WELLA PLOTS RETURN TO U.S. RETAIL MARKET

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DARMSTADT -- Cosmetics and hair-care group Wella is investigating routes to re-enter the U.S. consumer market after retreating unprofitably in the mid-1990s.

Chief executive Heiner Guertler revealed the plan in an interview with German daily newspaper Handelsblatt.

Should organic growth appear too difficult, acquisitions could be an option. These would possibly be financed by an initial public offering of shares of Wella's cosmetics arm, Cosmopolitan, or via stock regained in Wella's share buyback program, Mr. Guertler suggested.

The company's recent bid for U.S. hair-care brand Clairol stumbled over the high price asked, he said.

The Wella name is already known in the U.S. It's active in the U.S. professional hair-care business and last year bought ethnic brands Ultra Sheen and Soft Sheen from Carson Products, New York.

Wella products are currently sold through the German company's 48 subsidiaries in 150 countries across the globe. But Mr. Guertler has set himself ambitious targets at home, too.

Wella's share of its domestic market is just 5%, behind L'Oreal, Lever Faberge and Procter & Gamble Co. The aim is to boost retail sales by 15% each year until 2005.

In March, the company moved the $100 million account for the Wella brand to Select Communications, Koblenz. Cordiant Communications Group's Bates Worldwide adapts the work in several markets where Select has no office. -- Dagmar Mussey

Copyright May 2001, Crain Communications Inc.

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