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BANANA BOAT SALES RISE 33% TO OVER $ 32 MIL.

This article was originally published in The Tan Sheet

Executive Summary

BANANA BOAT SALES RISE 33% TO OVER $ 32 MIL. through the first nine months of 1993 ended Sept. 30 compared with the same period in 1992, according to Playtex Family Products, the new distributor for the Sun Pharmaceuticals line. Sales for the sun and skin care brand were $ 26.9 mil. in 1992, up 26.8% over the previous year. The figures were disclosed by Playtex in a Nov. 12 filing with the Securities and Exchange Commission covering a public stock offering and recapitalization plan. Banana Boat sales have grown at a compounded annual rate of 42% since 1988, when sales totaled $ 6.6 mil., the filing states. The brand was launched in the early 1980s. Banana Boat recently achieved the number-two position in the sun care market with an approximately 13% market share (by unit volume) in the first six months of 1993, up from 11 % in 1992, Playtex said. Playtex officially became Banana Boat's primary U.S. distributor on Nov. 1. Previously, the line was sold by independent distributors across the country. Playtex also has become the sole distributor for Banana Boat in Canada and Puerto Rico. Under terms of its distribution agreement with Playtex, Sun Pharmaceuticals will continue to manufacture the product line, establish marketing plans and develop new products. In December 1992, Playtex acquired a 22% equity stake in Sun Pharmaceuticals for $ 5 mil. Sun is controlled by Boston-based investment holding firm, Thomas H. Lee Equity Partners, and certain affiliates and employees of the Lee company. Lee also represents the largest shareholder in Playtex. Playtex plans to expand distribution of the Banana Boat line via its large, centralized sales force of 160-180 reps. The line is sold by mass merchandisers, drug chains and food stores. Playtex also expects to build sales with new product introductions and increased ad spending, the company said. VP-marketing for Banana Boat at Playtex is Ken Meeker, who was the marketing executive in charge of the Bain de Soleil brand when it was part of Charles of the Ritz. Banana Boat product extensions planned for 1994 include an "all natural mineral" group of sunscreens with SPFs of 8, 15 and 25. The active ingredient in the sunscreen line is a micronized form of titanium dioxide that was designed to reduce the ingredient's opaque appearance on skin, Playtex said. Playtex will more than triple Banana Boat's advertising budget in 1994, with an emphasis on radio promotions, the firm said. Playtex also will continue to use past Banana Boat promotions focusing on local community and sports events, in addition to the brand's "comprehensive" in-store display program, the company indicated. The Banana Boat line includes approximately 42 SKUs including tanning oils, lotions with SPFs from 4 to 50-plus, a Sport line, a Face line, Baby and Kids lines, self-tanners, after- sun gels and lotions, lip products and Sooth-A-Caine sunburn products. The Playtex registration statement outlines a $ 1.1 bil. recapitalization plan designed to reduce debt and interest expenses. The recapitalization includes the offer of up to 20 mil. shares at approximately $ 13 a share, with expected proceeds of $ 260 mil, and a notes offering expected to raise $ 360 mil. The refinancing is expected to reduce long-term debt, which approaches $ 1 bil. Playtex has not been publicly traded since 1986 when it was taken private in a management-led leveraged buyout. Playtex Family Products sells tampons and hair care items in addition to suncare products and is no longer related to Playtex Apparel, which was sold to Sara Lee Corp. in 1991. For the nine months ended Sept. 25, Playtex had sales of $ 315.1 mil., up 7.8%.
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