Dial Expands Personal Care Portfolio With Gillette Antiperspirant Buy

Dial will enter the antiperspirants/deodorants category with the purchase of the Right Guard , Soft & Dri and Dry Idea brands from Gillette, the Henkel division announced Feb 20.

The company will acquire the products for approximately $420 mil. in a deal slated to close by the end of the first quarter, the firm said.

Procter & Gamble and Gillette were required to divest the brands as a condition of FTC approval of the firms' $57 bil. merger, which sparked antitrust concerns regarding overlap in areas like the antiperspirant/deodorant category, where both companies hold a significant market share (¹ 'The Tan Sheet' Oct. 3, 2005, In Brief).

For the 52 weeks ended Jan. 22, P&G was the No. 1 vendor of antiperspirants and deodorants in food, drug and mass retailers excluding Wal-Mart with roughly $331.2 mil in sales, according to Information Resources, Inc. Gillette was number two with $198 mil.

Right Guard men's products and women's offerings under Soft & Dri and Dry Idea are "a perfect fit to our core business body care and will further increase growth and profitability of this business," Henkel Cosmetics/Toiletries Exec VP Hans Van Bylen stated in a press release announcing the deal.

The antiperspirants are a particularly good complement to Dial's personal cleansing products, which include the Dial , Tone and Coast brands, Henkel added.

Future plans could include sharing technologies to develop new products or formulas, the firm said. However, Henkel declined to give specifics regarding upcoming launch or marketing programs for the antiperspirants.

Combined sales of Right Guard, Soft & Dri and Dry Idea were roughly $275 mil. in 2005, 80% of which was generated in North America, the firm noted.

The star of the portfolio is Right Guard, which currently is the number three men's antiperspirant brand at mass, according to Henkel.

Right Guard Sport generated about $59.6 mil. in sales in food, drug and mass retailers excluding Wal-Mart for the 52 weeks ended Jan. 22, while Right Guard Xtreme Sport earned roughly $23 mil. during the period, according to IRI.

Right Guard Sport debuted in 1996, and Xtreme Sport in 2000, backed with a $61 mil. marketing campaign.

Gillette has sought to continuously update Right Guard with new innovations. For example, the firm relaunched Xtreme Power Stripe , which originally debuted in 2002, with a more effective formula last year.

Other products marketed under the Xtreme label include Cool Spray, which rolled out in 2004.

Dry Idea and Soft & Dri, which have received comparatively less support from Gillette in recent years, are not major players in the market. However, Dry Idea raked in sales of approximately $22 mil. during the 52 weeks ended Jan. 22, IRI data show.

The acquisition will better position Dial to challenge P&G's men's business, which includes Sure and Old Spice , as well as Axe marketer Unilever.

Conversely, the company will likely face an uphill battle taking market share in the women's category from P&G's powerhouse Secret brand. Secret Platinum generated $73.5 mil. in sales for the year ended Jan. 22, according to IRI.

Separately, Henkel reported fiscal 2005 results Feb. 21. Cosmetics/Toiletries sales advanced 6.2% to $3.1 bil. (€1=$1.19), up 1.3% on an organic basis. In North America, the unit's "sales performance...was primarily attributable to the expansion of the Dial business," according to the firm. EBIT in the division was $381.4 mil., up 10.5%.

Overall net sales rose 13%, or 3.5% on an organic basis, to $14.2 bil., and operating profit grew16.7% to $1.4 bil.

In 2006, Henkel anticipates organic sales growth in the 3%-4% range, the company said, adding operating profit likely will increase 10%.

[Editor's note: This story was contributed by " ² The Rose Sheet ," your source for toiletry, fragrance & skin care industry news. For more information call 1-800-332-2181.]