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The Top 50: Our Annual Summer Blockbuster
Okay, okay, maybe we didn’t invent the Summer Blockbuster. After all, Jaws hit the silver screen back in 1975 and The Top 50 didn’t debut until 1978. But there’s no denying the fact that The Top 50, Happi’s review of the leading U.S.-based companies, has become a popular addition to the summer reading lists of many executives in the household and personal product industry.
Well, the reviews are in for fiscal 2005 and while a few companies such as Procter & Gamble, Johnson & Johnson and Coty all get a “thumbs-up” for the results that they’ve posted in 2005 and the first half of 2006, many of the biggest companies in The Top 50 have less-than-stellar reviews to report. Avon and Sara Lee are in the process of reorganizing, and sales at S.C. Johnson and Limited Brands are stalled at or near previous year levels.
New product launches are getting mixed reviews as well. By now, nearly every personal care company has launched an anti-aging line and many of them contain the same ingredients. Where is the new idea that will drive market growth in the future? A lot of industry observers predict that supplements will come to dominate the beauty segment, along with natural-based products and at-home spa concepts. In household cleaning, any product that can get chores done faster and easier will be welcomed by consumers—just don’t expect them to pay a lot for these products.
Aside from new product launches, there’s been a lot of maneuvering behind the scenes as well. Just last month, Alberto-Culver announced plans to spin-off its Sally Beauty division. Meanwhile, Pfizer accepted Johnson & Johnson’s $16.6 billion bid for its consumer healthcare business. Analysts had expected the unit—which includes well-known brands such as Listerine, Visine and Purell—to come with a price tag of $15 billion or so. But the price rose as J&J was forced to outbid rivals such as GlaxoSmithKline and Reckitt Benckiser. Just goes to show you what some companies are willing to pay for tried-and-true brand names.
Procter & Gamble, as it has since The Top 50 premiered, is No. 1 on our list, while Colgate-Palmolive is a distant No. 2. Rounding out the top 10 are S.C. Johnson, Estée Lauder, Avon Products, Ecolab, Johnson & Johnson, Alberto-Culver, Access Business Group and Coty.
We hope you enjoy this edition of The Top 50. As always, we welcome your comments on our ranking, as well as anything else that appears in Happi. Be sure to read our August issue, which will include The International Top 30, our annual look at the largest manufacturers of household and personal products with corporate headquarters outside the U.S.
The Top 50
| 1. Procter & Gamble | Cincinnati, OH | $40 billion | |
| 2. Colgate-Palmolive | New York, NY | $9.9 billion | |
| 3. S.C. Johnson | Racine, WI | $6.5 billion | |
| 4. Estée Lauder | New York, NY | $6.3 billion | |
| 5. Avon | New York, NY | $5.6 billion | |
| 6. Ecolab | St. Paul, MN | $4.5 billion | |
| 7. Johnson & Johnson | New Brunswick, NJ | $4.0 billion | |
| 8. Alberto-Culver | Melrose Park, IL | $3.2 billion | |
| 9. Access Business Group | Ada, MI | $2.9 billion | |
| 9. Coty | New York, NY | $2.9 billion | |
| 11. Johnson Diversey | Sturtevant, WI | $2.8 billion | |
| 11. Limited Brands | Columbus, OH | $2.8 billion | |
| 13. Clorox | Oakland, CA | $2.4 billion | |
| 14. Mary Kay | Dallas, TX | $2.2 billion | |
| 15. Sara Lee | Chicago, IL | $1.9 billion | |
| 16. Church & Dwight | Princeton, NJ | $1.4 billion | |
| 17. Revlon | New York, NY | $1.3 billion | |
| 18. Pfizer | New York, NY | $1.2 billion | |
| 19. Blyth | Greenwich, CT | $1.0 billion | |
| 20. Elizabeth Arden | Miami Lakes, FL | $920 million | |
| 21. Huish | Salt Lake City, UT | $750 million | |
| 22. Yankee Candle | South Deerfield, MA | $601 million | |
| 23. Schering-Plough | Kenilworth, NJ | $537 million | |
| 24. Acuity | Atlanta, GA | $535 million | |
| 25. Nu Skin | Provo, UT | $484 million | |
| 26. John Paul Mitchell Systems | Beverly Hills, CA | $460 million | |
| 27. Jafra | Westlake Village, CA | $430 million | |
| 28. Markwins | City of Industry, CA | $325 million | |
| 29. Del Labs | Uniondale, NY | $311 million | |
| 30. Combe | White Plains, NY | $300 million | |
| 31. Prestige Brands | Irvington, NY | $296 million | |
| 32. Chattem | Chattanooga, TN | $279 million | |
| 33. Phoenix Brands | Stamford, CT | $275 million | |
| 34. WD-40 Company | San Diego, CA | $263 million | |
| 35. Playtex | Westport, CT | $250 million | |
| 36. Liz Claiborne | New York, NY | $210 million | |
| 37. Orange Glo | Greenwood Village, CO | $200 million | |
| 38. Parlux | Fort Lauderdale, FL | $182 million | |
| 39. Turtle Wax | Chicago, IL | $178 million | |
| 40. Herbalife | Los Angeles, CA | $163 million | |
| 41. NCH | Irving, TX | $150 million | |
| 42. OPI | N. Hollywood, CA | $123 million | |
| 43. BeautiControl | Carrollton, TX | $122 million | |
| 44. Bonne Bell | Lakewood, OH | $120 million | |
| 45. Gojo | Akron, OH | $105 million | |
| 46. Burt’s Bees | Durham, NC | $100 million | |
| 46. Merle Norman | Los Angeles, CA | $100 million | |
| 46. Rochester Midland | Rochester, NY | $100 million | |
| 46. Spartan | Maumee, OH | $100 million | |
| 50. State | Cleveland, OH | $99 million | |
1. Procter & Gamble
Cincinnati, OH
513.983.1100
www.pg.com
Sales: $40 billion for household, personal and oral care products. Corporate sales: $56.7 billion. Net income: $7.2 billion for the year ended June 30, 2005.
 A.G. Lafley |
P&G Beauty—Susan E. Arnold, vice chairman, P&G Beauty; Heiner Gürtler, group president, global prestige and professional care; Paolo De Cesare, president, global skin care, personal cleansing and deodorants; Christopher de Lapuente, president, global hair care; Carsten Fischer, president, global professional care; Melanie Healey, president, global feminine care; Hartwig Langer, president, global prestige products.
Family Health—R. Kerry Clark, vice chairman, P&G Family Health; Mark A. Collar, president, global pharmaceuticals and personal health; Charles E. Pierce, president, global oral care; Martin Riant, president, global baby and adult care; David S. Taylor, president, global family care.
Household Care—Bruce L. Byrnes, vice chairman, P&G Household Care; Dimitri Panayotopoulos, group president, global fabric care; Jorge S. Mesquita, president, global home care; Richard G. Pease, senior vice president, human resources, global household care.
Global Operations: Robert A. McDonald, vice chairman, global operations; Werner Geissler, group president, central and eastern Europe, Middle East and Africa; Laurent L. Philippe, group president, western Europe; Robert A. Steele, group president, North America; Ravi Chaturvedi, president, northeast Asia; Deborah A. Henretta, president, ASEAN, Australasia and India; Daniella Riccardi, president, greater China; Jorge A. Uribe, president, Latin America.
 Susan E. Arnold |
New Products: Beauty care—Olay Quench hand and body lotions, Olay Anti-Aging, Olay Moisturinse in-shower body moisturizer, Olay Touch of Sun, Olay Ribbons bodywash, Pantene Pro-Health, Pantene Color Expressions, Nice’n Easy Root Touch Up, Aussie Aussome Volume, Clairol Natural Instincts Shine Happy, Lacoste Touch of Pink fragrance. Oral care—Crest Pro Health Rinse, Crest Whitening plus Scope Extreme, Crest Whitestrips Renewal. Personal care—Kandoo for Toddlers, Zest Tangerine-Mango Twist bar soap and bodywash. Fabric care—Tide with a touch of Downy, Tide Coldwater and Downy Simple Pleasures, Downy Plus Whitening, Gain Joyful Expressions. Home care—Febreze Air Effects, Febreze Noticebles, Mr. Clean Magic Reach, Swiffer Carpet Flick.
 Olay Ribbons bodywash is the latest extension of the best-selling Olay skin care brand. |
Last year, P&G renamed its three global business units (GBU): P&G Beauty, P&G Family Health and P&G Household Care. Each GBU and the market development organization is led by a vice chair, all of whom report to the CEO. Moreover, the acquisition promises to give P&G better balance. Company executives said that with the acquisition of Gillette, about half of P&G’s sales will come from baby, family and household categories and half will come from beauty and health businesses. Gillette has also boosted P&G’s long-term outlook. The company now expects annual growth of 5-7%, up from 4-6%, through 2010.
While the Gillette acquisition will provide a big jolt to P&G’s 2006 results, the company did just fine on its own in 2005. Corporate sales rose 10% last year, with every GBU delivering volume growth of 8% or better. With the acquisition of Gillette, the company now boasts 22 billion-dollar brands with Dawn dishwashing liquid cracking the billion-dollar mark in fiscal 2005. Looking ahead, P&G had 13 global brands with sales of $500 million or more, and many of them are expected to top the $1 billion mark in the coming years.
By region, North America accounted for 48% of 2005 sales, followed by western Europe, 24%; emerging markets, 23% and northeast Asia, 5%.
By business sector, the beauty division posted its third consecutive year of double-digit growth in sales, profit and volume. Sales reached $19.5 billion, and net earnings climbed to $2.9 billion. The company credited the gains to organic growth in all geographies encompassing several brands. For example, Pantene, already the world’s leading hair care brand with more than $2 billion in sales and more than 10% global share, posted 13% volume growth. Head & Shoulders, the No. 2 shampoo brand in the world, grew volume 15%, achieving record global market share of nearly 10%. Olay, one of P&G’s fastest growing billion-dollar brands, grew global volume nearly 30%, driven by continued momentum of the Regenerist and Total Effects lines, and new innovations like Olay Quench, a hand and body moisturizing treatment with superior skin benefits. In addition, the prestige and professional business posted strong top-line gains with global sales improving more than 10%. P&G Beauty also has a strong stable of potential billion-dollar brands with sales in the range of $500 million to $1 billion that are driving growth. Hugo Boss, along with Lacoste—which is now 10 times bigger than when P&G acquired the license in 2001—further strengthened its global leadership position in men’s fine fragrances. SK-II, a prestige skin care brand, grew volume 13% behind innovations such as De-Wrinkle Essence and Facial Lift Emulsion.
