Wake-up Call for AM Cosmetics

November 8, 2005

After years of falling sales, this mass market cosmetics fiirm may have found the right chemistry

With new management in place, back room operations in order and marketing strategies set, AM Cosmetics is ready to grow again. It’s been nearly four years since the company was formed after a string of acquisitions by Morning- side Capital. But when the Westport, CT financial firm devoured such well-known mass market brands as Wet ‘n’ Wild, Sweet Georgia Brown and Black Radiance, it suffered from a bad case of indigestion. Four years ago, annual sales totaled nearly $190 million, but by the middle of last year, sales for the 52-weeks ended May 11 had dropped more than 20%. According to one executive, sales fell as former management became more interested in financial issues rather than brand support.

As firms were acquired, key brand teams were eliminated and retailer support waned. At one point, in fact, retailers were receiving promotional information just three weeks prior to shipping. All that began to change, however, when Arnie Zimmerman joined the company in January, 1999. He restructured agreements with banks and brought in a management team with experience in the cosmetic industry, including Stephanie S. Hayano as executive vice president of global marketing.

“The brands had great equity despite the upheaval,” recalled Ms. Hayano. “We had seven brands, but they were all promoted to retailers as appealing to teens.”

Besides confusion in brand positioning, back room operations also suffered. Each brand used different computer systems, making tracking and forecasting operations difficult. “Now all of our brands are on the same platform in terms of tracking orders and forecasting. We’re ready to move forward,” said Ms. Hayano.


Target Marketing
While revamping the company’s operations, AM executives began toying with the notion of positioning brands to appeal to a particular lifestyle and consumer attitude. Relying on gut instinct and backed up by data supplied by Spectra, a Chicago-based market research team, AM Cosmetics executives learned that some brands may appeal in one store location and not in another. For example, some stores within a chain are perfect for Wet ‘n’ Wild which appeals to women with household incomes of $40,000 and higher. In contrast, Artmatic appeals to older women in more rural settings who have household incomes of $20,000. As one might expect, the Artmatic brand does best in dollar stores.

This year, the Wet ‘n’ Wild lineup has been bolstered by several new formulas such as a lip-plumping pencil which contains yeast extract to make lips appear fuller. Capitalizing on another trend, Wet ‘n’ Wild has also introduced a body gel with glitter.

“They’re great products with the latest technology at a great price,” insisted Ms. Hayano. “We have all the technology that the prestige brands have.” The company is also a major player in the ethnic cosmetics category with its Tropez and Black Radiance brands. According to Ms. Hayano, Spectra data revealed that the Tropez brand also appeals to Latin and Asian consumers.

At the same time, the Sweet Georgia Brown line is targeted at preteens and teenagers, while the Lord & Berry brand is AM’s version of “class in mass.” Ms. Hayano noted that this year Lord & Berry will concentrate on expanding its share by introducing new products such as a long-wearing eyeshadow and a 3-in-1 pencil.


Nailing It
Prior to joining AM Cosmetics, Ms. Hayano had been with Del Laboratories, which has a big presence in the nail care category with its Sally Hansen franchise. Given her background, it should come as no surprise to learn that AM is making a big push into nail care this year via its Jonel brand. Although nail care sales are flat, Ms. Hayano insisted Jonel should be able to make in-roads in a category where consumers are always willing to try new products.

According to A.C. Nielsen data, nail care sales total $1.1 billion. Nail enamel accounts for 38% of that total, followed by abrasives and implements (26.9%), artificial nails (23.5%) and treatment (11.6%). According to Ms. Hayano, Sally Hansen was the only brand to address all four segments of the nail care category. “But the brand is vulnerable because it’s not trendy and is recognized more for nail treatment rather than color or beauty,” she insisted.

Working with the theme, “Beautiful nails for the real world,” company executives believe Jonel can create a buzz with new products such as Moisturize It and Grow It, names that allow women to easily choose the correct product. “Nail care has become very confusing,” insisted Ms. Hayano. “Women are product loyal but not brand loyal. They’ll buy one brand of top coat and a different brand of enamel.”

Unlike other AM Cosmetics brands, Jonel is not positioned as a budget line. Although some SKUs retail for just 99 cents, nail kits retail for as much as $5.99. And, unlike Wet ‘n’ Wild, Lord & Berry and the rest, Jonel will be supported with ads in leading women’s magazines.

With its new emphasis on brand management, Ms. Hayano said the company projects an aggressive growth pattern, although she wouldn’t reveal specific estimates. But in an intervew with Women’s Wear Daily last year, Mr. Zimmerman said he hoped to double AM Cosmetics’ sales by the end of this year to about $300 million. If he can pull it off, Mr. Zimmerman and his team may create the fastest makeover in the history of the cosmetics industry.

Related End-User Markets:

Related Raw Materials:

  • What’s Up with Brexit?

    What’s Up with Brexit?

    March 9, 2017
    During In-Cosmetics, industry experts from the CTPA will weigh in on what’s ahead for the beauty industry.

