FORT LAUDERDALE, Fla. — Retailers attending ECRM’s Efficient Program Planning Sessions here this week face one of the biggest dilemmas of the past five years.
Do they keep faith in the megamanufacturers who want more space to launch new initiatives — even though many of these companies are not performing up to profit standards? Or, do they take a gamble on edgy, up-and-coming labels that are producing attractive growth rates but have little advertising and marketing support?
More than 100 retailers tried to seek the answer to that challenge as they trudged in and out of meetings with more than 65 manufacturers at the Marriott Harbor Beach Resort here. All agree something needs to be done to ignite sleepy sales. According to ACNielsen data, for the 52-week period ended July 11, sales were down 0.7 percent from $2.78 billion to $2.75 billion.
The major players, sensing inroads by niche marketers, are trying to bring innovation to the category to maintain and extend their space. Revlon, as reported, has asked for additional space for Almay’s overhaul and its new cosmetics collection, reportedly called Vital Radiance, aimed at mature shoppers. Several retail buyers also said L’Oréal is gearing up to unleash a high-pigment eye shadow line called HIP and, naturally, is also looking for more real estate.
At the other end of the spectrum, more tiny companies are emerging on the scene, perhaps more than at any time over the last 10 years. Following a successful debut at a spring trade show, Pantina is off to a fast start, according to Richard De Santis, vice president of sales. “Retailers believe we will bring incremental sales to the category,” he said of the line. Pantina, which has packaging inspired by upscale brands such as Nars or Stila, will consist of 72 items in its core line by spring 2006.
Another upscale line, called Elle LDL Elle, was introduced by Beauty Innovations, the maker of the American Idol fragrances. Already building steam in Europe over the last year, LDL will now be available to U.S. retailers. “Retailers like this line because it can provide them with a point of difference,” said Lee Silvas, president of Beauty Innovations. Silvas said he expects LDL to make inroads in the U.S. market over the course of 2006.
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After buying Jane Cosmetics from The Estée Lauder Cos. more than a year ago, Jane’s president and chief executive officer, Lisa Yarnell, and her team are charging full-steam ahead with innovative products such as ColorSticks, Max Lash and color-coded eye products, which began rolling out to stores in June. In April, the company will dabble in the skin care realm, with cosmetics kits that meld treatment and color. For example, an eye kit contains a firming eye gel, a whipped eye brightener and an eye shadow.
Introduced to the mass market a year ago, NYX (pronounced nix) is working to provide exclusivity to retailers via customized promotions and displays. NYX cosmetics, housed in Nars-esque black packaging, is looking to entice retailers with a stand-alone silver display table and a flurry of countertop displays. The company reported it will spend $1 million in advertising to support its mass market efforts this year.
Smart Brands is also slowly building its distribution with its budget brand called Ten and its youthful-looking line called Tru. Tru will soon roll out into 120 Duane Reade stores and Long Drug Stores. New for Smart Brands is a value cosmetics collection geared toward the more mature customer called Indulge, which recently launched in Wal-Mart Canada. The company is also creating private labels for five unnamed retailers.
Mirage Cosmetics is migrating from promotional display business in several key retailers to in-line space. The company’s budget cosmetics brands include Sinful — which Gene Spansavick from Price Chopper said was performing well — and Wild and Crazy.
Also hoping for its share of space is Palladio. Although Palladio is sold in 4,000 specialty doors — namely Ulta and Sally Beauty Supply — the company has selected one stockkeeping unit, Shine Off, a blotting paper, as a vehicle to expand mass market distribution.
Milani continues to get more space from slower moving lines thanks to its pricing and positioning as a brand for women of all colors. “We are looking for more space,” confirmed Robert Wallner, vice president of sales for Jordana & Milani Companies.
Intercos showed new componentry, including cubed collections and a large, clear pallet. “Everyone is looking for options to Markwins,” said Achim Ruehlemann, Intercos’ executive director of sales. The company also showed its cosmetics collection featuring the Elite model agency license, called simply Elite. The line is currently sold in France.
For many companies, licenses are propelling growth. Townley, for example, is extending its popular Hello Kitty franchise into a collectible line called Hello Kitty USA. In addition to beauty products, there are collectible kitty charms including a Surfer Kitty and a Cheesehead Kitty. Townley is also seeing growth with an inspirational line called Dear God Kids and is now rolling out a Precious Moments line.
Townley was among the first beauty companies to link up with young celebrities when it introduced Stuff by Hilary Duff. Now the company is readying the rollout of That’s So Raven cosmetics, based on Raven Simone.
Added Extras touted its licenses, including Trollz (Hasbro relaunched the dolls this year), Pepsi Vanilla, Mountain Dew and Sierra Mist. Lotta Luv reported that a good sign was that retailers were anxious for shipments. “Many buyers were looking for immediate shipping for back-to-school,” said Steph Fogelson, company president.