Grand Brands Buys Lander Product Line
Grand Brands, LLC, a Grand Rapids, MI-based brand licensing company, has purchased the Lander product line, a well-established American bath and beauty care brand that has been on the shelves since 1920.
The Lander portfolio includes 139 SKUs of product sold in more than 40 countries and territories. The previous owners of the company, Ascendia Brands, ceased operations in 2008.
All Lander brand products will be made in the U.S. by a Grand Rapids, MI-based contract manufacturer, according to the company.
Henkel Increases Sales And Earnings
In fiscal 2008, Henkel’s sales rose 8.1% to $17.9 billion. According to the company, the substantial increase is mainly attributable to its acquisition of National Starch in April 2008. However, all business sectors contributed to this organic growth, with the company’s Laundry & Home Care and Cosmetics/Toiletries showing a better dynamic, said Henkel.
“Despite the difficult economic environment, we sustained our very good position in 2008. Once again, all our business sectors were able to outperform their respective markets, with our businesses in the emerging markets making a particularly strong contribution,” said Henkel chief executive Kasper Rorsted. “At the beginning of 2008, we initiated a global efficiency enhancement program in early response to the increasing economic difficulties encountered in the market. With this and the acquisition of the National Starch businesses, we have been able to sustainably strengthen our competitiveness. Moreover, our heightened focus on strategic priorities is already beginning to yield benefits.”
Mr. Rorsted continued, “We know that 2009 is not going to be an easy year. At the moment it is difficult to predict how the economy as a whole is going to develop. However, we are well equipped and confident we will emerge from this difficult economic environment with our position strengthened.”
The 2008 results also reflect a gain of $1.3 billion from the sale of the company’s 29.3% stake in Ecolab Inc.
Sales in the Laundry & Home Care business sector rose organically by 3.8%, outstripping the rate of expansion in its markets. Sales rose by 0.6% to $5.29 billion, with foreign exchange having a negative effect. The rise was primarily price-driven. Growth came mainly from the Europe/Africa/Middle East region, with Eastern Europe generating the primary impetus. In Western Europe, on the other hand, sales remained below the 2007 level.
With organic sales growth of 4.7%, Henkel’s Cosmetics/Toiletries business
significantly outpaced growth recorded by other segments. Sales rose by 1.5% to $3.8 billion, reflecting both the absence of marginal activities, divested to streamline the portfolio and the impact of the foreign exchange.
In the regional breakdown, the acquisition of the National Starch businesses had a positive effect, promoting further sales growth in all regions. Europe/Africa/Middle East posted a significant sales increase of 4.5% to $11.2 billion. However, sales in Western Europe declined slightly. Sales in North America rose by 5.6% to $3.42 billion. Latin America continued to perform very well, posting an increase in sales of 12.8% to $989 million. In the Asia-Pacific region, sales grew by 40.1% to $1.9 billion.
In the fourth quarter, total company sales rose 11.1% to $4.4 billion. The proceeds from the sale of Ecolab shares amounted to $2.1 billion, said the company in the report.
Helen of Troy to Acquire Infusium from P&G
Helen of Troy Limited has entered into an agreement with The Procter & Gamble Company (P&G) to acquire the global Infusium 23 hair care business for an undisclosed cash purchase price.
Infusium 23, with its 80-plus year heritage, has established a trusted reputation, according to the company.
The brand will be integrated into Helen of Troy’s Idelle Labs division of skin and hair care products.
Avon Announces New Plan
Sometimes it pays to think ahead. Avon Products, Inc. revealed that it now expects to achieve higher-than-anticipated annualized savings and benefits approaching $900 million from its original restructuring program and its product line simplification and strategic sourcing initiatives. The company also announced a new restructuring program targeting annualized savings of approximately $200 million when fully implemented.
Charles Cramb, Avon’s vice chairman, chief finance and strategy officer, said, “Our original restructuring program began in 2005, and over the last three years we have been dramatically transforming our cost structure and exceeding our original savings estimates as we fix the fundamentals of our business. Based on this progress, we expect the original restructuring program to deliver total savings of approximately $430 million by 2011-2012. We also expect to realize annualized benefits from our product line simplification and strategic sourcing initiatives in excess of $200 million and $250 million, respectively, in 2010.
“Fueled by this success, we’re also announcing that Avon will launch a new restructuring program that will target increasing levels of efficiency and organizational effectiveness across our global operations,” Mr. Cramb said. “This reflects both our constant turnaround mentality and our determination to aggressively manage our cost structure as we address the current macro-economic challenges.”