But not every beauty category was a success story. Growth last year in U.S. hair care did not meet expectations. As a result P&G will cut underperforming brands. In hair colorants, the company is rebuilding its innovation pipeline.
Household care sales rose more than 9% to $18.4 billion, but net earnings were flat at $2.5 billion. Volume improved 8%. Household care represents about 33% of the company’s sales and earnings, and contributes some of the highest margins in the company. Tide and Downy both posted double-digit sales gains. But profit margins were affected by high commodity costs in several businesses. For example, in fabric care and home care, P&G increased its list prices in markets where the competitive environment would allow. Yet, the benefits from the price increases began to impact the company’s results late in the fiscal year and only partially offset higher materials costs. In addition, P&G implemented many new internal cost savings programs in all areas of the business to help reduce the need to raise consumer prices for its brands.
Growth remained strong in fiscal 2006. For the third quarter ended March 31, P&G’s sales rose 21% to $17.2 billion. Organic sales increased 6%. Net income was up 37% to $2.2 billion. For the nine months, sales jumped 19% to $50.3 billion. Net income improved 23% to $5.5 billion.
2. Colgate-Palmolive
New York, NY
212.310.2000
www.colgate.com
Sales: $9.9 billion for oral, personal and home care products. Corporate sales: $11.4 billion. Net income: $1.3 billion.
Key Personnel: Reuben Mark, chairman and chief executive officer; Ian M. Cook, president and chief operating officer; Javier G. Teruel, vice chairman; Michael J. Tangney, executive vice president and president, Colgate-Latin America; Stephen C. Patrick, chief financial officer; Andrew D. Hendry, senior vice president, general counsel and secretary; Esmond Alleyne, vice president, global information technology.
 Colgate keeps expanding its winning Softsoap franchise. |
New Products: Oral care—Colgate Propolis and Colgate Luminous toothpastes, MicroSonic toothbrush and Colgate 360° toothbrush. Personal care—Palmolive Aroma Crème, Speed Stick 24/7 deodorant with micro-absorbers, Irish Spring MicroClean bar soap, Softsoap Kitchen Fresh Hands and Softsoap Shea Butter liquid hand soaps, Softsoap Pure Cashmere moisturizing body wash, Speed Stick deodorant with Irish Spring scents. Home care—Palmolive with Bleach Alternative, Ajax Ruby Red Grapefruit and Palmolive Oxy Plus dish liquids.
Comments: Corporate sales rose 7.5%—the fastest gain in a decade—and net income improved 2%. Yet, gross margin, that all-important measuring stick for Colgate-Palmolive, actually dropped 70 basis points to 54.4%. Advertising costs rose 12% to nearly $1.2 billion.
At the same time, the company remains committed to cost-cutting as part of its four-year, 2004 restructuring program. During 2005, Colgate was focused on developing a global supply chain with fewer, more sophisticated state-of-the-art global and regional manufacturing centers. Colgate is consolidating business support functions for subsidiaries around the world into global and regional shared service centers. Globalizing procurement, another important element of the 2004 restructuring program, is achieving significant savings for raw and packaging materials as well as for indirect purchases such as personal computers, telecommunications, printed materials, advertising and promotion. Colgate expects to save $325-$400 million by 2008.
Last year, sales in the oral, personal and home care segments rose 8% to nearly $9.9 billion. Volume rose 5.5%. More specifically, by product category, oral care accounted for 38% of corporate sales, followed by home care (26%), personal care (23%) and pet nutrition (13%).
Within the oral, personal and household care businesses, Colgate divides its sales on a regional basis. Europe accounted for 24% of sales, followed by Latin America (23%), North America (22%), Asia/Africa (18%) and Australia (13%).
European sales increased 4.5% and unit volume improved 6.5%. In both cases, the Gaba acquisition provided a 4% boost. Gaba is Colgate’s therapeutic oral care company in Europe. According to the company, Gaba achieved broad consumer acceptance and a leading position in the pharmacy channel by working closely with the oral health care community. In Italy, for example, Gaba’s pharmacy toothpaste market share has grown from 6.8% to 19% during the past six years with a strategy that emphasizes professional endorsement and clinical effectiveness and focuses on developing long-term partnerships. The Gaba program targets dental professionals, pharmacists, universities and dental students and is now being expanded throughout the Colgate organization.
 Icy Surge is the newest extension to the Speed Stick line. |
In North America, Colgate’s sales rose 8% and unit volume was up 6.5%, but those results exclude the divested laundry detergent businesses. During the year, the company expanded its No. 1 position in the U.S. toothpaste market to a record 35.3% share. Sales and operating profit increased 5.5% and 3%, respectively, as higher sales were partially offset by an increased level of advertising and higher raw and packaging material costs.
Finally, in Asia/Africa, unit volume was up 6%, sales rose 6.5% and operating profit increased 3%. The company said Colgate Max Fresh and Colgate Vitamin C Fresh toothpastes and the Colgate 360° manual toothbrush drove growth in oral care throughout the region.
Nearly a year ago, Colgate sold its North American and southeast Asian heavy-duty laundry detergent brands. They included such well-known names as Fab, Dyna- mo, Artic Power, ABC, Cold Power and Fresh Start.
For the first quarter of 2006, Colgate’s worldwide sales and unit volume, as reported including divestments, grew 4.5%. Excluding divestments, worldwide sales and unit volume grew 7%. Increased global pricing of 1.5% was offset by negative foreign exchange of 1.5%. Top line growth was supported by record level advertising spending. Reported net income was $324.5 million.
As reported, gross profit margin was 54.5%. Excluding restructuring charges, gross profit margin was 56.3%, reaching an all-time record and a 110 basis point improvement versus the previous year’s quarter.
“We are very pleased to begin 2006 with excellent top and bottom line growth, exceeding expectations and building on the strong growth momentum we saw in 2005,” said Reuben Mark, chairman and CEO. “We are especially encouraged by the 110 basis point improvement in gross profit margin during the quarter, to an all-time record and the largest quarterly gross profit increase in over three years. This increase, aided by our ongoing savings programs, the benefits from restructuring, increased pricing and a continued shift toward higher margin products, allowed us to fund a double-digit increase in advertising supporting Colgate brands, while at the same time delivering a double-digit increase in earnings per share.”
Company executives noted that unit volume in oral care was up significantly in every geographic division, and was up 10% worldwide.
According to Ian Cook, president and COO, the company’s global toothpaste leadership continues to expand with market share increases both in the U.S. and in key countries around the world. Colgate’s worldwide growth in manual toothbrushes also continues to strengthen, with global market share reaching another record high.
“Colgate’s fundamentals are very strong. Despite sharply rising energy costs, we expect our gross profit margin, before restructuring charges, to be up nicely for the year as a result of our ongoing cost-savings initiatives, improved pricing, restructuring and promotional savings,” added Mr. Mark.
By region, North America accounted for 22% of first quarter sales. The region reported a 1.5% gain in sales and a 1% increase in volume. The marginal increase was due to the sale of the North American detergent business. The good news is that Colgate’s leadership of the U.S. toothpaste market continues to grow, with its ACNielsen market share reaching 36.5% year to date, up 30 basis points versus the year ago period and over three share points ahead of the number two competitor.
In the U.S., new products are generating strong volume and market share growth. In oral care, strong growth in Colgate Luminous and Colgate Max Fresh toothpastes and Colgate 360° manual toothbrush contributed to the share gains. New products contributing to growth in other categories include Ajax Ruby Red Grapefruit and Palmolive Oxy Plus dish liquids, Irish Spring MicroClean bar soap, and Softsoap Kitchen Fresh Hands and Softsoap Shea Butter liquid hand soaps.
Latin America accounted for 24% of sales in the first quarter. Dollar sales grew 17.5% in the first quarter to a record level. Unit volume for the region grew 7% on top of excellent growth in the year ago period. All 18 countries in the region contributed to the strong volume gains, led by Brazil, Mexico, Venezuela, Colombia, Central America and Argentina. Positive foreign exchange added 4% and higher pricing contributed 6.5%. Latin American operating profit increased 29%, to an all-time record level even after a strong double-digit increase in advertising behind Colgate brands during the quarter.
Colgate continues to build its strong leadership in oral care throughout Latin America with toothpaste market share gains seen in nearly every country in the region, reaching record highs in Venezuela, Colombia and Ecuador. New products contributing to these gains include Colgate Max Fresh and Colgate Sensitive Whitening toothpastes and the relaunch of Colgate Total toothpaste with new packaging and strong advertising highlighting the toothpaste’s ability to provide complete 12-hour protection while actively fighting 12 teeth and gum problems.
Europe/South Pacific accounted for 24% of sales in the first quarter. Volume grew 8%, excluding divestments, and strong gains in the UK, Germany, Denmark, Spain, Italy, Ireland, Greece, Holland, Poland, the Baltic States, Hungary and Australia more than offset challenging economic conditions in France. However, dollar sales in the region, excluding divestments, declined 3.5%, as strong unit volume growth was more than offset by 9% negative foreign exchange and negative pricing of 2.5%. As reported, Europe/South Pacific sales declined 4% and unit volume grew 7.5%. Colgate maintained its oral care leadership in Europe, led by toothpaste market share gains in the UK, Spain, Greece, Ireland, Holland, Austria, Poland, Czech Republic, Slovenia and Bulgaria.
Greater Asia/Africa accounted for 17% of sales. In the first quarter, sales and unit volume, excluding divestments, grew 8.5% and 7%. Strong volume gains were recorded in India, Vietnam, Hong Kong, Malaysia, Thailand, Russia, Ukraine, Turkey, Saudi Arabia, the Gulf States and South Africa. Greater China volume was even with the very strong 18% growth in the year ago quarter, with dollar sales up in the mid single-digits. Colgate strengthened its oral care leadership in the region, led by toothpaste market share gains in greater China, India, Hong Kong, Russia and Turkey. Regional toothbrush market shares for the Colgate equity reached a record high during the quarter. Successful new products driving the oral care growth include Colgate Max Fresh, Colgate Propolis and Darlie Tea Care toothpastes, Colgate 360° manual toothbrush and Colgate MicroSonic battery-powered toothbrush.
