Overhaul: Revlon marketing getting a makeover

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Revlon is putting a renewed empahsis on marketing and branding.

The embattled New York-based hair-care and cosmetics marketer has a new CEO with more than two decades of experience at Coca-Cola Co., a company renowned for its focus on marketing; a new creative development and design executive with a resume that includes stints at advertising agencies, fashion houses and glossy magazine publishers; and a new advertising agency for its flagship Revlon brand.

Last week, Revlon announced Jack Stahl will replace Jeffrey Nugent as CEO. Last month, Revlon hired Rochelle Udell, former Fairchild Publications Internet president and a long time Conde Nast Publications executive, as exec VP-creative development and design. It is assumed she will be heavily involved in marketing decisions. Cheryl Vitali, exec VP-general manager for global Revlon marketing, left late last week. In late January, Interpublic Group of Cos.' Deutsch, New York, picked up creative and media-planning work on the Revlon brand in a consolidation move.

`great vision'

"We've got a great vision going forward," said Donny Deutsch, Chairman-CEO of Deutsch. "Revlon is a great brand. We'll mine what's in the brand ... to drive business." One year ago, the shop was awarded creative development on Almay, another Revlon brand, as well as media buying for both Almay and Revlon's portfolio brands. Revlon spent about $80 million on both brands from January to October 2001, according to Taylor Nelson Sofres' CMR.

But vision and new managerial talent may not be enough to stem continued market-share declines. "The company has to spend more money on marketing," said Arthur Roulac, high-yield research analyst at Banc of America Securities. The problem, Mr. Roulac said, is that highly leveraged Revlon "is spending a large amount of money to service its debt and is underspending on advertising and promoting its products."

According to figures compiled by ACNielsen, Revlon brands' market share dropped from 18.6% in the first quarter 2000 to 16% in the third quarter of 2001. Market share for Almay declined from 7.2% to 5.8% during the same time periods. Rather than increase dollars spent on consumer advertising and other marketing efforts to attract more customers, expenditures have stayed fairly flat throughout 2000 and 2001.

`Perennial disadvantage'

"That puts Revlon at a perennial disadvantage," said Mr. Roulac, because its competitors are larger, better-capitalized companies. Revlon's third-quarter 2001 sales dropped 5.1% to $327.2 million; sales for the first nine months ended Sept. 30, 2001 decreased 12.8% to $989 million vs. the one-year-earlier period. A Revlon spokeswoman points out that the declines are smaller when sales from sold businesses are excluded.

New advertising on the Revlon brands is expected to break in the next six weeks. Current celebrity spokeswomen Julianne Moore, Halle Berry and James King will be featured in spots that, according to executives close to the situation, use the "Be Unforgettable" tagline that was developed by former Revlon agency Kirshenbaum Bond & Partners, New York.

Fast Facts

Company: Revlon

CEO: Jack Stahl

Ad Agency: Deutsch, New York

2001 3Q sales: $327.2 million, down 5.1%

2001 Jan.-Sept. sales: $989 million, down 12.8%

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