PLAYTEX HEARS OFFERS OF INTEREST FROM BUYERS
Company Could Be Sold Whole or in Parts
P&G PULLS AD FOR ALWAYS FEMININE-CARE BRAND
Said Decision Wasn't Based on NAD Ruling Citing Misleading Claim
TAMPON GIANTS ESCALATE COURT BATTLE
Playtex Files Second Suit Against P&G for False Advertising
TAMPON GIANTS SQUARE OFF FOR LEGAL BATTLE
Playtex Sues P&G Over New Product Rollout
"It's shameful, in my opinion, that a company of the size and reputation of a P&G would spend as much money in trying to just basically unseat a much smaller competitor in a category such as this and in our opinion resort to ... false and misleading advertising and the infringement of a patent of ours in order to take this kind of attack," said Playtex Products CEO Michael Gallagher, who began his career with P&G in the 1970s. "This is not the kind of ethical company I was used to when I worked for them."
"Our claims have been fully tested with women who used the product," a P&G spokeswoman said. "The [ad] statements are true and this will be proven in court." P&G also has denied it infringed Playtex's patents regarding plastic-applicator tampons.
A hearing on Playtex's motion for a preliminary injunction for the suit is set for next month in U.S. District Court in the Southern District of New York. A trial for Playtex's patent infringement suit against P&G is set for June 2004 in U.S. District Court in Cincinnati.
Sales down 20%
Playtex's tampon sales fell 20.2% in the first quarter to $48.8 million.
Overall, Playtex earnings fell 29.2% to $11.4 million for the quarter, or 19 cents a share on sales of $180.9 million, down 8.1%.
Mr. Gallagher went on to say that he estimates Tampax is spending $80 million in marketing and promotional support to launch Pearl, but stands to generate only $65 million in incremental sales, as 76% of Pearl's volume is coming from the Tampax base brand. With the heavy marketing spending, Mr. Gallagher estimates the Pearl launch will generate a $50 million loss in its first 12 months for P&G.
A P&G spokeswoman said P&G senior executives have spoken positively of Tampax Pearl on recent quarterly conference calls. Overall, Tampax's dollar share was up 5.1 points to 44.8% in the first quarter, Mr. Gallagher acknowledged, while Playtex's share was down 2.7 points to 25.3%.