In May, Colgate completed the acquisition of 84% of Tom’s of Maine for approximately $100 million.
“We are excited to move forward on this opportunity to enter the fast-growing naturals category with Tom’s of Maine, the No. 1 brand in oral care and a leader in personal care in that category,” said Mr. Mark. “This strategically important acquisition gives us access to a loyal, emerging consumer group and allows us to accelerate the growth of Tom’s of Maine by extending its reach in the U.S. and in Colgate’s strong markets outside the U.S.”
3. S.C. Johnson
Racine, WI
262.260.2000
www.scjohnson.com
Sales: $6.5 billion for the year ended June 30, 2005, but that total includes sales of food management products such as Ziploc storage bags.
Key Personnel: H. Fisk Johnson, chairman and chief executive officer; Jane M. Hutterly, executive vice president, worldwide corporate and environmental affairs; Darcy Massey, senior vice president, worldwide manufacturing.
Chief Scientific Officer: Richard S. Hutchings, Ph.D., senior vice president, worldwide, research development and engineering.
Chief Marketing Officer: David L. May, president, North America.
 S.C. Johnson’s new Glade Glass Scents fragrance dispensers. |
New Products: Pledge Duster Plus, Pledge Dust and Allergen, Glade Glass Scents, Glade Scented Oil Candle, Windex Multi-task Sparkling Lime; Windex Dry Microfiber Cloths, Scrubbing Bubbles Automatic Shower Cleaner, Ziploc Double Zipper Seal, Ziploc Big Bags, Off! Skintastic Insect Repellent Clean Feel, Off! Active Insect Repellent IV.
Comments: After surging 18% in 2004, sales were flat last year for privately-held S.C. Johnson. Still, the company made several notable moves in environmental stewardship and was honored with a variety of awards for social consciousness.
On Nov. 1, S.C. Johnson started a 3.2 megawatt gas turbine/generator at its Waxdale, WI manufacturing plant. The natural gas-powered turbine is the second of two now operating at the company’s largest manufacturing facility in Racine, WI. Generating a total of 6.4 megawatts of electrical power, the two turbines meet the facility’s daily base-load electrical demand while recovered heat from the turbines’ exhaust also produces nearly 40,000 pounds per hour of plant steam.
The startup made S.C. Johnson the first consumer goods packaged plant in the Midwest to produce nearly all of its own energy through clean-burning technologies. The twin turbines are fueled by natural gas and waste methane generated by the Kestrel Hawk Landfill located near the Waxdale facility. As a result, the turbines have significantly reduced S.C. Johnson’s usage of heavily-coal dependent electricity along with emissions of carbon dioxide, greenhouse gases and other pollutants in southeastern Wisconsin.
In January, for the second year in a row, S.C. Johnson was listed in the Top 10 of the “100 Best Places to Work For” in America, according to Fortune. The company ranks 10th on this year’s list.
“As a family company, S.C. Johnson’s unique culture is based on respect, fairness, inclusion and fun in the workplace,” said S.C. Johnson chairman and CEO Fisk Johnson. “Our ranking on the list is based in large part on the opinions of the people who work here, and that means a great deal to me that those working at the company truly feel that SCJ is a great place to work.”
In addition to the Top 10 overall ranking, S.C. Johnson was also recognized for paid sabbaticals, telecommuting, excellent compensation practices and unusual perks such as retiree lifetime memberships to the company’s fitness and aquatic center. S.C. Johnson was also commended for its devoted workforce and low turnover rate of 2%.
 S.C. Johnson’s Automatic Shower Cleaner with Scrubbing Bubbles makes cleaning the shower easier than ever. |
In May, S.C. Johnson’s operations in France and the UK were named on the list of 100 Best Workplaces in Europe. The company received the Awards at the Best Workplaces in Europe Conference and awards dinner at the German Ministry of Foreign Affairs in Berlin on May 17.
“It’s great to receive this recognition as it reflects that our people value our unique culture, and the programs and policies that support and sustain it,” said Mr. Johnson. “As a family company, S.C. Johnson is committed to maintaining a working environment where our people feel truly valued and respected for what they do every day to ensure we remain a global leader in our industry.”
The European List of Best Workplaces is selected from the companies appearing on the national Best Workplaces lists in each of 15 European countries that participate. This is the first time that S.C. Johnson’s operation in the UK has made the prestigious list after it ranked 10th on the country’s Best Workplaces list. It is the third time the company’s business in France, which placed second on their national list, has been named a top workplace in Europe. S.C. Johnson Germany and S.C. Johnson Italy were also recognized on their individual country’s Great Place to Work lists.
“To have two of our operations recognized as among the Best Workplaces in Europe is testament to the importance of building trust, no matter where people work,” said Patrick O’Brien, president for S.C. Johnson in Europe and Africa/Near East. “Our focus on creating innovative products within an open and supportive working environment encourages the most talented people to join and stay at S.C. Johnson, which ensures our continued success.”
4. Estée Lauder
New York, NY
212.572.4200
www.esteelauder.com
Sales: $6.3 billion. Net income: $406 million for the year ended June 30, 2005.
Key Personnel: Leonard A. Lauder, chairman; Ronald S. Lauder, chairman, Clinique Laboratories; William P. Lauder, president and chief executive officer; Patrick Bousquet-Chavanne, group president; Cedric Prouvé, group president, international; Philip Shearer, group president; Daniel J. Brestle, chief operating officer; Amy DiGeso, senior vice president, global human resources; Evelyn H. Lauder, senior corporate vice president; Harvey Gedeon, executive vice president, global research and development/corporate product innovation; Malcolm Bond, executive vice president, global operations; Richard W. Kunes, executive vice president, chief financial officer; Sara E. Moss, executive vice president, general counsel and secretary; Sally Susman, executive vice president, global communications.
 Estée Lauder is appealing to a younger consumer base with the introduction of Sean John and other brands. |
New Products: Estée Lauder—Perfectionist Power Correcting Patch, Go Tan Air-Brush Self-Tan Spray for Body, DayWear Plus SPF 30, Pure White Linen, Tom Ford Estée Lauder Azuree Collection, High Gloss, Illusionist Intense Mascara, Pure Color EyeShadow. Aramis—Vintage Edition Set. Clinique—Pore Minimizer Thermal Active Skin Refiner, Kohl Shaper for Eyes, Repairwear Eye Cream, Repairwear Intensive Lip Treatment, Repairwear Makeup, SSFM Lip Balm SPF 15, SSFM Electric Shave Primer, Take the Day Off Cleansing Balm, Colour Surge Butter Shine Lipstick, Blushing Blush, Pore Minimizer Oil-Blotting Sheets, Turnaround Concentrate, Turnaround 15-Minute facial, Liquid Facial Soap, All About Eyes Concealer, Eye Definer Brush, Super City Block SPF 40, Derma White line (limited distribution), Perfectly Real Compact Makeup, SSFM Exfoliating Body Wash, SSFM Soothing Shave Oil, SSFM Hair Maximizing Shampoo, SSFM Hair Maximizing Serum, Suncare UV Response Body SPF 50, Suncare UV Response Face SPF 50, CX Antioxidant Rescue Serum, CX Protective Base SPF 40, CX Soothing Concealer, CX Colour Corrector, Colour Surge Butter Shine Sheers, Lip Brush. Prescriptives—Flawless Skin Total Protection Makeup, Colorscope Eye and Cheek Color, Moonbeam Extreme Chromatic Lipcolor, Custom Blend Lip Gloss, Magic Eye Shadow Effects, Moonbeam Reflective Eyeliner, Intensive Rebuilding Lifting Serum, Flawless Total Protection Pressed Powder, Flawless Total Protection Concealer, Anti-Age Advanced Protection Lotion, Sunsheen Cooling Bronzer Powder, Rain Gloss– April, Intensive Rebuilding Lip Shaper. Origins—A Perfect World Nighttime antioxidant mask and lip guardian, Paradise Found Balinese body cream, Finger Touch Relaxing massage oil, cocoa therapy Comforting cream bath and skin-softening body cleanser, Natural Luxuries 100% vegetable-based soap and triple-wick candles, Next of Skin Modern moisture makeup SPF 15, Halo Effect instant illuminator for eyes (limited edition), Dr. Andrew Weil for Origins Plantidote Collection which includes Face Serum, Face Cream, Mega-Mushroom Supplement and Nite-trition Restful Sleep Supplement, Spice Odyssey Foaming body rub, Flower Fusion Hydrating lip color with floral extracts, 100% Organic Nourishing oil collection, Shedonism collection of body butter, bath syrup and shave mousse, Liquid Lip Shimmer, Origins for Men collection of shaving and shower products. Tommy Hilfiger—Beyonce True Star Gold, True Star Satin Powder, True Star Satin Body Cream, True Star Gold Body Lotion, Tommy Summer/Tommy Girl Summer 2006, Tommy 10/Tommy Girl 10. MAC—MAC Prep + Prime, Lustrevision, Lustrelong (14 new SKUs), Soft Nylon Bag Collection, Creations, C-Squeeze Fragrance, Naturally Eccentric, Hand Crafted Fluidline Re-launch, Paint Strokes, Veluxe Pearl Ext-Idol Eyes, Glitter Eye Liner-Idol Eyes, Ornamentalism, Luxuriations, Cremesticks, Holiday Part I, Saks Triple Points Toolbox, Nordstrom 24-7, Cache- Holiday ’05 Bags, Who’s That Lady, Holiday Part II, Federated Quad, Lingerie, Disney Tint Toons, Chromeglass, Catherine Deneuve, Culturebloom, Ultracheek, Touch Up Stick, Studio Liquid Foundation, Repromoted Brushes, Loose Blot Powder, Classic Coordinates, Dejarose, Saks Triple Points Toolbox, Temperly Compact, Sweetie Cake, Spring Bags, Liquidlast Liner, Skincare Sets, Sundressing, See Thru Colour, Summer Quad, Boy Beauty, Lure- Summer Bronzing, She-Shines Pigment Ext, Patternmaker-Nordstrom, Rebelrock Anniversary, Goldplay Anniversary, Turquatic. La Mer—The Essence, The Body Crème, The Cleansing Fluid, The Skincolor. Donna Karan—DKNY Red Delicious. Aveda—Shampure Candle, Damage Remedy Family, Pure Abundance Potion. Jo Malone—Tea & Basil Candle Collections, Pomegranate Noir Collection, Luxury Fragrance Combining Candle, Napa Leather Pot Pourri, Pot Pourri Collection, Deluxe Soap Collectio, Nectarine Blossom & Honey Collection (Cologne, Candle, Body Crème), Lime Basil & Mandarin Home Candle. Bumble & bumble—Bb. Shine and Hair Powders. Michael Kors—Leg Shine Shade Extensions in Shimmer and Bronze, Michael Kors With Love From, Michael EDP with Lariat, Island Michael Kors Fiji. Darphin—Pérdermine Wrinkle Corrective Serum. American Beauty—Wonderful, Fall Color Story, Holiday Color Story, Spring Color, Superplush, Lip Tint, Self Tanner, Summer Color. Flirt!—Fall Color Story, Holiday Sets, Serena Williams Collection, Spring Color Story, I'm Whipped, Summer Color. Good Skin—Balance & Brighten Collection. Grassroots (new). MAC Sean John—Unforgivable. To be launched: Origins—Youthtopia Skin Cream and Lotion, Dr. Andrew Weil for Origins Face Cleanser, Modern Friction Body. Michael Kors—Michael Kors eau de toilette 1.7oz. (September). MAC Sean John—Body Spray, Deo Stick, Shower Gel, Women’s.
