty products created for midtier retailers such as Kohl’s and J.C. Penney.
Hello Kitty cosmetics items, produced by Townley Inc., have been a cornerstone of Target’s youth beauty presentation for several years. The glosses and sets are also sold at stores including Claire’s and Club Libby Lu.
Now, under a licensing agreement with Kid Care, the cat is getting into bath and body with plans for products to appeal to teens and tweens. “Beauty holds great potential and we see this new teen and tween line as a good way to take Hello Kitty to midtier,” said Bruce Giuliano, senior vice president of licensing for Sanrio, the owner of the Hello Kitty character, during a press conference to showcase hundreds of new licenses ranging from bikinis to bracelets. The styling of products shows Sanrio wants girls in the know: Sandals are inspired by Jack Rogers and beach bags are far from the typical licensed character offering.
Hello Kitty has loyal fans, many in the six- to 12-year-old age group who are on the prowl for grooming products. “We are creating this for a more mature audience and we want the products to help educate them about proper grooming,” said Gail Van Hoozier, director of retail business development. “We want to help empower them to make the right health decisions.”
The lineup includes lotions, washes, bath products, combination lotions and travel bags and a fragrance. The prices will range from $10 to $20.
There’s already a premium fragrance sold at Sanrio’s Momoberry store in the Beverly Center in Los Angeles, and the company is experimenting with other scents. At the store, consumers can have scents custom-blended or they can select a signature limited-edition blend. A similar table was set up at the press conference for attendees to pick favorite scents.
The Kid Care products, however, were created to help retailers such as J.C. Penney, Kohl’s and Mervyns forge a bigger beauty business. Sanrio envisions these retailers creating shop-within-a-shop concepts where the variety of licensed goods can be merchandised together. There are currently nearly 4,000 Hello Kitty licensed products from 120 licensees. Some items, such as the Hello Kitty toaster, even have a cult following among celebrities. Sales of Hello Kitty items surpassed the $500 million mark last year and are growing at a 20 percent per year clip.
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In mass, Hello Kitty is limited to Target, but Sanrio has other characters within the family, such as Cinnamoroll, currently being tested in chains such as Wal-Mart for apparel. Townley is also developing a high-end, more sophisticated collection of beauty items.
Sanrio’s Van Hoozier said there are opportunities to present exclusive merchandise for different retailers by positioning Hello Kitty differently. For example, for Club Libby Lu, Kitty can be a princess. For another chain, the feline could be decked out in yoga workout wear.
Licensed products have had ups and downs in the beauty department. Currently, celebrity licenses such as Britney Spears’ products are selling well. The Mary-Kate and Ashley line has also been a big hit. And of course, Barbie has always had a following for hair care and bath. But there have been those that hit a flat note. Pop diva Christina Aguilera’s Fetish wasn’t a must-have and an “American Idol” scent didn’t get voted in for a second season. Retailers hope Hello Kitty’s new litter of beauty products will help bring in more tweens and teens.
CVS caught many industry experts off guard earlier this week with its announcement to buy 700 stand-alone drugstores from Albertsons. The stores operate under the Sav-On and Osco banners and will cost CVS about $2.9 billion.
What is surprising is CVS’ willingness to digest more stores, especially after buying half of Eckerd just two years ago. However, with the acquisition, CVS nabbed two storied chains that have been instrumental in the growth of the entire drugstore industry. The heritage of these stores translates into sales exceeding $5 billion a year, and some of the units are among the best performers in the industry.
CVS also gains instant power in markets such as California, where the firm is still a relative newcomer. In Chicago, Osco is well known and the buy will help CVS meet local giant Walgreens on a more even playing field. From a beauty standpoint, the Osco and Sav-On stores were once powerhouses. Over the years, beauty took a backseat, especially under the direction of a grocery-oriented chain. CVS’ influence will enhance the presentation. The larger footprint of Sav-On and Osco (some stores are 20,000 square feet versus 10,000 square feet at CVS) could give CVS the chance to experiment with even larger, serviced beauty departments.