Avon said that the new restructuring program will focus on the company's global supply chain operations, realigning certain local business support functions to a more regional basis to drive increased efficiencies and streamlining transaction-related services, including selective outsourcing. Further details will be announced when initiatives are finalized.
The company also noted that the new restructuring program is targeted to achieve annualized savings of approximately $200 million upon full implementation by 2012-2013. Avon also said that the costs to implement the upcoming initiatives are expected to be in the range of $300-$400 million, with implementation anticipated to start in the second half of 2009.
Parlux Posts Rise in Sales
Paris and Jessica can still count fragrance as successful endeavors, according to the most recent financial report from Parlux. For the third quarter ended Dec. 31, 2008, net sales increased 6% to $47.3 million. Operating income rose 42% to $31.1 million, according to the company.
For the nine-months ended Dec. 31, 2008, net sales jumped 9% to $123 million. Operating income increased 43% to $73.2 million.
Neil Katz, company chairman and chief executive officer, said, “Strategically, our focus on strengthening our position in U.S. department stores has been a success. The strategy has been expensive financially, with committed advertising investments that could not be reduced in a retail environment that plummeted in late 2008. Additionally, the global economic turmoil, compounded with a volatile U.S. dollar, negatively impacted our international sales.”
Slow Going at Yankee Candle
Yankee Candle is hoping that 2009 will add a spark to the home fragrance business. Revenue for the fourth quarter ended Jan. 3, 2009 was $264.3 million, a 7.2% decrease from the prior year fourth quarter. According to the company, the decrease in revenue was a result of the deteriorating economic environment, a decrease in sales in its home specialty channel within its domestic wholesale business (driven by the bankruptcy of Linens-N-Things), and to a lesser extent a decrease in retail comparable store sales of 9.4%.
Retail sales rose 0.8% to $190.7 million. Wholesale sales dropped 22.9% to $73.6 million.
As part of a restructuring that was previously announced, the company recorded a $12.4 million charge in the fourth quarter of 2008.
Total revenue for the 2008 fiscal year dropped 3.1% to $713.7 million. Retail sales rose 0.6% to $410.3 million. Wholesale sales figures slipped 7.8% to $303.5 million.
Lowered Expectations at Physicians Formula
Physicians Formula Holdings, Inc. posted a drop its preliminary net sales for the three months and fiscal year ended Dec. 31, 2008. The company noted that since early November 2008, the consumer environment has weakened at a faster pace than previously anticipated and tight inventory control by retailers reduced the expected pipeline orders for new products.
As a result, shipments lagged retail sales for the fourth quarter of 2008. Net sales for the fourth quarter of 2008 are currently estimated to drop 2.5% to $27.1 million. Estimated net sales for the full year 2008 dropped 6% to $112.9 million. The company’s previous fiscal year 2008 outlook for net sales was $120 million.
Based on retail sales data provided by ACNielsen, the company’s approximate share of the so-called masstige market was 8.1% for the 52 weeks ended Dec. 27, 2008 compared to 7.9% for the same period in the prior year.
This represents a 2.5% increase in Physicians Formula’s share of the masstige market, or a 7% increase in dollar sales, compared to growth of 4% for the overall masstige market during this period.
Inter Parfums Sees a Rise and a Fall
Prestige perfumer Inter Parfums, Inc. posted a 16% decline in net sales to $100.6 million for the final quarter ended Dec. 30, 2008. European-based product sales dropped 14% to $83.4 million, while U.S.-based figures slipped 24% to $17.2 million. However, the company 2008’s net sales were $446.3 million, up 15% from the prior year.
Chairman Jean Madar noted, “For 2008, the three largest brands within our European based operations all showed strong growth in local currency with Burberry up 10%, Lanvin up 17% and Van Cleef & Arpels up 77%. Sales by U.S.-based operations in 2008 included domestic sales of our first new Brooks Brothers fragrance collection and the international distribution of Gap and Banana Republic personal care products.”
J&J’s Full Year 2008 SalesJump 4.3% to $63.7 Billion
Johnson & Johnson’s 2008 sales were $63.7 billion, an increase of 4.3% over 2007. Operational growth was 1.9%, with currency contributing 2.4%. Domestic sales decreased 0.4%, while international sales increased 9.7%, reflecting operational growth of 4.6%.
Worldwide sales in the fourth quarter of 2008 were $15.2 billion, a decrease of 4.9% as compared to the fourth quarter of 2007. Operational results declined 1% and the negative impact of currency was 3.9%. Domestic sales decreased 6.9%, while international sales dropped 2.7%, reflecting operational growth of 5.4%,.