 Like many other personal care companies, nutraceuticals are a growing portion of Estée Lauder’s business. |
Sales in Europe, the Middle East and Africa increased 13% to $2.1 billion due to higher sales in the UK, Spain, Portugal, South Africa and Greece, as well as improvements in travel retail. In fact, in a note to shareholders, chairman Leonard Lauder called travel the No. 1 consumer luxury in the world.
Sales in Asia/Pacific were up 8% to $835.5 million on the strength of gains in China, Hong Kong, Australia and Taiwan, partially offset by lower sales in Japan.
By product category, makeup sales rose nearly 13% to more than $2.4 billion. The gain included approximately $62 million of net sales from the launches of American Beauty and Flirt!, and higher sales of Bobbi Brown and Stila products, collectively. The launches of Superbalanced Compact Makeup SPF 20 and Color Surge eyeshadow from Clinique and Lash XL Maximum Length mascara, Tender Blush, Pure Pops Brush-on Color and AeroMatte Ultraluscent pressed powder by Estée Lauder provided a boost too. Also contributing to sales growth was approximately $70 million of increased sales from MAC’s Small eyeshadow, Studio Fix, Lustreglass and Pro Longwear lipcolor. Partially offsetting these increases was a decline of $38 million in sales of the High Impact mascara and High Impact eyeshadow collections and the Glosswear line of products by Clinique as well as of Pure Color Lip Vinyl by Estée Lauder.
Skin care sales rose nearly 10% to more than $2.3 billion. Approximately $179 million of the gain was due to the introduction of Future Perfect Anti-Wrinkle Radiance crème SPF 15 and the launches of the Perfectionist and Re-Nutriv product lines by Estée Lauder, launches of Superdefense Triple Action moisturizers SPF 25 and certain Repairwear products by Clinique, the introduction of certain American Beauty and Good Skin products and the launch of Modern Friction by Origins. On a combined basis, strong sales of products in Clinique’s 3-Step Skin Care System and The Lifting Face Serum and The Lifting Intensifier by La Mer added $29 million to the sales total. Partially offsetting these increases was a decrease of approximately $52 million in sales of Perfectionist Correcting Serum for Lines/Wrinkles, Idealist Micro-D Deep Thermal Refinisher and the White Light and LightSource lines of products by Estée Lauder.
Fragrance sales increased 3% to $1.2 billion due, in large part, to the launch of DKNY Be Delicious and DKNY Be Delicious Men, True Star from Tommy Hilfiger, Lauder Beyond Paradise Men from Estée Lauder, Happy To Be from Clinique and Donald Trump the Fragrance. But those gains were partially offset by declining sales of Estée Lauder Beyond Paradise, Aramis Life, Clinique Simply, Tommy Jeans and Tommy from Tommy Hilfiger and Lauder Intuition Men.
Hair care sales rose almost 10% to $274 million. The gain was due to sales growth from Aveda and Bumble and bumble products. The Aveda gains were due to the launch of new professional color products and the introductions of Pure Abundance and Damage Remedy.
Only sales in the “other” category slipped, falling 15% to $26.6 million.
The close of fiscal 2005 marked William P. Lauder’s one-year anniversary as CEO. And while Estée Lauder’s recent history has been one of acquisition, Mr. Lauder proudly noted that 70% of sales came from brands the company created on its own. Lauder’s newest brand, Grassroots, debuted last August. It includes products for face, body, hair, post-pregnancy, babies, kids and pets. Blended from essential oils, the formulas do not contain animal ingredients, artificial colors or fragrances. In September, Estée Lauder announced the sale of Stila. The deal was closed in March 2006.
For the nine months ended March 31, 2006, the company reported a 2% gain in sales to $4.86 billion. But net income fell nearly 20% to $275.4 million.
Late last month, Women’s Wear Daily reported that Patrick Bousquet-Chavanne may be headed to Liz Claiborne as Paul Charron’s successor. At presstime, no announcement had been made (see also, Liz Claiborne’s entry in The Top 50, p. 128).
5. Avon Products
New York, NY
212.282.5000
www.avon.com
Sales: $5.6 billion for cosmetics, toiletries and fragrances. Corporate sales: $8.1 billion. Net income: $848 million.
Key Personnel: Andrea Jung, chairman and chief executive officer; Geralyn R. Breig, senior vice president and global brand president; Brian C. Connolly, executive vice president, global sales strategy; Charles Cramb, executive vice president, finance and technology, and chief financial officer; Elizabeth A. Smith, executive vice president and president, Avon North America and global marketing; Lucien Alziari, senior vice president, human resources; Gina R. Boswell, senior vice president and chief operating officer, North America; Pauline J. Brown, senior vice president, corporate strategy and global business development; Harriet Edelman, senior vice president, business transformation and chief information officer; Bennett R. Gallina, senior vice president, China, Western Europe, the Middle East and Africa; Nancy Glaser, senior vice president, global communications; Gilbert L. Klemann II, senior vice president and general counsel; Dennis Ling, senior vice president, global finance and treasurer; Amilcar Melendez, senior vice president, Latin America; John F. Owen, senior vice president, global supply chain; James Wei, senior vice president, Asia Pacific.
 Avon offers a variety of ‘solutions’ for problem skin. |
New Products: Instant Manicure dry nail enamel strips, Anew Clinical Line & Wrinkle Corrector, Skin So Soft Bug Guard Plus Picaridin, Slim & Sleek Leg Perfector.
Comments: Times are tough for the world’s biggest direct seller of cosmetics. In November, Avon announced a four-point plan to restore sustainable growth. The plan includes:
• Committing to brand competitiveness by focusing R&D resources on product innovation and by increasing advertising.
• Winning with commercial edge by more effectively utilizing pricing and promotion, expanding sales leadership programs and improving the representative’s earnings opportunity.
• Elevating organization effectiveness by redesigning corporate structure to eliminate layers of management to take full advantage of Avon’s global scale and size.
• Transforming the cost structure so that costs are aligned with revenue growth.
In line with the turnaround plan, the company also has a multi-year restructuring plan in place that calls for delayering; i.e., bring senior management closer to operations; exit unprofitable businesses, including Becoming in the U.S.; and move certain services from markets within Europe to lower cost shared service centers.
These moves come at a time when Avon still posted a 5% gain in sales last year. Net income was essentially flat. The company credited the sales gain to an increase in units and the number of active representatives. Revenue was up in Latin America and Europe, but results in Asia Pacific were flat due to a sales decline in China. North American sales fell 5% to $2.5 billion, due to a decline in beauty sales and the repositioning of Beyond Beauty in the U.S., which represents 85% of the North American segment.
European sales rose 9% to nearly $2.3 billion, led by a 15% gain in Central and Eastern Europe. Latin American results were even better. The region reported a 17% gain in sales to almost $2.3 billion. With the exception of Mexico, every country in the region posted sales growth. Sales in Asia-Pacific were flat, but still topped $1 billion. Sales fell 7% in China, but Avon has high hopes for 2006 after the government issued a direct selling license to Avon.
On Jan. 1, 2006, the company began managing operations in central and eastern Europe and also China as stand-alone operating segments.
For the first quarter of 2006, sales rose 6% to $2 billion. Active representatives grew 4%, primarily due to the company’s acquisition of its business in Colombia in 2005, as well as continued growth in central and eastern Europe and Latin America. Units increased 3%, and total sales of beauty products in the quarter rose 6%.
First quarter operating profit fell 67% to $86 million, due primarily to $120 million in costs to implement restructuring initiatives. At the same time, Avon said it increased its advertising spend in the quarter by 57% to $40 million.
“The quarter’s results reflect the aggressive actions we are taking to return our business to sustainable growth,” said Andrea Jung, chairman and CEO. “At this early point, we are pleased with the progress we are making on our restructuring initiatives, and we continue to work diligently on all fronts of our previously announced four-point turnaround plan, with 2006 being a transition year.
“Along with actions aimed at streamlining our organization and reducing our cost structure, we are committed to improving our brand competitiveness. In particular, our large first-quarter increase in advertising is reflective of early action on this front, and we plan a similar lift in advertising spend in the second quarter,” she continued.
In the North America region, first-quarter revenue rose 3%, with all markets contributing solid increases. Active representatives were 5% lower and units decreased 3%. These declines were more than offset by a larger average order that was driven by strong product launches in skin care, as well as strength in the Beauty Plus category.
In Latin America, first-quarter revenue grew 28% due to the Colombia acquisition and continued strength in Brazil. The region’s active representatives rose 12% and units increased 10%.
First-quarter revenue in Western Europe, Middle East and Africa was flat compared with the prior year. Active representatives grew 2% and units increased 6%, versus the year-ago period. The region reported an operating loss of $34 million in the quarter largely as a result of $31 million in costs to implement restructuring plans.
