P&G, marketer of $2 billion global behemoth Olay, earlier this year bought physician-skin-care brand Doctor's Dermatologic Formula, with estimated sales of only $40 million globally, from private-equity group North Castle Partners. It's backing DDF with a print campaign in women's magazines from WPP Group's Grey Global Group, New York, as it looks to see if a mass-skin-care company can develop a specialty/prestige brand starting with one small step.
Meanwhile, Unilever, which has concentrated on building Dove into a $2 billion-plus business in the past decade, has been benefiting from a stake in a small but fast-growing Finnish skin-care brand, Lumene. After a few years as a CVS private-label line, the brand branched into 1,500 Target stores earlier this year.
Both Lumene and DDF fill holes in the skin-care lineups of the giants. And with the credit crunch crimping private-equity players that have skin-care or other package-goods brands, strategic players such as P&G and Unilever should have a much easier time picking up promising starter brands.
|The two giants|
|Source: Company reports|
A P&G spokesman said the company's interest in DDF is more than experimental. "It's a brand that has heritage in that ... dermatologist-clinical space. ... Matching that with our R&D and our agency partners, we're really looking to take it to the next level."
Unilever has been more circumspect regarding Lumene Group, which the marketing giant indirectly acquired a part of in 2004 (Langholm Capital, a private-equity fund in which Unilever has a 40% stake, owns 33% of Lumene, so Unilever has a 13% stake in the brand). Lumene had sales of $187 million last year, $116 million of which came from the cosmetics brand.