NEW YORK — To keep pace with its cranked up innovation pipeline and trim costs, Revlon plans to reorganize its marketing group in a move that will eliminate 2.5 percent of its global workforce.
The company said Wednesday that it will consolidate its marketing operations, which include creative and brand groups and customer marketing — previously considered a sales function.
The newly integrated marketing group will be co-led by the company’s executive vice president and chief marketing officer, Stephanie Klein Peponis, and Rochelle Udell, executive vice president and chief creative officer for Revlon.
Revlon president and chief executive officer Jack Stahl said the realignment will allow the firm to be more nimble in responding to trends and in bringing products to the market, while furthering the company’s objective of “achieving long-term, profitable growth.”
The company expects to take a $10 million charge related to severance and additional expenses, which will primarily impact Revlon’s first quarter results. The firm expects the cost-cutting effort to generate $15 million, most of which will benefit 2006.
The bulk of the 165 job cuts, which include 90 U.S. employees, will come from the company’s marketing, sales and North American finance functions, said a company spokeswoman, who added that the cuts do not include any senior leadership positions.
The realignment is designed to speed decision making across its businesses, which currently include cosmetics, beauty tools, hair care and its newly created prestige fragrance division. Revlon, a company deeply entrenched in the mass market, announced last week that it will launch a prestige fragrance in department stores this summer, with more fragrance brands planned.
Revlon also backed its financial forecast for 2005 and 2006. The company expects adjusted earnings for 2005 to total $170 million, and full-year sales to increase nearly 3 percent to $1.33 billion, up from $1.29 billion in 2004.
The firm reiterated plans to conduct a $110 million rights offering that would allow stockholders to purchase additional shares of Revlon Class A common stock. The company expects to complete the offering by March 2006, and to use the proceeds to reduce debt.
Revlon also plans to conduct a $75 million equity issuance through an underwritten public offering by June 30. MacAndrews & Forbes, Revlon’s parent company, has agreed to extend Revlon Consumer Products Corp.’s existing $87 million credit line until the completion of the beauty firm’s equity issuance.
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Revlon stated it intends to seek an amendment to its bank credit agreement to maintain “financial flexibility throughout 2006.”
MAC’s Take on Fashion Week
NEW YORK — MAC Cosmetics plans to kick off Olympus Fashion Week by bringing a new spin to the apparel concept — creating fashion not out of fabric, but out of makeup and glitter alone.
The Estée Lauder division, the official makeup sponsor for the New York shows, plans MAC Chinese Dress, an event this evening at Eyebeam that celebrates both the heritage of Chinese fashion and the brand’s rapidly accelerating business in China.
About 50 MAC makeup artists will spend upward of eight hours applying body paint to a lineup of 14 nude male and female models. The finished product will portray traditional Chinese dress created from hundreds of MAC products and several thousand Swarovski crystals.
“It’s a way of respecting Chinese fashion and culture using makeup,” said Peter Lichtenthal, MAC’s newly installed general manager. “When we launched in Shanghai, we did a similar event which was very well received. We’re doing a version here because the concept is all about color and makeup and clothing, and MAC’s ability to utilize cosmetics in a creative and artistic way. It’s a perfect way to kick off fashion week.”
In fact, noted James Gager, the brand’s creative director, each market has the ability to customize the event to their needs. The Shanghai event included custom headdresses by couturier Stephen Jones, and designs from Oscar-winning art director/cinematographer/costume designer Tim Yip. The New York event will include designs created by Zac Posen, Vivienne Tam and Heatherette, and MAC is already planning a different version for its opening at the Paragon shopping center in Thailand next Wednesday. For that event, three prominent Thai designers will create looks.
“For MAC, this event celebrates the pure artistry of body painting as well as the articulation of makeup and fashion as an art form,” said Gager. “The Chinese Dress event is a perfect showcase for MAC and what MAC stands for, Makeup Art Cosmetics.”
— Julie Naughton