In central and eastern Europe, revenue in the first quarter rose 3% (7% in local currency) and units increased 5% versus the year-ago period. In part due to the region’s continued roll-out of Avon’s sales leadership program, active representatives grew 13%.
Asia Pacific revenue was 11% lower in the quarter, units declined 10% and active representatives decreased 15%, as trouble in Japan impacted the region’s performance. Avon’s Japan business continued to face issues as it shifts from a direct-mail, customer-centric model to a more traditional direct-selling model. Revenue in China declined 27% and units decrease 18% in the first quarter as Avon’s Beauty Boutique owners continued to place smaller orders with the company, compared with the prior year, in connection with the resumption of direct selling.
On July 1, Susan J. Kropf, stepped down as president and chief operating officer, following a 35-year career during which she advanced to become the company’s No. 2 executive. A successor to Ms. Kropf will not be named, in line with the company’s new global operating structure announced in December. All business units and support functions will report directly to Ms. Jung.
“With a new operating structure in place and progress being made on our business turnaround plan, I am confident that Avon is now well-positioned to resume sustainable growth, and that the time is now right for me to act on this personal decision that I’ve been considering for some time,” said Ms. Kropf. “Looking back, I am very proud of Avon’s extraordinary business growth over the years, as we have evolved from a smaller, more entrepreneurial company to a true global business of scale. I am honored to have been a part of the Avon success story for so many years, and I know I leave the business in good hands with a talented new generation of leaders who are committed to Avon’s continuing success.”
6. Ecolab
St. Paul, MN
651.293.2233
www.ecolab.com
Sales: $4.5 billion. Net income: $310 million.
Key Personnel: Douglas M. Baker, chairman, president and chief executive officer; Lawrence T. Bell, senior vice president, general counsel and secretary; John G. Forsythe, senior vice president-public affairs and chief tax officer; Steven L. Fritze, executive vice president and chief financial officer; Robert K. Gifford, senior vice president, global supply chain; Thomas W. Handley, executive vice president, specialty sector; Michael A. Hickey, senior vice president, Luciano Iannuzzi, executive vice president, Europe, Africa and Middle East; Diana D. Lewis, senior vice president, human resources; Phillip J. Mason, executive vice president, Asia Pacific and Latin America; Michael C. McCormick, vice president, corporate development; James A. Miller, executive vice president, institutional sector North America; Susan K. Nestegard, senior vice president, research development and engineering and chief technical officer; Daniel J. Schmechel, senior vice president and controller; Thomas W. Schnack, vice president and general manager, food & beverage, North America; C. William Snedeker, senior vice president-global pest elimination; Robert P. Tabb, vice president and chief information officer; Mark D. Vangsgard, vice president and treasurer; James H. White, senior vice president, strategic planning.
 The institutional division rolled out Pathways solid drain sanitizer. |
New Products: Instituitonal—EcoLogic cleaners, Pathways solid drain sanitizer and Oasis 146 Multi-Quat Sanitizer; Kay—Q-Sure towels, Chlorinated Cleaner; Pest Elimination—Allur-Ring Pheromone Pad, Electronic Duster; Professional Products—Bright FX high performance floor care system; GlossTek floor finishes; Healthcare—Endure 450; GCS Service—Unitrax; Textile Care—Full Cycle Solutions; Food & Beverage—WPA-1000, Eco-Wipe; Vehicle Care—Rain-X Online Protectant.
Comments: Sales rose 8% last year. The U.S. accounted for 51% of sales. Within the U.S. results, institutional led the way with 25% of sales, followed by food & beverage, 7%; Pest Elimination, 6%; Kay, 5%; GCS Service, 3% and professional products, healthcare, vehicle care, textile care and water care services, all with 1%.
 Ecolab’s Formula 1 reduces energy usage in laundry care. |
Institutional reported a 7% gain in sales due to increased market penetration and successful new product launches. During the year, the division successfully launched its 360° of Protection program which improves food and employee safety, operating efficiency and guest satisfaction in the foodservice, hospitality and long-term care industries. Also, the division formed a strategic alliance with Pentair, a Minnesota-based provider of water purification solutions.
Kay posted an 11% increase in sales, and at the same time streamlined processes to drive down costs. One of the division’s growth drivers is the MarketGuard program, which combines food safety, pest elimination and floor care. Company executives predict that Kay will continue to build on its market leading position in the quickservice and food retail markets.
Pest elimination reported a 12% gain in sales led by increases in government, food and beverage, and non-food retail sectors. The division is said to be well-positioned to achieve double-digit gains in 2006.
Sales of professional products increased just 2%, but the division expanded its presence in the retail floor care space by participating in the MarketGuard program and by the introduction of products such as Bright FX high performance floor care system and GlossTek premium ultra-durable floor finishes.
Healthcare division sales soared 16%. The division is the market leader in infection control. During the year, the division made a successful entry into the operating room environment. Now in its third year as a stand-alone division, healthcare is expected to post more gains due its increased sales and service force, novel new products and innovative R&D program.
After revamping its management team in 2004, GCS Service posted an 8% increase in sales last year. The unit added business with several large, multi-unit accounts. Textile Care sales were up 5%, due to new product launchings, cross-divisional partnerships and gains in the tunnel washer segment.
Following the integration of the Alcide acquisition, food and beverage sales surged 9%. During the year, the division expanded sales of Sanova, its antimicrobial food additive that reduces pathogens on food surfaces.
The acquisition of Midland Research Laboratories, a water treatment company, helped boost sales of water care services by 34%. The division also expanded its sales team and added scale in areas such as marketing, finance and R&D. Vehicle care posted a 12% gain in sales due to new product introductions and several large account gains.
Outside the U.S., European sales rose 3% as the region embraced Ecolab’s Circle the Customer approach to secure new corporate accounts. Sales in Asia-Pacific were up 8% due, primarily, to big gains in China and Australia. Buoyed by successful new product launches, sales in Canada were also up 8%. Finally, sales in Latin America grew 15%, due to gains in global accounts, high growth in target segments and success in rolling out innovative products and solutions.
For the first quarter of 2006, sales rose 5% to a record $1.1 billion. Growth was strongest in the U.S., Latin America and Asia Pacific.
“Customer account gains, new products and increased solutions for our customers drove the growth,” explained Douglas M. Baker Jr., Ecolab’s chairman and CEO. “These strong fundamentals, along with improved pricing and cost savings, more than offset higher raw material costs and fueled the margin improvement and strong earnings. We are pleased by the solid start to the year.”
On May 1, Allan L. Schuman retired as chairman after 49 years of service. He began his career as an Ecolab junior sales representative in Queens, NY. After a decade of service in the field, he went on to create the national accounts structure that helped drive Ecolab’s success. Later he served as general manager of Ecolab’s largest businesses, followed by nine years as CEO, from 1995 to 2004. He also served as chairman from 2000 to 2006. Mr. Schuman was named chairman emeritus and Mr. Baker succeeds him as chairman.
7. Johnson & Johnson
New Brunswick, NJ
732.524.0400
www.jnj.com
Sales: $4 billion for skin care and baby care products. Corporate sales: $50.5 billion. Net income: $10.4 billion.
Key Personnel: William C. Weldon, chairman and chief executive officer; Robert J. Darretta, vice chairman; Colleen A. Goggins, worldwide chairman, consumer and personal care group.
 New Cortaid Poison Ivy Care doesn’t begin to scratch the surface of J&J’s skin care offerings. |
New Products: Johnson’s Soft and Johnson’s Soothing Naturals, Aveeno Ultra-Calming, Aveeno Essential Moisture lip conditioner, Aveeno Continuous Protection sunblock lotion.
Comments: On June 26, J&J agreed to purchase Pfizer’s consumer product business for $16.6 billion. The acquisition adds more bulk to J&J’s fast-growing consumer products division. In 2005, the company acquired the Rembrandt oral care line from Gillette. Neutrogena became the first J&J skin care brand to top the $1 billion mark in annual sales. Sales of skin care products rose 12.2% to $2.4 billion and baby and kid care sales rose 7.9% to $1.6 billion. Overall, corporate sales rose 6.7% and net income was up 22.4%.
In 2005, Aveeno brought new natural technologies to facial care and expanded into lip care and sun care. The new Aveeno Ultra-Calming line contains Feverfew and is clinically proven to visibly reduce redness in as little as one week. The company calls Johnson’s Soothing Naturals a breakthrough collection of baby skin care products that combines the gentleness of Johnson’s with beneficial plant-derived ingredients which contain a patent-pending complex of all four forms of vitamin E, olive leaf extract, minerals and essential amino acids and emollients. The line was created to maintain the integrity of the developing skin barrier and to provide moisture critical to healthy skin. For the first quarter of 2006, corporate sales rose 1% to $13.3 billion. Worldwide consumer segment sales rose 3.3% to $2.4 billion. The sales gain was attributed to strong sales of Aveeno, Neutrogena and Johnson’s adult skin products. During the quarter, the company announced that it had entered into an agreement to acquire Groupe Vendome, a privately-held French marketer of adult and baby skin care products.
Groupe Vendome’s brands include Le Petit Marseillais, a line of shower gel, soap and bath and hair care products; Laboratories Vendome, a dermatological solutions brand with body cleansers and moisturizers; and Prim’Age, a baby toiletries brand. The company maintains its headquarters in the Dijon region of France.
“The acquisition of Groupe Vendome will allow us to enhance our adult and baby skin care businesses,” said Claudio Cavicchioli, president of Johnson & Johnson Consumer France. “We are looking forward to building on the outstanding equity that the Groupe Vendome brands enjoy in the consumer marketplace. In particular, Le Petit Marseillais is a trusted family brand with more than 100 years of heritage behind it.”
8. Alberto-Culver
Melrose Park, IL
708.450.3000
www.alberto.com
Sales: $3.2 billion (estimated) for personal care products. Corporate sales: $3.5 billion. Net income: $211 million for the year ended Sept. 30, 2005.
Key Personnel: Carol L. Bernick, chairman; Howard B. Bernick, president and chief executive officer; John R. Berschied Jr., group vice president, global research and development; William J. Cernugel, senior vice president and chief financial officer; V. James Marino, president, Alberto-Culver Consumer Products Worldwide; Michael H. Renzulli, chairman, Sally Beauty Company, Inc; Gary P. Schmidt, senior vice president, general counsel and secretary; Gary G. Winterhalter, president, Sally Beauty Company, Inc.
