Vital Radiance Faulted in Revlon's Second-Quarter Losses

Boomer Cosmetic Brand Suffered Weak Sales and Low Ad Spending

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NEW YORK ( -- Revlon is blaming its Vital Radiance brand for $60 million of the $95 million it expects to lose in the second quarter of this year. In a conference call with analysts today, President-CEO Jack Stahl blamed weak sales of the new over-50 cosmetics brand in "large-format" retailers, presumed to be Wal-Mart and Target.
The Vital Radiance cosmetics is targeted at the over-50 demographic and faces strong competition from L'Oreal and P&G product lines.
The Vital Radiance cosmetics is targeted at the over-50 demographic and faces strong competition from L'Oreal and P&G product lines.

Turnaround hopes
Despite relying on the brand for what it hoped would be a turnaround this year, Revlon put little in the way of traditional media toward Vital Radiance's mid-January launch. TNS Media Intelligence/CMR numbers show Revlon spent only $700,000 on the brand during the first three months of 2006 as compared to Procter & Gamble's $9 million during the same period for its own brand for the over-50 set, Advanced Radiance. The P&G brand also received a measured-media outlay of $14.2 million last year.

'Strong competition'
"Revlon has been facing really strong competition from L'Oreal and from P&G's Advanced Radiance -- both of which really outspend Revlon," said Carrie Mellage, industry manager of consumer products for Kline & Co., New York.

Mr. Stahl admitted as much, saying, "Our efforts to create awareness for the new brand were not having the total impact that we had thought they would" given the competitive environment. As a result, Vital Radiance will be pulled from a number of Wal-Mart and Target stores, though Mr. Stahl maintains that the brand has been selling quite well in drug and food stores.

Advertising for Vital Radiance is handled by the Publicis Groupe's Kaplan Thaler Group, New York, which won the Revlon business (with the exception of its Almay brand, given to Arnell Group, New York) in March of 2005.

Analyst predictions
Going forward, analysts predict Revlon will cut costs and drive efficiencies to make Vital Radiance more profitable but won't increase spending.

The focus on food and drug retailers instead of the smaller number of large-format retailers that will carry the product demands a re-evaluation of the "marketing levers that are working to build awareness and trial," a company spokesman said.

The levers that have worked for the more regional food and drug chains and regional divisions of larger format stores are in-store media including circulars and print media, with TV reserved for brands that command a pervasive national presence in the top mass channels.
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