Net earnings for the year were $12.9 billion, while net earnings for the fourth quarter of 2008 were $2.7 billion. Last year’s net earnings were not released in the report to offer a percentage comparison.
According to the company, sales for the year reflect the strong performance of skin care lines Neutrogena, Aveeno and Clean & Clear; international sales of baby care products; and Listerine antiseptic mouthrinse.
Also contributing to growth were sales from the recently completed acquisition of Dabao, a leading moisturizer in China, according to the company in its report.
No Gains in 3Q Sales at Prestige Brands
Prestige Brands Holdings, Inc. reported that revenues for the fiscal 2008 thirdquarter ended Dec. 31, 2008 were flat. These results are largely attributable to a slowing retail environment and trade inventory reductions, according to the company.
Mark Pettie, chairman and chief executive officer, said, “In today’s challenging economic climate, we are generally satisfied that our total revenues are expected to be even with last year. Importantly, most of our focus brands performed better than their respective categories during the quarter.
“It is worthy to note that despite the economic circumstances affecting our revenue growth, the company continues to generate healthy free cash flow. Our recent decision to enhance our liquidity position by building our cash reserves to approximately $30 million is proceeding as planned with over $27 million on hand at Dec. 31.”
Sales Slip 3.4% at K-C in 4Q
Kimberly-Clark Corporation reported that net sales in the fourth quarter of 2008 decreased 3.4% to $4.6 billion. Operating profit slipped 7% to $623 million in the fourth quarter, compared to the prior year. Sales of personal care products decreased 2.5% from the fourth quarter of 2007. Personal care sales in North America declined approximately 2% versus the year-ago quarter; while in Europe, personal care sales fell approximately 16% in the quarter, mainly as a result of a 14% impact from weaker currencies, the company reported.
In developing and emerging markets, personal care sales slipped approximately 1%. However, growth in organic sales was broad-based, with particular strength in China, Russia, Turkey, Vietnam, Brazil and the Andean region in Latin America. K-C’s full year results fared better, as sales jumped 6.3% to $19.4 billion. The company stated that it expects a net sales decline of 4-5%, and an adjusted operating profit similar to 2008.
Acquisition Helps Chattem in Fiscal 2008 Report
Chattem, Inc.’s revenues for fiscal 2008 rose 7.4% to a record $454.9 million. According to the company, the gain was primarily driven by the five brands acquired from Johnson & Johnson in 2007, including Act, Cortizone-10 and Balmex. Net income for the fiscal year increased 11% to $66.3 million.
Fourth quarter revenues jumped 5% to $105.5 million. Revenue growth for the quarter was led by strong performances from Gold Bond, Icy Hot, Act, Aspercreme and Bullfrog, according to the company. Net income for the quarter rose 3% to $16.7 million.
P&G Beauty and Personal Care Fall Flat in Second Quarter
The Procter & Gamble Company’s fiscal second quarter sales fell 3% to $20.4 billion. The company attributed the decline to unfavorable foreign exchange and lower volume. Beauty net sales fell 4% to $4.9 billion, however, organic sales were in line with the previous year period. Retail hair care volume grew low-single digits behind solid growth in developing regions.
The company said every major retail hair care brand, including Pantene, contributed to volume growth led by mid-single-digit or higher growth of Head & Shoulders, Herbal Essences, Rejoice and Nice ‘N Easy. Professional Hair Care volume declined mid-single-digits primarily due to market contractions, according to P&G.
Personal cleansing volume decreased by high single-digits primarily due to trade inventory reductions and market contractions. Volume in skin care decreased mainly due to the divestiture of Noxzema, according to the company.
Prestige fragrances volume decreased high-single-digits due mainly to trade inventory reductions, market contractions and a shift in initiative timings to the second half of fiscal 2009, partially offset by market share gains.
Net earnings declined 10% to $799 million primarily due to a reduction in net sales and lower operating margin from higher commodity costs.
Oral care volume decreased primarily due to trade inventory reductions of Crest. Fabric care and home care net sales decreased 4% to $5.8 billion for the quarter.
Fabric care volume decreased primarily due to a double-digit reduction of Tide shipments from trade inventory reductions and share declines.
Home care volume was down low-single digits as growth of air care was more than offset by price-driven shipment declines of dish care and surface care. Baby care and family care net sales increased 3% to $3.5 billion on one percent volume growth.
For fiscal 2009, the company expects sales to grow by 2-5%.