Major Products: Alberto VO5, St. Ives, Tresemmé, Nexxus, Consort, Motions, Soft & Beautiful and hair care products sold through Sally Beauty Company.
New Products: VO5 styling line, Nexxus (acquisition) and Salon Success (acquisition).
Comments: The company continues to set sales records year after year, but the big news over the past 12 months is the what to do with Sally; i.e., Alberto-Culver’s beauty supply unit? After a much-ballyhooed deal with Regis fell through earlier this year, on June 19 Alberto-Culver managegment announced it will spinoff its Sally Beauty business. Shareholders will receive a special $25 per share one-time cash dividend for each ACV share, as well as upon completion of the transaction, Alberto-Culver Company shareholders will own one share of Alberto-Culver stock and one share of Sally Beauty Company stock for each ACV share held. Alberto-Culver Company shareholders will own approximately 52.5% of the shares of Sally Beauty Company which will become a new public company listed on the New York Stock Exchange.
 So long Sally! After months of uncertainty, Sally Beauty is being spun-off as an independent company. |
Sally Beauty Company will become a stand-alone publicly traded company with its 2,465 Sally Beauty stores, 825 Beauty Systems Group (BSG) outlets and an 1,181-person direct sales force calling directly on its salon customers. Sally generated revenue of $2.3 billion for the trailing 12 months ended March 31, 2006, and had pre-tax operating earnings of $244 million.
Gary Winterhalter will continue as president of Sally Beauty Company and following the separation, will assume the CEO role and will join the Sally board. Sally chairman Michael H. Renzulli has entered into a three year consulting agreement through 2009 with Sally Beauty Company. CD&R will designate six of the 12 directors to be appointed to the Sally board, including the chairman.
Following the move, Alberto-Culver will be a global branded consumer products company. The operating management team will remain in place. The consumer products unit generated revenue of $1.4 billion for the trailing 12 months ended March 31, 2006, and had pre-tax operating earnings of nearly $140 million.
Carol Lavin Bernick will remain executive chairman of the Alberto-Culver Company. After the closing, V. James Marino will become Alberto-Culver’s president and CEO and will join the Alberto-Culver board. He is currently president, Alberto-Culver Consumer Products Worldwide. Mrs. Bernick and Mr. Marino, along with their operating team, were responsible for the successful turnaround in Alberto-Culver's consumer products business over the past five years and will remain in place going forward. Howard B. Bernick, Alberto-Culver president and CEO, will retire from his position at Alberto-Culver and from the Alberto-Culver board of directors after the spin-off is accomplished. Mrs. Bernick, in announcing the transaction, commented, “Sally Beauty Company and our consumer products businesses have demonstrated, in the company’s remarkable 15 year run of consecutive sales and earnings record performances, the ability to innovate, to grow sales and to grow margins. A large part of that success is due to the continuity and strength of the exceptional management teams each business has had and those leadership teams will remain in place. Recently, the businesses have faced growth constraints caused by customer and vendor conflicts between the units which will now be eliminated. I believe the growth potential for an independent consumer products group and an independent Sally Beauty Company should provide substantial benefits for the shareholders of both companies.”
The move, announced June 19, is just the latest chapter in the Sally saga. Back in January, Alberto-Culver announced a $2.6 billion agreement to spin-off Sally Beauty Company, the world’s No. 1 marketer of professional beauty supplies, and merge it with Regis Corporation, a global leader in beauty salons, hair restoration centers and beauty education. The agreement would have combined Sally Beauty stores and Beauty Systems Group outlets and 1,244-person direct sales force with Regis’ 10,952 beauty salons, operated under brand names such as Regis, Supercuts, Vidal Sassoon, SmartStyle and Trade Secret, 90 hair restoration centers and 35 beauty education schools.
But on April 5, and after two consecutive earnings shortfalls from Regis, the Alberto board rejected the move and the deal fell through. Too bad, said most observers, as the union would have freed Alberto-Culver to concentrate on its $1.4 billion consumer products business. Moreover, it would have eliminated conflicts between Alberto-Culver’s distribution business and its consumer products business.
Even as the Sally saga raged, Alberto-Culver was very active in other areas during the past year. With the Nexxus acquisition fully digested, the company posted its 14th consecutive year of record sales and profits. Corporate sales were up 8.4%.
Sales of the company’s flagship brands, including Alberto VO5, Tresemmé and St. Ives rose. Tresemmé led the way, with a 30% jump in U.S. sales and the introduction of the brand in the UK.
The good sales growth continued through the first half of 2006 as sales rose 6.6% to $1.85 billion.
“We are very pleased with our 2006 fiscal year-to-date results. In the consumer business, our second quarter sales growth was greatly enhanced by the Nexxus retail launch and continued strong performance from our Tresemmé hair care range again this quarter,” said Mr. Bernick.
He noted that second quarter advertising increased by almost 40% versus the prior year, much of this related to the Nexxus launch. The company ended the quarter with 2,465 Sally stores in the U.S., Canada, Mexico, Puerto Rico, the UK, Ireland, Germany and Japan, and its Beauty Systems Group had 825 stores and 1,181 professional distributor sales consultants as of March 31, 2006.
As Happi went to press, Alberto-Culver acquired Salon Success, a $30 million UK company that distributes professional beauty products. Salon Success holds European distribution rights to Paul Mitchell products in 15 countries, as well as in Georgia and Florida. According to Mr. Bernick, this is the Alberto Beauty Group’s first entry into the heart of Florida, which has become a key region for professional beauty product sales. Despite the acqusition, terms of the Sally Beauty deal remain unchanged.
9. Access Business Group
Ada, MI
616.787.3000
www.accessbusinessgroup.com
Sales: $2.9 billion (estimated) for household, personal care and nutritional products. Corporate sales: $6.4 billion.
Key Personnel: Al Koop, chief operating officer, Access Business Group.
Chief Technical Officer: George Calvert, vice president, R&D/QA division.
Chief Marketing Officer: John Parker, chief marketing officer.
Major Products: Personal care—Artistry color cosmetics and skin care products, Satinique shampoos, conditioners, Lustertone hair color and Blister oral care products. Home care—L.O.C. multi-purpose cleaner, Dish Drops dish detergent, SA8 laundry products, water and air treatment products.
New Products: Artistry Time Defiance microdermabrasion system and micro exfoliation cloths, Satinique color care, Satinique styling products, Body Blends body care, SA8 liquid laundry detergent and SA8 fabric softener.
Comments: Corporate sales rose 3% last year. The gains were attributed to rapid sales growth in Asia, particularly in China, Korea and India. Access has 65 R&D labs worldwide, more than a dozen manufacturing facilities and a distribution network extending to more than 80 countries and territories. Access also owns organically certified farms in Brazil, Mexico and the U.S.
In May, Nutrilite Health Institute (NHI) opened its Center for Optimal Health, a nutrition and health education center offering the latest in personalized health and preventative care.
The company predicts that each year, “tens of thousands of consumers (most of whom also sell Nutrilite products) will come to the Nutrilite Health Institute Center for Optimal Health and its affiliate brand centers located around the world for a personalized, experiential and comprehensive health assessment and educational opportunity. Visitors can meet with medical and fitness experts, undergo a series of blood work and other tests, and receive a tailored nutrition and fitness plan to reach their optimal health goals.
“In the supplement industry, Nutrilite is the only company backed by 70 years of pioneering research, an impressive roster of experts, and now, a state-of-the-art research and education Center for Optimal Health,” explained Dr. Sam Rehnborg, president of Nutrilite Health Institute.
“The NHI Center for Optimal Health leverages all of our peer-reviewed research and clinical testing to educate and empower consumers,” said Audra Davies, manager of supplement product development. “The Center represents the best of nature and the best of science, much like our supplements.”
Representing more than $10 million in capital investment, the 33,000 square-foot health assessment center includes a theater and an interactive exhibit on optimal health, nutrition and the stories behind the Nutrilite brand.
 |
New York, NY
212.479.4300
www.coty.com
Sales: $2.9 billion.
Key Personnel: Peter Harf, chairman, Coty Inc.; Bernd Beetz, chief executive officer, Coty Inc.; Michael Fishoff, chief financial officer, Coty Inc.; Eric Thoreux, president, Coty Beauty Americas; Hans-Joachim Honigfort, president, Coty Beauty Europe; Michele Scannavini, president, Coty Prestige; Géraud-Marie Lacassagne, senior vice president, human resources, Coty Inc.; Gabriel Ripoll, executive vice president, global operations, Coty Inc.
Major Products: Fragrances, cosmetics and personal care products marketed under a variety of brand names including Coty, Adidas, Lancaster, Davidoff, Rimmel and Healing Gardens.
New Products: Calvin Klein Euphoria, Live Jennifer Lopez, Love at First Glow, Lovely Sarah Jessica Parker, CK One Summer, Eternity Summer, Marc Jacobs Splash, Lancaster Sun Care, Kenneth Cole Signature, Nautica Blue, Nautica Voyage, Celine Dion Always Belong, Rimmel Volume Flash Mascara, Rimmel Recover Foundation, Healing Garden Skin Organics, Healing Garden Passion Rose, Calgon Gourmand Mmmm, Calgon Aqua Fresca, Mary-kateandashley Coast to Coast Malibu Style and Mary-kateandashley Coast to Coast Soho Chic, Shania by Stetson. To be launched: Candies Heartbreaker (July), Live Luxe Jennifer Lopez (August), Phat Farm Atman (September), Vera Wang Princess (September), Desperate Housewives Forbidden Fruit (September), Lovely Sarah Jessica Parker Liquid Satin (September), Baby Phat Golden Goddess by Kimora Lee Simmons (September), Euphoria Men Calvin Klein (October), Marc Jacobs Winter Splash (October), CK One electric (October), Kenneth Cole Reaction Thermal (November).
 Lovely Sarah Jessica Parker (above) and Euphoria Calvin Klein are just two of the award-winning scents from Coty. |
But it’s quality, not quantity, which is the trademark of the Coty fragrance business. Once again, the company dominated the Fragrance Foundation Fifi awards, taking home four prizes this year. Celine Dion Parfums Belong was awarded the Best Packaging of the Year in the Popular Appeal category; Lovely Sarah Jessica Parker won the Best National Advertising Campaign of the Year for television; Stetson Black was honored with the Fragrance Star of the Year award (Men’s Popular Appeal) and Euphoria Calvin Klein won the Fragrance Star of the Year (Women’s Luxe).
