Coty Brings London to Teens Via Makeup Line

EXCLUSIVE: U.S. Debut of Underground Targets Largely Untapped Demo

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London's calling U.S. teens underground.

Coty is preparing to introduce Rimmel Underground cosmetics by spring '07, believing an extension of the British brand's rebellious Rimmel will attract a relatively untapped 15-to-21-year-old demographic much more keen on buying makeup than their parents were at that age.

"There is a huge body of disenfranchised young consumers that nobody is speaking to," said Stephen Mormoris, Coty senior VP-global marketing. Because the London culture from which Rimmel derives is very intriguing and appealing to young Americans, he said it makes sense to pilot Rimmel Underground here and talk to a young, clubbing demo in its own language.

'london lifestyle'

Aimed at premium department- and specialty-store consumers looking for a budget alternative to Estee Lauder's MAC or Benefit Cosmetics, Underground will tout its experimental, tribal-art-like looks via real London clubbers in online viral marketing efforts, in print ads and through new in-store looks with key retailers.

Mr. Mormoris said the online effort will be "embedded with editorial about the London lifestyle and what it means, weaving in use of Underground cosmetics in the context of a real young person's life instead of a rational product-benefit message."

NPD Group analyst Karen Grant said youth-targeted brands must talk directly to their target on sites such as MySpace and Facebook in a language that hits home. She cited Bonne Bell Co.'s Smackers lip-gloss line, which adopts text-messaging terms including lol ("lots of lips") and g2g ("got to gloss").

"The younger consumer is more involved with beauty than ever before, and if marketers aren't jumping on this now, they're missing what's going on in the marketplace," Ms. Grant said. An NPD study last year found that almost all of the 18-to-24-year-old consumers polled said they used skincare and makeup products in their teens; a much smaller percentage of their 35-to-44-year-old counterparts made the same claim (see chart).

Rimmel's sales over the 52 weeks ended Sept. 10 grew 56% to $29 million in food, drug and mass outlets excluding its primary outlet, Wal-Mart, according to Information Resources. With Wal-Mart and new channels included, the brand's U.S. sales are pegged at more than $100 million.

Coty likely will increase its ad spending in 2007 as it grows the brand globally, Mr. Mormoris said. The company plans to push its Beckham brand here and introduce several new fragrance licenses in the next six months. Coty spent $79 million on measured media in 2005, including $19 million dedicated to Rimmel, according to TNS Media Intelligence/CMR data.

The Underground effort is one of the first initiatives under Coty's new global marketing structure headed by Mr. Mormoris, a six-year Coty veteran tapped last month by CEO Bernd Beetz to help the beauty behemoth expand its growing portfolio of brands on both sides of the Atlantic.

global structure

"Previously, brands were more decentralized, with development driven out of one country and the export of that brand treated as an afterthought and supported on a more staggered timetable," Mr. Mormoris said. The new structure includes a New York office focused on "American DNA fragrances" such as Celine Dion and Nautica; a Paris office focused on European DNA fragrances including David Beckham and Miss Sixty; and a London office housing Rimmel. All the branches work with local marketing organizations and are overseen by Mr. Mormoris.

The global organization, Mr. Mormoris said, allows Coty to react more quickly to market trends-primary among them the trend of teens buying more makeup.
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