NEXXUS MOVES OUT OF SALON INTO MASS MARKET

Alberto-Culver Readies Major Marketing Push for Hair-Care Line

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CINCINNATI (AdAge.com) -- Alberto-Culver Co. will take its recently acquired Nexxus salon hair-care brand to mass retail early next year, the consumer product marketer said today.
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The longtime salon brand is the latest entry destined for crowded mass-retail shelves in recent years. Other brands include L’Oreal’s Garnier Fructis and Unilever’s Dove. Alberto-Culver acquired the Nexxus brand last year, leading to widespread speculation that it would move the brand to mass retail.

Diverted 'professional' brands
What’s less clear is how much consumers will notice the difference. Nexxus, like several other supposedly exclusive professional hair-care brands, already is heavily diverted by third-party distributors into the mass channel. Such diversion has become so rampant that Target, in a section reset earlier this year, devoted one of four rows of hair-care shelves primarily to diverted professional brands.

Alberto-Culver's president-CEO, Howard Bernick, made the announcement today the at Prudential Back to School conference.

'Significant' marketing support
Alberto-Culver intends to put “significant” marketing support behind the launch, Mr. Bernick said, adding that he expects premium-priced Nexxus can be as big as the company’s value-priced Alberto VO5 flagship brand, with annual sales of $200 million to $300 million, though not in the first year. Nexxus currently has sales estimated by analysts at $40 million annually.

The new 25- to 30-item Nexxus mass line will ship to retailers in January, with ads breaking in March or April, Mr. Bernick said. He didn’t provide details, but similar new-brand launches by L’Oreal, Unilever and Kao have gotten $50 million or more in marketing support in their first years.

Interpublic Group of Cos.’ Campbell-Mithun, Minneapolis, handles Nexxus creative. Kaplow Communications, New York, will handle public relations, and Aegis Group’s Carat, New York, handles media planning and buying.

Sales could reach $80 million
Nexxus will benefit from “relatively strong brand awareness” even before it officially becomes a mass brand, said Deutsche Bank analyst William Schmitz in a research note today. He estimated first-year mass sales of Nexxus would reach $70 million to $80 million.

Mr. Bernick said consumers have had “less success recently finding [Nexxus] in salons” as the brand faced increasingly tough competition from such L’Oreal professional brands as Redken and Matrix and Procter & Gamble Co.’s Wella, Graham Webb and Sebastian. Alberto will retain some professional-only Nexxus products, he said.

But the move helps extricate Alberto-Culver from a conflict involving those rival marketers, particularly L’Oreal, Mr. Schmitz noted. Alberto’s Sally Beauty stores and Beauty Systems Group distributors also distribute L’Oreal’s professional brands. P&G scaled back its involvement with the company by pulling its professional products out of Sally Beauty last year.

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