These victories are only the latest in a string of successes. François Coty, who is credited with founding the modern fragrance industry, formed Coty in Paris in 1904.
11. Johnson Diversey
Sturtevant, WI
262.631.4001
www.johnsondiversey.com
Sales: $2.8 billion for industrial and institutional cleaners. Corporate sales: $3.2 billion. Net loss: $221 million.
Key Personnel: Ed Lonergan, president and chief executive officer; Joe Smorada, chief financial officer and executive vice president; JoAnne Brandes, chief administrative officer, senior vice president and general counsel.
Major Products: Cleaning and hygiene solutions and services that are used in commercial, institutional and industrial facilities. The company operates in six categories: food service, food processing, floor care, restroom/other housekeeping, laundry and industrial. Brands include: Complete, ShowPlace, SnapBack, Virex Crew, Soft Care, Endbac, Signature, J-Fill, Taski, Suma, DuBois and Divermite. In addition, the company owns other well-known brands such as Butchers, U.S. Chemical, Drackett Professional, AutoChlor, Teepol and Prism.
New Products: Green Seal-certified floor finishes and strippers including Johnson Wax Professional Freedom SC floor stripper, Johnson Wax Professional Aquaria floor finish and Butcher’s G-Force floor finish and strippers; Johnson Wax Professional Fastrip and Butcher’s Wild Rapids floor strippers; QuattroSelect wall-mounted dispensing system.
Comments: Sales were flat last year. To pay down the $1.7 billion debt Johnson Diversey accrued from the acquisition of Diversey Lever back in 2002, the company sold its Johnson Polymer division to BASF for $470 million. Johnson Polymer manufactures specialty polymers for use in the industrial print and packaging industry, industrial paint and coatings industry, and industrial plastics industry. Johnson Polymer had sales of $375 million last year, and enjoyed an 11% sales gain in 2005.
11. Limited Brands
Columbus, OH
614.415.7000
www.limited.com
Sales: $2.8 billion (estimated) for Bath & Body Works, White Barn and Victoria’s Secret personal care products. Corporate sales: $9.7 billion. Net income: $683 million.
Key Personnel: Leslie H. Wexner, chairman and chief executive officer; Leonard A. Schlesinger, group president, beauty and personal care and vice chairman and chief operating officer; Neil Fiske, chief executive officer, Bath & Body Works; Christine Beauchamp, president, Victoria’s Secret Beauty; Michael Nicholson, executive vice president and chief operating officer, Victoria Secret Beauty; V. Ann Hailey, executive vice president, corporate development.
 Cellulite Rx is new from Bath & Body Works. |
New Products: Victoria’s Secret—Beauty Rush, SuperModel Sexy Hair, Garden Pure Paradise, Victoria’s Secret Spa, Bare Bronze. Bath & Body Works—American Girl and Breathe Body Care, C.O. Bigelow and Le Couvent des Minimes.
Comments: Corporate sales rose 3% last year, but the company’s personal care businesses did better. Sales at Bath & Body Works rose 5% to nearly $2.3 billion and sales of Victoria’s Secret were up 4%.
Company executives insist there is plenty of room for growth for the Victoria’s Secret Beauty brand. They note that the brand has just 2% of the U.S. beauty market. More precisely, VS’s shares are: fragrance, 7%; body care, 4% and color, less than 1%. Moreover, just 40% of Victoria’s Secret customers (lingerie) are beauty customers too. To boost its opportunities, the company is testing an expanded Pink assortment in targeted locations, and is considering the introduction of free-standing Pink stores as it explores additional opportunities to transform Pink into a fully articulated lifestyle brand.
At Bath & Body Works, the company opened seven new C.O. Bigelow stores in the Boston, Chicago and New York markets. In addition, Bath & Body Works executed several initiatives to support future growth including several investments in personal care and beauty concepts; the acquisition of Slatkin & Company, an importer and wholesaler of sophisticated premium home fragrances; and the introduction of the Dr. Patricia Wexler, M.D. clinical skin care line. Bath & Body Works launched bathandbodyworks.com in October 2005, providing an important new channel for growth.
13. Clorox
Oakland, CA
510.271.7000
www.clorox.com
Sales: $2.4 billion (estimated) for household products. Corporate sales: $4.4 billion.
Key Personnel: Robert W. Matschullat, interim chairman and interim chief executive officer; Lawrence S. Peiros, group vice president, household group; Beth Springer, group vice president, specialty group; Frank A. Tataseo, group vice president, functional operations; Warwick Every-Burns, senior vice president, international; Daniel J. Heinrich, senior vice president, chief financial officer; Jacqueline P. Kane, senior vice president, human resources and corporate affairs; Laura Stein, senior vice president, general counsel and corporate secretary; Tim E. Bailey, vice president, product supply; Thomas P. Britanik, vice president, general manager, U.S. auto care; Benno Dorer, vice president, general manager, Glad; Robin Evitts, vice president, chief information officer; Thomas D. Johnson, vice president, controller and chief accounting officer; Grant J. LaMontagne, vice president, sales; Stephen M. Robb, vice president, financial planning and analysis; Glenn R. Savage, vice president, general manager, laundry and home care; Keith R. Tandowsky, vice president, internal audit.
Chief Technical Officer: Wayne L. Delker, PhD., vice president, research and development.
Chief Marketing Officer: Derek A. Gordon, vice president, marketing.
 Disinfect any surface with Clorox Anywhere hard surface cleaner. |
Comments: Fiscal 2005 was another good year for Clorox as sales rose more than 5% and market share rose in all eight categories the company competes in.
Unfortunately, 2006 has been marked by the heart attack and subsequent retirement of chief executive Jerry Johnston (see box, p. 98). The other big news was that Clorox completed the largest transaction in its history with the $2.8 billion acquistion of its stock from Henkel.
By operating segment, sales within the household product group rose 3% to $2 billion. International sales, which include some categories outside of Happi’s scope, were up 13% to $600 million. The specialty group, which includes food and other products, reported a 7% increase in sales to $1.8 billion.
For the nine months ended March 31, 2006, corporate sales rose 6% to $3.3 billion. But net income plunged from $904 million to $302 million.
14. Mary Kay
Dallas, TX
800.MARY.KAY
www.marykay.com
Sales: $2.2 billion.
Key Personnel: David Holl, president and chief operating officer; Darrell Overcash, president; Terry Smith, chief financial officer; Melinda Sellers, senior vice president, human resources.
Chief Scientific Officer: Dr. Myra Barker, executive vice president, marketing/R&D.
Chief Marketing Officer: Greg Franklin, vice president, marketing.
 Mary Kay’s Time Wise is a popular anti-aging line. |
New Products: TimeWise Age-Fighting lip primer, TimeWise Day Solution SPF 25, MK Signature ultimate mascara, Essence, MK Signature Luscious Color lipstick, MK Signature lip concentrate, Private Spa Collection Satin Hands pampering set, TimeWise Even Complexion Essence.
Comments: Sales continue to surge at Mary Kay. The company set a new sales record again in 2005, with a gain of 22%. In April, Mary Kay appointed David Holl as president and CEO. He joined the company in 1993 and most recently served as president and COO. During his tenure, Mr. Holl is credited with expanding the company’s business in China and eastern Europe. Mr. Holl replaced Richard R. Rogers, the company’s co-founder and son of Mary Kay Ash. Mr. Rogers assumes the role of executive chairman.
At the end of 2005, Mary Kay Inc. had a sales force of 1.6 million and operated in 30 markets around the world.
 Nair Lasting Effects debuted from Church & Dwight earlier this year. |
Chicago, IL
312.726.2600
www.saralee.com
Sales: $1.9 billion for household and personal care products. Operating income: $310 million. Corporate sales: $19.2 billion. Net income: $719 million for the year ended July 2, 2005.
Key Personnel: Brenda Barnes, chairman and chief executive officer; L.M. de Kool, executive vice president, chief financial and administrative officer; Adriaan Nühn, executive vice president, chief executive officer, Sara Lee International; Diana S. Ferguson, senior vice president, strategy and corporate development; Lois M. Huggins, senior vice president, chief people officer; Vincent H.A.M. Janssen, senior vice president, chief executive officer, household and body care, Sara Lee International.
Major Products: Shoe care—Kiwi; Body care—Sanex, Duschdas, Badedas and Monsavon; Baby care—Zwitsal, Fissan and Proderm; Insecticides—Catch, Bloom, Vapona and Ridsect; Air fresheners—Ambi-Pur; Oral care—Zendium and Prodent; Detergents—Biotex and Neutral.
 Enamel Care contains liquid calcium to give tooth enamel a boost. |
Net income fell 42%. Sales of household and personal care products declined less than 1%.
To get the company growing again, Sara Lee management has initiated a transformation program designed to streamline the company and focus on core businesses.
At an analysts meeting last month, Brenda C. Barnes, chairman and CEO, discussed the company’s transformation and growth opportunities in each of its categories. During the conference, Ms. Barnes offered overviews of the core food (meat and bakery), beverage, and household and body care businesses in which the “new” Sara Lee will compete.
“We have chosen to focus on these businesses because they present us with the best opportunity to win in the marketplace and provide positive results for our shareholders and employees,” added Ms. Barnes. “We are leveraging powerful brands, such as Ball Park, Jimmy Dean, Sanex, Senseo and, of course, our namesake, Sara Lee, to drive growth and deliver improved results.
“Sara Lee’s transformation to a focused, integrated operating company is on schedule” said Ms. Barnes. “Our core business performance is generally improving, and we remain committed to returning value to our shareholders.”
The transformation plan is expected to yield a cost savings of $575-$810 million a year by fiscal 2010. The company will use the money to fund marketing and R&D efforts. How will Sara Lee generate that kind of cash? By redesigning its processes to increase operational efficiency while also creating a lasting culture of continuous improvement, according to the company. The plan, also known as Process Improvement to Excellence (PIE), calls for greater and more effective spending on value-added activities such as product development, consumer research and marketing. It should also increase speed and efficiency across all of Sara Lee, which ultimately should produce better products and get them to market faster than ever. One of the biggest changes will come in the company’s organizational structure. Under the plan, the household product group has been folded into a new division, Sara Lee International, which also includes the beverage, bakery and meats business outside of North America. Moreover, last August, Sara Lee sold its direct sales unit to Tupperware Corp. for $557 million. The business includes such categories as cosmetics, fragrances and nutritional supplements.
