PARAGON BEATS P&G TO MARKET WITH SUPREME DIAPER

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The private-label industry will chalk up another win next month when Paragon Trade Brands unveils a new premium disposable diaper, beating Procter & Gamble Co. to the punch.

Paragon, the leading private-label diaper manufacturer, in November begins shipping a diaper that is similar to Kimberly-Clark Corp.'s Huggies Supreme. The Huggies product features Velcro attachment tabs, a clothlike outer cover and soon-to-be-added stretch side panels.

The competing diaper from the Federal Way, Wash., company has a mechanical closure, similar to the one used on Huggies Supreme. The private-label product also will have a cushy covering.

Paragon will use the term supreme on its packaging under the retailer name or under another label, Ultra Softs supreme diaper. No ad support is planned.

The diaper will be sold in medium, large and extra large sizes, priced about 20% lower than Huggies Supreme, the market's highest-price diaper that rolled national this year. A box of 40 of the smallest size has a suggested retail price of $7.99 to $8.29.

"Procter is late once again," said Lynne Hyman, analyst with First Boston Corp., New York. "What staggers me is that private label is immediately copying Huggies Supreme. Private label continues to move fast. Obviously Procter is struggling here and being forced to move on many fronts."

Ms. Hyman said Huggies Supreme is capturing about 5% of the market where it's available.

Kimberly-Clark's sales fell 3.3% to $1.4 billion for the 52 weeks ended Aug. 28, according to Information Resources Inc. Huggies led the $3.7 billion disposable diaper market with a 38.5% share. P&G's sales fell 7.7% to $1.37 billion for Pampers and Luvs, representing a 37.7% share.

In contrast, private-label sales grew 9% to $673.7 million for a record 18.4% share.

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