By Published on .

Technological innovation is once again driving growth in the $2.3 billion mass-market cosmetics category, and so far, Revlon is technically the winner with a surge that far outstrips any of its rivals.

That's good news for Revlon, which is looking for a solid turnaround as investment banks up and down Wall Street believe parent Ronald Perelman's McAndrews & Forbes is shooting for an initial public offering, possibly by yearend.

For the 52 weeks ended April 30, Revlon cosmetics sales jumped 25.1% to $419.3 million for a market share of 18.4%, representing almost a 3-point gain from the year earlier period, according to Information Resources Inc.

For now that makes Revlon the No. 2 brand in the category, ahead of Maybelline and second only to Procter & Gamble Co.'s Cover Girl. That brand's growth rate, once the industry's gold standard, is now lagging the total category's 5.5% clip.

Helping to speed Revlon's rise: long lasting and transfer resistant lipstick called ColorStay. The name will be extended this fall to other cosmetics, including face makeup, with an estimated $25 million in network TV and print support from Tarlow Advertising, New York, under the "Revlon revolutionary" umbrella. The ad campaign began last year to mark the company's technological advances.

Revlon Exec VP-General Manager of Mass Cosmetics Kathy Dwyer said: "By addressing a consumer-need gap for women of all ages-lipstick that doesn't rub or smudge off-the result for us was incredible incremental lip share ....ColorStay share alone is almost three times the size of total Max Factor lipstick business and as big as the total Cover Girl lip business."

As ColorStay expands into a range of cosmetics products, Ms. Dwyer projects it will hit $180 million in U.S. sales, bigger than all of Max Factor and nearly two-thirds the size of L'Oreal.

While that may sound like hubris-indeed at least one competitor thinks Revlon has merely caught "a lucky break"-other longtime critics are converts.

"If they're able to flesh out other makeup categories and support them technologically, they'll be able to sustain the trend," said industry consultant Allan Mottus of Mottus & Associates.

Revlon's advance comes as some of its competitors appear to be struggling, prompting speculation of a future shakeout that could affect at least one P&G brand.

Through April 30, Cover Girl sales rose 3.7% to $513.9 million while market share slipped a fraction of a point to 22.6%. Sister brand Max Factor managed a 4.9% increase in sales to $150 million. But that didn't move the market share needle, which remains flat at 6.6% amid intense industry speculation that if growth doesn't accelerate, Factor will lose not only retail space but P&G support.

Indeed, said PaineWebber analyst Andrew Shore, "The real issue is whether [P&G] stays in this market."

P&G vows it's committed to cosmetics as a global business, and executives close to the company say it has begun a small test in Germany of Oil of Olay cosmetics under the Oil of Olaz brand. But there's at the least "a significant challenge ahead for P&G in the U.S., where Factor is soft and Cover Girl is showing only modest gains," said Jeffrey Hill, managing director of Meridian Consulting Group, Westport, Conn. "They are also trying to take other franchises into cosmetics like Olay but if their existing businesses do not show vitality that will affect that strategy."

In April, P&G executives contend, Cover Girl did start to move ahead again thanks to the impact of new-product technology and new ad campaigns with model Helena Christensen via Grey Advertising.

Among other top brands in the category, L'Oreal also was a winner, as sales increased 10.4% to $254.8 million, boosting share by a half point to 11.2%.

Meanwhile, Maybelline saw combined sales of classic Maybelline and the newer Revitalizing inch up 4.3% to $372.4 million as share eased 0.2% to 16.4%.

L'Oreal VP-Marketing Bill Reynolds said his company will spend more than $9 million on marketing this fall to introduce Colour Endure lipstick, another long lasting and transfer proof product. Publicis/Bloom handles.

Most Popular
In this article: