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Just What the Doctor Ordered



Spring brings a fresh start for Physicians Formula.



By Melissa Meisel, Associate Editor



Published March 30, 2010
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Just What the Doctor Ordered

After suffering alongside other cosmetic marketers in the financial roller coaster that was 2009, Physicians Formula is looking forward to Spring 2010 to breathe life back into the company with a new chief financial officer and color-coordinated product rollouts.

Created in 1937, the company develops, markets and distributes color-correcting cosmetics for sensitive skin. Physicians Formula products are sold in approximately 23,700 stores including stores operated by Wal-Mart, Target, CVS and Rite Aid alongside other “masstige” brands such as Almay and Revlon.

In its latest financial report for the fourth quarter ended Dec. 31, 2009, net sales fell 26% to $22.3 million. For the full year 2009, net sales slipped 46% to $77.8 million.

Based on retail sales data provided by ACNielsen, Physicians Formula’s approximate dollar share of the mass market prestige—known as the “masstige” cosmetics market —was 7.5% for the 52 weeks ended Jan. 23, 2010 compared to 8.1% for the same period in the prior year. This represents an 8% decline in the company's masstige market share. The overall dollar sales for the masstige market declined 2.0% during this period.

"Although our overall market share decreased as expected versus last year, mainly impacted by the loss of a major customer, we saw an increase in dollar sales for our strategic platforms, including our bronzers, Mineral Wear face powders, and natural and organic products,” noted Ingrid Jackel, chairwoman and chief executive officer of Physicians Formula.

“Having rationalized 28% of our SKUs and with the promising start of our 2010 new products, we believe that we have a strong product mix as we begin 2010 that will enable us to increase both the efficiency of our product set and our market share in our core categories. In fact, after seeing our early 2010 new product sales, we believe we are in a good position to grow our top-line in 2010."
 
New Shimmer Strips Custom Eye Enhancing Mascara make lashes gleam and eyes pop.
In executive news, last month Physicians Formula Holdings, Inc. appointed Jeff Berry as its chief financial officer (CFO). He has served as the company's interim CFO since May 2009, when he replaced Joseph Jaeger. Prior to that, Berry was on the company's board and had served as the chairman of the company's nominating and corporate governance and compensation committees and as a member of the audit committee. He agreed to resign from the board upon accepting the interim CFO position in order to comply with NASDAQ listing requirements.

"We are delighted that Jeff has agreed to assume the role of CFO," said Jackel. "We believe Jeff's strategic and financial skills, as well as his leadership capabilities, will play a critical role in helping the company achieve its long-term growth and profitability objectives."

Besides having a new CFO at the helm, the brand hopes its latest cosmetic innovation for Spring 2010 will dazzle shoppers. Its latest rollouts for the season include Physicians Formula Shimmer Strips Custom Eye Enhancing Mascara ($10.95), said to make lashes gleam and eyes pop. Similar concepts for the season includes Physicians Formula Shimmer Strips Custom Eye Enhancing Shadow & Liner – Pop Collection
($10.95), a wet or dry eyeshadow palette that can be combined in over 100 different ways, as well as the Physicians Formula Shimmer Strips Custom Eye Enhancing Gel CreamLiners ($10.95). Each trio features a black shade for dramatic definition plus two perfectly coordinated pearlescent shades to accentuate natural eye color—much like a good cosmetic product should.


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