In fiscal 2005, sales in the household product segment fell 7% and unit volume declined 3%, due to the fact that fiscal 2004 was a 53-week period. Unit volume increased in the insecticide category, due to increased marketing efforts and higher sales of lower-priced products. In the body care category, unit volumes increased due to higher promotional activity. Elsewhere, shoe care volume was flat and volume declined in air care due to increased competition.
16. Church & Dwight
Princeton, NJ
609.683.5900
www.churchdwight.com
Sales: $1.4 billion for household and personal care products. Corporate sales: $1.7 billion. Net income: $123 million.
Key Personnel: Robert A. Davies III, chairman; James R. Craigie, president and chief executive officer; Zvi Eiref, chief financial officer; Jaqueline J. Brova, vice president, human resources.
Major Products: Laundry—Arm & Hammer and Xtra detergent, Nice’n Fluffy and Arm & Hammer Fresh’n Soft fabric softener, Delicare fine fabric wash, Arm & Hammer super washing powder; Deodorizing and household Cleaning—Arm & Hammer carpet deodorizer, Brillo pads, Scrub Free bathroom cleaner, Clean Shower daily shower cleaner, Cameo cleaners, Sno Bol toilet bowl cleaner, Parsons’ ammonia; Personal care—Arm & Hammer, Mentadent, Pepsodent, Aim and Close-Up toothpastes, Arrid and Arm & Hammer and Lady’s Choice deodorants and antiperspirants.
New Products: Mentadent Replenishing White toothpaste with Liquid Calcium, Elexa sexual health products, Spinbrush (acquisition), Mentadent Advanced Whitening System.
Comments: Corporate sales surged more than 18% last year, but they were primarily due to the May 2004 acquisition of Armkel. Personal care sales were also up due to the launch of Elexa, but were partially offset by lower oral care sales. Household product sales increased 4.9% due to higher sales of A&H and Xtra liquid laundry products, partially offset by lower sales of powdered laundry detergent.
On Oct. 31, 2005, Church & Dwight acquired the Spinbrush battery-operated toothbrush business from Procter & Gamble. The purchase price was $75 million in cash, plus additional performance-based payments of up to $30 million payable at specified times following the closing. Spinbrush had sales of $110 million for the year ended June 30, 2005. More than 80% of sales were in the U.S. and Canada.
In addition to launching its own new products, the company is stepping up its licensing efforts to support the launch of new products by other companies. According to Church & Dwight executives, this will leverage the benefits of C&D brands and technologies into other categories where the company lacks the competitive strength to successfully compete, while reinforcing consumer awareness of its own brands.
For the first quarter of 2006, corporate sales rose 5.2% to more than $442 million. Net income increased 7% to nearly $40 million. The results included revenue of $12.3 million for Spinbrush and a skin care operation in Brazil.
17. Revlon
New York, NY
212.527.4000
www.revlon.com
Sales: $1.3 billion. Net loss: $84 million.
Key Personnel: Ronald O. Perelman, chairman; Jack Stahl, president and chief executive officer; David L. Kennedy, executive vice president and chief financial officer; Lisa Baumgarten, senior vice president, strategy, planning and business development; Catherine Fisher, senior vice president, corporate communications; Carl Kooyoomjian, executive vice president, technical affairs and worldwide operations; Robert K. Kretzman, executive vice president and chief legal officer; Mary M. Massimo, executive vice president, human resources; Thomas McGuire, executive vice president and president, Revlon International; Karl Obrecht, executive vice president, North American sales; Rochelle Udell, executive vice president and chief creative officer; Chris Eishaw, senior vice president, managing director, Europe; Alan T. Ennis, senior vice president, internal audit; Arthur Franson, senior vice president, worldwide manufacturing; Graeme Howard, senior vice president, managing director, Asia Pacific; John F. Matsen Jr., senior vice president, corporate controller; William Reis, senior vice president and chief procurement officer; Simon Worraker, senior vice president, Latin America region and general manager, Mexico.
Chief Scientific Officer: Neil Scancarella, executive vice president and chief science officer.
Marketing Director: Stephanie Klein Peponis, executive vice president and chief marketing officer.
Major Products: Cosmetics, skin care, hair care and fragrances sold under such brand names as Revlon, Colorstay, Age Defying, Almay, Charlie, Ultima II and African Pride.
New Products: Almay—Intense i-Color; Revlon—Fabulash Mascara, ColorStay 12-Hour Eye Shadow and Expert Effects beauty tools; Vital Radiance cosmetics.
 Revlon’s current financial situation is not a pretty picture. |
“Our initiatives are delivering significant incremental revenue growth in 2006, although they are requiring significant levels of investment to build consumer awareness and trial—particularly of Vital Radiance—due in part to the heightened competitive environment,” insisted Jack Stahl, Revlon president and CEO. “We believe that these investments, along with our other actions to build the value of our brands, strengthen our retail relationships and reduce costs, will benefit the value of our company over time.”
Still, for the first quarter ended March 31, Revlon’s sales rose 8% to $326 million. In North America, net sales grew 11% to $216 million due to the Vital Radiance and re-staged Almay rollouts, partially offset by lower shipments of Revlon. International net sales in the first quarter of 2006 advanced 2% to $109 million.
Last year, North American sales increased just 0.2%to $857.1 million. International sales increased 7.6% to $475.2 million. More specifically, sales in Asia Pacific and Africa increased 7.3% to $242.6 million. In Europe and the Middle East, sales increased 3.6% to $125 million.
Combined U.S. mass-market share for the Revlon and Almay brands totaled 21.6% for 2005, compared with 21.4% for 2004, with the Revlon brand registering a share of 15.4% for 2005, compared with 15.7% for 2004, and the Almay brand registering a share of 6.2% for 2005,compared with 5.7% for 2004. The share increase for the Almay brand was driven primarily by the successful launch of new products, including the Almay Intense i-Color collection. In women’s hair color and beauty tools, the company gained market share in 2005, compared with 2004, increasing, respectively, from a 8% market share for 2004 to 8.5% for 2005, and 24.1% market share for 2004 to 25% for 2005. Market share performance was essentially even at 6.2% for antiperspirants/deodorants in 2004 and 2005.
18. Pfizer
New York, NY
212.573.2323
www.pfizer.com
Sales: $1.2 billion. Corporate sales: $51.3 billion. Net income: $8 billion.
Key Personnel: Hank McKinnell, chairman.
Major Products: Listerine mouthwash and toothpaste, Lubriderm moisturizing lotions, Purell instant hand sanitizer.
New Products: Advanced Listerine antiseptic mouthwash with Tartar Protection, Lubriderm skin nourishing moisturizing lotion with sea kelp extract.
Comments: Like so many pharmaceutical companies before it, Pfizer is getting out of consumer healthcare. Last month, Pfizer sold its stable of brands, which include Listerine, Lubriderm and Purell, to Johnson & Johnson for $16.6 billion. The price was higher than the $15 billion price analysts had expected as J&J outbid rivals such as GlaxoSmithKline and Reckitt Benckiser.
“We see the consumer healthcare markets as increasingly attractive growth opportunities as consumers take greater interest in and responsibility for their own health,” said William Weldon, chairman of J&J. “In addition, higher levels of disposable income in developing nations are helping drive increased demand for consumer health products.”
At the same time, demand for OTC medicine is growing as governments struggle to cut health care costs. Despite the higher-than-expected purchase price, J&J is getting a healthy healthcare business. In 2005, Pfizer’s total consumer healthcare revenues increased 10% to $3.9 billion, due in part to the strong performance of Listerine mouthwash and the inclusion of Purell sales. For the first quarter of 2006, corporate sales declined 3% to $12.6 billion.
19. Blyth
Greenwich, CT
203.661.1926
www.blythinc.com
Sales: $1 billion for home fragrance and related products. Corporate sales: $1.6 billion. Net income: $24 million for the year ended Jan. 31, 2006.
Key Personnel: Robert B. Goergen, chairman and chief executive officer; Robert H. Barghaus, vice president and chief financial officer; Bruce G. Crain, senior vice president and president, wholesale group; Robert B. Goergen Jr., vice president and president, catalog and internet group; Frank P. Mineo, senior vice president and president, direct selling group; Marcia L. Pontius, vice president, acquisitions and corporate development.
Chief Technical Officer: Anil J. Gupte, vice president, research and development.
Major Products: Candles and home fragrance products. Brands include Colonial Candle of Cape Cod, Miles Kimball, PartyLite, Sterno and Handy Fuel.
Comments: Higher oil prices have put a damper on the world’s largest candle maker. By business segment, direct selling reported a 4% loss to $704 million. Declines in the U.S. were partially offset by a double-digit gain in Europe and renewed strength in Canada.
Wholesale segment sales increased 4% to nearly $682 million, due to full-year results from European acquisitions. However, sales within the catalog and internet segment declined 3% to $187 million.
For the first quarter ended April 30, 2006, sales declined 4% to $327.5 million. Net loss for the quarter was $30.6 million versus net earnings of $10 million a year earlier. Blyth’s first quarter net sales declined due to lower sales in the company’s direct selling and wholesale segments, which was partially offset by modest growth in the catalog and internet segment.
“We completed the divestiture of Kaemingk, Blyth’s European wholesale seasonal decorations business, during the first quarter and continue to evaluate numerous strategic alternatives for our four other European wholesale operations,” said Robert B. Goergen, Blyth’s chairman and CEO. “Direct selling remains Blyth’s preferred venue for international expansion, and European markets in which PartyLite commenced operations over the past five years are experiencing robust growth.”
Mr. Goergen blamed the first quarter results on reduced consumer discretionary spending on Home Expressions products across major markets. In addition, a 50% increase in the price of paraffin wax during the past 12 months put a damper on earnings.
Later this year, the company plans to spin off its wholesale unit as a new, publicly-traded company.
20. Elizabeth Arden
Miami Lakes, FL
305.818.8000