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Arden, Zeta-Jones Finalize Deal

<CS:BOLD>NEW YORK -- Elizabeth Arden announced today that Catherine Zeta-Jones has signed as the brand's global beauty spokesperson. <BR><BR>This announcement confirms a report that appeared in WWD on Monday. <BR><BR>Zeta-Jones has been signed to an...

NEW YORK — Elizabeth Arden announced today that Catherine Zeta-Jones has signed as the brand’s global beauty spokesperson.

This announcement confirms a report that appeared in WWD on Monday.

Zeta-Jones has been signed to an initial four-year contract and will begin appearing in Arden ads in June. The first set of ads was shot in January in Toronto by photographer Torkil Gudnason.

While Arden executives refused to say what they had paid for Zeta-Jones, industry sources estimate that she will be paid upward of $2 million a year — or as much as $8 million over the life of the contract.

“We made the decision to sign Catherine because she works wonderfully for the brand,” said Ron Rolleston, executive vice president of marketing for Elizabeth Arden. “She has global appeal, a terrific personal style and she’s very sophisticated. We see her involvement with us as a new chapter for the brand.”

According to Rolleston, Zeta-Jones will be shooting an image campaign for Elizabeth Arden, as well as helping to launch a new Arden fragrance that will be on-counter in August. The major portion of the campaign will be print, although TV is under discussion. While the print schedule is still being finalized, Rolleston noted that fashion and beauty magazines such as Vogue will be part of the plan.

The image campaign will be taglined “Open for Beauty,” and will incorporate the company’s signature red door icon. The first ads with the new imaging will appear this month, although they will not include Zeta-Jones until June.

With the new campaign, the intention is to bring Arden back into the forefront of consumer consciousness, said Rolleston. “Elizabeth Arden has an incredible history as a luxury brand,” said Rolleston. “It’s a brand that women have very positive responses to. Catherine is one of the most well-known celebrities today, and her beauty and acclaim is recognized around the world. She fulfills so many roles both personally and professionally — as wife, mother, and acclaimed actress. All of this made her the perfect choice to be the spokesperson for the Arden brand.”

In addition to the new fragrance in August, the company also plans additions to the Ceramides skin care line, as well as to introduce a new fragrance in the Elizabeth Taylor line this fall. An Elizabeth Taylor color cosmetics line is also in the works as well. The company plans to refocus its color business. That effort is starting first in Europe this year; in the U.S., the color cosmetics business will be completely overhauled in July 2003. “We’re interested in operating in all the different product categories and want to refocus the business in color,” said Rolleston.

As reported, the Zeta-Jones deal comes on the heels of a tough season for Arden. The company announced last week that it expected a fourth-quarter loss of $1 million to $4 million before income taxes depreciation and amortization basis, excluding $2 million in restructuring costs. Arden also said on Thursday that it expected that it would be in violation of its loan covenants and would cut one-tenth of its U.S. workforce. However, Arden said that while it expects the difficult economic environment to continue for the first half of the year, it expects a “modest recovery” in the travel retail market in the second half. It projected fiscal 2003 EBITDA of $95 million to $105 million, with net sales of $800 million to $840 million.