×

Once registered, you can:

  • - Read additional free articles each month
  • - Comment on articles and featured creative work
  • - Get our curated newsletters delivered to your inbox

By registering you agree to our privacy policy, terms & conditions and to receive occasional emails from Ad Age. You may unsubscribe at any time.

Are you a print subscriber? Activate your account.

Coporate Close-up: Revlon (chart) CHALLENGES COLOR FUTURE FOR REVLON STRONG BRAND BURDENED BY UNDERMARKETING, DEBT

By Published on .

Ever since Charles Revson's death in 1975, the common plaint has been that the Revlon founder must be turning over in his grave.

Disgruntled keepers of the flame have uttered those words after any company misstep, and the banality isn't about to vanish from the cosmetics industry's lexicon just yet.

Revlon Consumer Products Corp. boasts what many consider the strongest cosmetics brand name around.

Though generally ranked behind Procter & Gamble Co.'s Cover Girl and Maybelline in sales, "my own feeling is that Revlon has a stronger brand name than either," said Alvin Schechter, chairman-CEO of the Schechter Group, New York, a corporate identity subsidiary of Omnicom Group.

But critics contend the company is undermarketed, not growing fast enough and burdened by the more than $2 billion in debt of Revlon Consumer Products and holding company Revlon Worldwide. Sales increased only 3.3% in the first six months of 1994 to $758.1 million, including the marketer's Almay and Ultima brands. Revlon's increase was half of Maybelline Co.'s for the same period.

And there are questions about Chairman Ronald Perelman's commitment to cosmetics now that his New World Communications Group has a $500 million capital infusion from Rupert Murdoch, and TV programming impresario Brandon Tartikoff is running the New World Entertainment subsidiary.

"I think it's the company everyone in the trade wants to be successful and a company that always overpromises and fails to deliver," said one Wall Street analyst. "I have to believe this is no longer the priority it once was for Perelman in that he wants to be a media mogul."

Company executives are sensitive to speculation that with Revlon so highly leveraged, Mr. Perelman might walk away.

"Absolutely not," said Bill Fox, exec VP-chief financial officer. "Ronald Perelman and MacAndrews & Forbes [the Perelman investment group that owns Revlon Worldwide and Revlon Consumer Products] are firmly committed to Revlon."

Observed another company executive, "Ronald has never stumbled. Walking away from Revlon would be too public a stumble. It is a branded equity that as one of the most recognizable cosmetics companies in the world gives him credibility."

But even if Mr. Perelman is not about to pull a Donald Trump, his Revlon involvement is less hands-on than when he was married to gossip columnist Claudia Cohen in the '80s.

"They used to approve advertising, even the photographers. Now, you don't see his fingerprints in cosmetics to the extent you do in media," said one industry executive. "The exception being the Esquire flap."

Revlon recently yanked its ads from Hearst Corp. magazines, citing a change in ad rotation policy; Hearst blames an unflattering Esquire piece about Perelman paramour Patricia Duff.

Given Hearst's version, it may be just as well if Mr. Perelman has stepped back.

In the last 18 months, Revlon has recruited a number of executives. They include Revlon North America Chairman George Fellows, formerly of Colgate-Palmolive Co., and Exec VP-Marketing Kathy Dwyer, who held a similar position at Clairol. This summer, Linda Harris signed on as senior VP-new business development from assistant VP at L'Oreal.

From the start, Mr. Fellows' vision has been one of a more aggressive Revlon blending package-goods marketing with the creative empowerment of cosmetics advertising.

Techniques have included high-value in-store coupons accompanying seasonal color collection trends, packaged together in a brochure titled Revlon Report. Coupons also are running in magazines under the rubric of gift certificates and accompanied by samples of new products such as Age Defying Makeup, touted by actress Melanie Griffith.

Age Defying ads run under the umbrella theme of "Revlon Revolutionary," created by Tarlow Advertising, New York, earlier this year to in part signal new technologically based products.

Cost cutting took its toll last year on ad dollars, measured by Competitive Media Reporting at $46 million in 1993, down from the $60 million-plus level of '92. Revlon maintains media dollars were underreported, not reflecting barter advertising estimated at more than $10 million.

Mr. Fellows said despite Revlon's debt load "no marketing cuts are planned. We will be substantially up in 1994 and anticipate '95 will be again." He wouldn't disclose spending, but it was earlier estimated '94 media spending would rise 20% to 25%.

Key to those increases will be the company's ability to continue to accelerate sales growth while improving operating margins and working off debt.

According to Nielsen North America, Revlon share in its key lip color category has remained relatively flat from August 1993 to August 1994 at 18.4%. But Mr. Fox said total color cosmetics share for the year to date is up a full point to 17%. Fragrance share is much lower, 4% by some estimates.

Revlon hopes to improve that with new Fire & Ice fragrances and Charlie Red, already marketed overseas. That scent is the subject of a lawsuit from P&G, which is aggressively trying to protect its recently acquired Giorgio Beverly Hills' Red brand (AA, Aug. 29).

Mr. Fox said the company should be able to dramatically accelerate sales growth. It had better. Revlon President-CEO Jerry Levin has publicly forecast third-quarter sales for the privately held company will be up 10% from a year earlier.

Most Popular
In this article: