Beleaguered Dial cuts product lines

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New Dial Corp. Chairman-CEO Herb Baum is slicing brands and product lines as he looks to reverse what he said "we have kindly labeled as missteps" under prior management. But he also said Dial will also put marketing muscle behind new products next year for such core brands as Dial liquid hand soap, Purex laundry detergent and Renuzit air freshener.

Dial Corp. has discontinued its Nature's Accents specialty personal-care brand and cut an additional 180 stockkeeping units from its Sarah Michaels and Freeman Cosmetics brands. To the extent possible, Dial will attempt to reposition Freeman products under the Sarah Michaels brand, Mr. Baum said. All three brands were added within the past three years under former Chairman-CEO Malcolm Jozoff, who was ousted by Dial's board last month following Dial's third consecutive quarterly earnings warning.

SHOULD IMPROVE PROFITABILITY

The specialty personal-care cuts amount to about $32 million in annual sales, but should improve profitability, Mr. Baum said. The personal-care brands received $5 million in ad support last year, according to Competitive Media Reporting.

"It is a business that Dial didn't fully understand," Mr. Baum said. "It's very different from running evergreen, strong brand names that year-in, year-out you're selling pretty much the same products or improved versions. . . . The business is a fashion business."

Mr. Baum also appears ready to pull the plug on the Purex Advanced detergent brand launched earlier this year by its joint venture with German consumer products powerhouse Henkel. Dial has stopped production of Purex Advanced, which had built up a massive 15- to 20-week inventory backlog at major retail customers. Production may not be resumed, he said, though he has yet to meet with Henkel officials to discuss ultimate direction for the joint venture. That also leaves uncertain the disposition of the brand's $20 million Purex Advanced ad campaign from DDB Worldwide, New York.

"Adding high-tech to our Purex product line really flies in the face of what Purex stands for," Mr. Baum said. "It's a value brand."

But Dial will roll out Purex Double-Action Tabs early next year, most likely under the original blue-package Purex value brand, following Procter & Gamble Co.'s Tide and Unilever's Wisk into the tab segment (see story, Page S-8).

PUREX SHOOT-OUT

Although DDB currently handles all Dial advertising, the estimated $15 million account for the flagship Purex is in review. An executive familiar with the company's plans said the review has boiled down to a copy-testing shoot-out between DDB and BBDO, Chicago. Both agencies have produced TV spots for Purex tabs, and the assignment will go to the agency that gets the best audience-response score.

Mr. Baum was particularly enthusiastic about a new liquid Dial hand soap product that he said will roll out next year. It combines antibacterial properties, moisturizers, and improved foaming and rinsing action that he said would make it "the Colgate Total of its category." The dispenser is configured to accept only Dial refills, he said.

NEW FROM RENUZIT

Renuzit has lost sales to S.C. Johnson & Son's Glade and Reckitt Benckiser's Wizard brands in recent quarters because product development glitches made it late into the oil-burning air freshener segment, Mr. Baum said. But he said Renuzit will launch an oil freshener with an on-off switch next year.

Dial has had discussions about selling the company in whole or in part, but has yet to receive any attractive offers, he said. Another option would be combination with one or more similar-sized package-goods companies, such as Alberto-Culver Co., Playtex Products Co. or Rayovac Corp., Mr. Baum said, though he said the difficulty of overcoming management and ego differences make such a combination less likely than an outright sale of Dial.

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