  • How We Clean

    How We Clean

    Tom Branna, Editorial Director||March 6, 2017
    Consumers describe what makes them tick and what ticks them off about household cleaning products.

  • Fit for Fitness

    Fit for Fitness

    Christine Esposito, Associate Editor||February 21, 2017
    Kinx Active is a new brand targeting women who want beauty products that can stand up to their fitness routines.

  • New Faces in Familiar Places

    New Faces in Familiar Places

    Tom Branna, Editorial Director||March 1, 2017
    The American Cleaning Institute officially welcomed its new president.

  • Special Delivery

    Special Delivery

    Tom Branna, Editorial Director||March 1, 2017
    UV protection is important, but what good is that sunscreen if consumers won’t apply it?

  • The Green Dot

    The Green Dot

    John Kim and Lambros Kromidas, PhD*, Shiseido Americas||March 1, 2017
    Insights into one of the most used trademarks in the world.

  • An Essential Read

    An Essential Read

    Tom Branna, Editorial Director||March 1, 2017
    Industry expert Nadim Shaath takes the reader on a fascinating journey through the history and the future of essential oils.

  • Sustainability, Brexit and AI Are in Focus at In-Cosmetics

    Sustainability, Brexit and AI Are in Focus at In-Cosmetics

    March 1, 2017
    In-Cosmetics Global 2017 will take place in London, April 4-6, 2017

  • What the Halal  Is Going On?

    What the Halal Is Going On?

    Imogen Matthews , In-Cosmetics||February 2, 2017
    Demand for these beauty products is surging thanks to a fastgrowing Muslim population.

  • Relief for Sensitive Scalps

    Relief for Sensitive Scalps

    Guadalupe Pellon and Annette Mehling , BASF||February 2, 2017
    BASF researchers detail the attributes of the company’s highly effective hair care system focusing on scalp sensitivity.

  • Defining Clean Skin

    Defining Clean Skin

    Nava Dayan PhD, Dr. Nava Dayan LLC||February 1, 2017
    A look at the issues, research and history surrounding this controversial topic.

  • Linked In

    Linked In

    Christine Esposito , Associate Editor||February 1, 2017
    Through virtual reality, apps and connected devices, beauty and personal care brands can strengthen their customer relations

  • Hitting the Right Notes

    Hitting the Right Notes

    January 6, 2017
    Agilex Fragrances is the leader in the middle market fragrance category.

  • The Smell of Clean in 2017

    The Smell of Clean in 2017

    January 6, 2017
    Changing consumer lifestyles and demographics are impacting the scents found in the household cleaning category.

  • On the Edge

    On the Edge

    January 6, 2017
    Expanding beauty brands to watch in 2017

  • A New Contender?

    A New Contender?

    January 6, 2017
    Detergent sales are up, innovation continues and Henkel is determined to make it a dogfight in the segment.

  • Engagement 2016

    Engagement 2016

    January 6, 2017
    CSPA convenes in Fort Lauderdale for annual meeting.

  • Slow & Steady

    Slow & Steady

    Tom Branna, Editorial Director||December 1, 2016
    In a tumultuous environment, steady gains posted in the industrial and institutional cleaning sector are welcomed.

  • The World Comes to Orlando

    The World Comes to Orlando

    Tom Branna, Editorial Director||December 1, 2016
    More than 1,600 chemists traveled to Florida for the IFSCC Congress

  • The Plex Phenomenon

    The Plex Phenomenon

    Denise Costrini, Croda North America||December 1, 2016
    Croda details the hair-protecting qualities of bond multipliers and the company’s new bond-building formulation system.

  • New Hair Care Ingredients

    December 1, 2016
    Check out the latest releases from suppliers.

  • Hair & Now

    Hair & Now

    Melissa Meisel, Associate Editor ||December 1, 2016
    The shampoo and conditioner category is expanding with modern takes on these classic formulations.

  • Perform or Perish

    Perform or Perish

    Christine Esposito, Associate Editor||December 1, 2016
    Success in today’s skin care sector begins with active ingredients, formulated in products that address modern-day issues.

  • Aromas Revealed: Fragrance Disclosure

    Aromas Revealed: Fragrance Disclosure

    Daniel Greenberg, Agilex Fragrances||November 2, 2016
    Fragrance disclosure is a potentially dangerous issue.

  • New and Noteworthy:  Fine Fragrance Roundup  for Fall 2016

    New and Noteworthy: Fine Fragrance Roundup for Fall 2016

    Melissa Meisel, Associate Editor||November 2, 2016
    Check out the latest launches in fragrance this season.

  • Soap Opera

    Soap Opera

    Christine Esposito, Associate Editor||November 2, 2016
    FDA’s recent antibacterial ruling has soap sector stakeholders scrambling to keep some ingredients in their formulation kit.

  • New Ingredients for  Household Cleaners

    New Ingredients for Household Cleaners

    Tom Branna, Editorial Director||November 2, 2016
    Here are ingredients introduced by suppliers during the past 12 months.

  • A-Okay!


    Imogen Matthews, For In-Cosmetics||November 2, 2016
    K-Beauty influences cosmetic development around the world.