Pershing Square Takes Stake in PG

Pershing Square Takes Stake in P&G

• Pershing Square Capital Management, a hedge fund led by CEO William Ackman, got cleared by the Federal Trade Commission to take a stake in Procter & Gamble, according to reports. Following the announcement, shares of P&G rose 4.4% to $64.09—a 52-week high. At press time, P&G shares were trading at $64.56.

If Ackman does pursue an investment, he may push for the sale of several divisions to bolster shareholder value, said reports.

As of 2010, Pershing amassed a position in Target Corporation, reported at 26 million shares.

Procter & Gamble independent directors said the board supports chief executive Bob McDonald and his turnaround plan, while William Ackman confirmed his stake in the world’s largest household products company is worth about $1.8 billion.

“The board is overseeing a plan to return P&G results to levels that produce the best long-term value for shareholders; unanimously supports the plan and chief executive officer, Bob McDonald, as he leads its implementation; and is monitoring its effectiveness,” the board said in a filing with the US Securities and Exchange Commission.

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Burberry Buys Back Its Fragrance License
• Burberry will pay €181 million ($221.5 million at current exchange rates) to buy out the license rights for its fragrance and beauty products from Inter Parfums SA, effective Dec. 31.

“To maintain flexibility in pursuing its objective to develop fully this business in the future, Burberry has served notice of its intention to terminate the license agreement with effect from December 31, 2012,” Burberry stated.

The two companies had been in talks since December 2011 about establishing a new operating structure for the Burberry beauty business. Burberry had until July 31 to determine whether it wished to buy out the unexpired portion of the license or continue the existing license, which runs through Dec. 31, 2017.

Inter Parfums acquired the Burberry fragrance license in 1993. Its most recent major introduction to the franchise was the Burberry Body scent line, which debuted worldwide on Sept. 1, 2011.

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TPR Acquires Cargo Cosmetics
• TPR Holdings has acquired a controlling interest in Cargo Cosmetics.

TPR is a New York-based based investor and operator of beauty and consumer brands. TPR has also provided transition services for large consumer products companies including Shiseido Cosmetics and Procter & Gamble. The firm’s principals have founded and developed such international brands as Zirh Men’s Skincare, John Varvatos Fragrances and French Connection Beauty. TPR owns oral care brand Sweet Breath as well as Freeze 24/7 Skin Care, Oscar Blandi hair care, and Nicole Richie and Reem Acra fragrances.

“We are very excited to add Cargo Cosmetics to the TPR portfolio, marking our entry into the color cosmetics category with such a strong brand name,” said Brian Robinson, president of TPR. “Cargo is a leading brand trusted by professional makeup artists and real women. We look forward to once again bringing the types of groundbreaking formulas and first-to-market technologies that put the brand on the map to consumers worldwide,” he added.

“I am truly excited to align with a company like TPR that is able to provide valuable resources to further expand Cargo, while still maintaining the brand’s heritage, integrity and my creative vision,” said Cargo Cosmetics founder Hana Zalzal, who will remain with the company as creative director.

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Physicians Formula’s Sales Rise 24%
• Physicians Formula Holdings, Inc. posted favorable financial results for the three months ended March 31, 2012. Net sales for the first quarter of 2012 rose 24% to $26.2 million. The net sales growth was driven by an increase in color cosmetics sales and expanded distribution of the skin care line. In addition, net sales were favorably impacted by a delay in the timing of various retail marketing programs. The company expects that these programs, which are accounted for as a contra-revenue item, will be implemented later in this fiscal year.

The company also noted that, in the food, drug and mass channel, its products achieved 9% point-of-sale dollar growth over the last 52 weeks versus the prior year period, whereas the overall masstige color cosmetics category only grew 7%, as reported by AC Nielsen. This made Physicians Formula the fastest-growing masstige color cosmetics brand in dollar sales among the major five masstige brands in food, drug and mass during this period.

Ingrid Jackel, chairwoman and CEO, stated, “We are pleased with our first quarter results, which exceeded both our top and bottom line expectations. Net sales growth was driven by better than expected demand of our color cosmetics products, as well as the planned distribution expansion of our skin care platform. Through the successful execution of our product and brand investment strategies, we have expanded our market share of the masstige category and maintained our retail sales momentum. We have returned our company to profitability by generating strong product performance while improving our financial discipline.”

Jackel continued, “During the quarter, our retail partners made the decision to shift certain marketing programs to later in the year. Overall, we expect our total marketing and brand investments to remain at originally planned levels for 2012.”

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Sales Rise 14% in Q2 at CCA
• CCA Industries’ sales increased 14.2% to $14.7 million in the second quarter ended May 31, 2012. For the six months, sales increased 11.6% to nearly $28.4 million.

“We are pleased to be reporting higher total revenues and net income for the first six months of fiscal 2012,” said Dunnan D. Edell, president and chief executive officer. “CCA’s financial position remains sound with no bank debt and the company presently has little international distribution in Europe, thus no financial exposure in that troubled marketplace.”

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High Ridge Brands Acquires White Rain
• Brynwood Partners VII’s portfolio company High Ridge Brands Co. has signed a definitive agreement to acquire the rights to the White Rain personal care brand from Sun Products. Additionally, as part of the transaction, High Ridge Brands is acquiring the Adorn, The Dry Look, Mink and Toni brands.
Terms and conditions of the transaction were not disclosed. White Rain, has a long history with US consumers, having been introduced by Gillette in 1952.

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Sales Soar at Sealed Air
• Sealed Air Corporation reported sales increased 70% to $1.92 billion in the first quarter due, in large part to the Diversey acquisition, which contributed a 66% increase in sales. The first quarter gain was also helped along by a modest increase in year-over-year results in North America and the Europe, Middle East and Africa (EMEA) region, and a 9% increase in developing regions, according to the company.

The Diversey segment reported a 2% decline in sales to $751 million. These sales results reflect an estimated 3% higher price and 2% lower volume primarily in North America and in EMEA, specifically in Europe, the company said. As part of its integration of Diversey, Sealed Air is undertaking a number of actions to integrate and realign its organization, further improve operating efficiencies and lower its overall cost structure to maximize cost synergies and better meet customers’ needs, the company said.

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IFF Reports Slight Drop in Sales
• International Flavors & Fragrances Inc. (IFF) posted a 1% drop in first quarter 2012 revenue to $711 million.

“IFF continued to execute its strategy and generated results broadly in line with our expectation,” said IFF chairman and chief executive officer Doug Tough. “The diversity and strength of our category and geographic portfolios, combined with our cost discipline, helped ease the impact of rising raw material costs, softness in fragrance ingredients, and a challenging macroeconomic environment. Going forward, we expect our business trends will improve over the course of the year as we continue to capitalize on our strong emerging market presence, healthy research and development pipeline, and profit improvement initiatives.”

In the fragrances business unit, sales decreased 4%. Operating profit declined 18% to $56 million as increases in raw material costs and volume declines more than offset higher prices and cost control initiatives. Fine fragrance and beauty care sales showed significant improvements versus the fourth quarter 2011 driven by positive trends in fine fragrance, according to IFF. In functional fragrance, strong new wins in fabric care continued to drive solid sales results.

Despite a sequential improvement versus the fourth quarter 2011, fragrance ingredients remained under pressure as higher prices to protect margin continued to have a negative impact on volume, said IFF.