Elizabeth Arden 2002 Brand Initiatives To Revisit Red Door Salon Image
This article was originally published in The Rose Sheet
Executive Summary
Elizabeth Arden has targeted its namesake color cosmetics and fragrance brand for new advertising initiatives and product innovation in 2002, CEO Scott Beattie told analysts during a conference call Dec. 5
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Elizabeth Arden has targeted its namesake color cosmetics and fragrance brand for new advertising initiatives and product innovation in 2002, CEO Scott Beattie told analysts during a conference call Dec. 5. A "creative" international ad campaign for the Elizabeth Arden brand is slated to break in February, Beattie said, noting, "our advertising campaign to support the Elizabeth Arden brand both domestically and internationally has been refocused back into the Red Door" salon business. The campaign is expected to "reconnect the consumer with the Red Door image and provide some additional support" for the rest of the line, the exec said. When FFI acquired the brand from Unilever last year and changed its name to Elizabeth Arden, Beattie announced intentions to capitalize on the success of the salon business (1 , p. 3). The Red Door Salons, owned by Elizabeth Arden Salon Holdings, operate independently of Arden. In addition, Arden will support the brand's color collection with a new ad campaign developed in Europe, where it will break in the spring before rolling out to the U.S. in the fall. A "renewed marketing focus" for Arden's Ceramide skin care portfolio also is a priority, the firm said, adding the line is a "strong franchise" that has been "overlooked in the past." Several line extensions are slated to debut in the first half of the year, the company noted. In September, the Elizabeth Arden fragrance collection will be expanded with scent to be launched in the U.S., Europe and select locations in the Far East, Arden noted. An additional fragrance will debut under the Elizabeth Taylor label shortly thereafter. The new emphasis on Elizabeth Arden comes as the company completes its first year of integration; FFI acquired Arden in January (2 (Also see "Elizabeth Arden acquisition" - HBW Insight, 29 Jan, 2001.), In Brief). "When we acquired the business, not only did we not have control of the product and promotional calendar for most of this year, but because of the supply chain pipeline, most of the commitments were made by Unilever prior to ownership," Beattie explained. Arden did cancel several new product launches planned under Unilever in 2001 to allow time to integrate the operations and organization of the business, he added. The new marketing campaign and planned product launches could help boost sales for the Arden brand, which were down 11% year-to-date, the firm reported. Elizabeth Arden's sales for the fiscal third quarter ended Oct. 27 were $302.9 mil., representing an 85.4% gain over the prior-year period, primarily as a result of the Arden acquisition. Net income for the quarter increased 167.2% to $33.4 mil. Sales also benefited from the firm's multi-tiered distribution, which includes high-end and mid-tier department stores and mass market outlets, according to Beattie. "An environment like this underlines the importance of having that diversification in your customer base," he said. Mid-tier retail sector sales remained "on plan," the firm reported. Sales to J.C. Penney, the firm's second largest account, were up 19% for the quarter, while sales to Sears rose 27%, the exec stated. Sell-through in the mass market was "somewhat spectacular" for the quarter, Beattie said. Wal-Mart and Target retail sales are up 31% year-to-date, although chain and drug accounts "have not fared quite as well," he said. A $6 mil. reduction in department store retail sales was one reason the company was unable to meet previous revenue projections of $320 mil. for the quarter, Beattie said. The exec attributed the shortfall to the Sept. 11 terrorist attacks, noting the events "caused about one week of lost sales in department stores." Other contributors to Arden's weaker-than-expected sales were a $3 mil. decline in travel retail sales, $5 mil. reduction in military business and a Middle East sales decline of approximately $2 mil., Beattie said. Arden was unable to reaffirm its guidance for the fourth quarter and fiscal 2002. The company earlier projected it would generate sales of $789 mil.-$809 mil. for the year (3 , p. 4). The firm plans to address expectations in January after reviewing the holiday sell-through. |