Revlon stagnates but looks to new launches and ad spend to drive future growth

By Andrew MCDOUGALL

- Last updated on GMT

Related tags Net sales Marketing Revlon

Revlon stagnates but looks to new launches and ad spend to drive future growth
Cosmetics company Revlon will look to new product launches later this year and will build upon its strong brands having tackled financial difficulties in the first quarter of 2012.

Net sales were $330.7m compared to $333.2m in the first quarter of 2011, although Revlon points out that excluding unfavorable foreign currency fluctuations of $4m, net sales increased $1.5m, or 0.5 percent.

The quarter benefited from higher net sales of Revlon color cosmetics and Revlon ColorSilk hair color, and the inclusion of the net sales of SinfulColors for a full quarter, however, these increases were partially offset by lower net sales of Almay color cosmetics and fragrances, as well as lower net sales in Venezuela due to the June 2011 fire at the Company’s local facility.

Brand building

“We continue to focus on driving top-line profitable growth and, in the first quarter of 2012, we grew net sales and delivered competitive margins,”​ said president and CEO, Alan Ennis.

“We remain focused on building our strong brands by launching and appropriately supporting innovative new products and we are pleased with our new product launches so far this year.”

In the US, the company has used a two-tier system of major launches throughout the year; one at the start, and one planned in June.

The first launch was towards the end of the prior year in December, to appear in store in December and January onwards. The second happens towards the end of the second quarter of the year, appearing from June onwards.

Advertising focus

As with other big cosmetic and personal care players such as L’Oréal and Procter & Gamble, Revlon has also put a focus on its marketing and advertising looking forward, with a focus on digital and social media as well as in-store activities.

“Our strategies for advertising promotion is to drive the new product introductions with the appropriate levels of total advertising promotion, and not include these point of sale activities,”​ said Steven Berns, CFO in a conference call.

“We always plan to do that through coordinated joint business funds to our key customers. So that’s another key part of the equation that these are all related to what customers are doing and what way they’re doing.”

In terms of product testing, Revlon claims it has extensively tested all of its new products before launching them, and this includes the advertising of these new products.

“Over the last five years, advertising test scores have consistently returned, so [we are] very happy with the effectiveness of our advertising,”​ added Berns.

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