BERLIN — Wella announced it will cut 1,200 jobs in light of a cooperative supply chain contract signed with Procter & Gamble Wednesday.
The contract will consolidate both companies’ activities in production and distribution, and aims to improve efficiency and build synergies between the two firms, as well as address overcapacity, Wella said in an official release. Several production centers will be closed worldwide, in favor of joint production sites in strategic areas.
In the U.S., P&G’s Clairol headquarters, based in Stamford, Conn., will remain open as Global Retail Hair Color Headquarters and manufacturing facility for most of Clairol-Wella North America. The site, which staffs 750 employees in research and development, manufacturing, business operations, marketing and external relations, will consolidate two facilities into one building. P&G will sell the other building to the city of Stamford; it is slated to become a public school.
Prior to the decision of keeping the Stamford site, it had been rumored for nearly six months that the facility would be shut down.
Rob Matteucci, president of Clairol, stated in a release that the company is “delighted that these decisions represent a win for [Stamford] along with an ongoing Clairol-P&G presence in Stamford.”
However, the Stamford plant will launch a cost and productivity optimization program which will lead to a reduction of approximately 285 positions over the next three years, a number a company spokesperson said would be achieved first through attrition, then retirement, which also includes natural head count reduction.
The consolidation of Wella Hair Care production volume in North America into P&G sites will also result in the closure of Wella plants in Richmond, Va., and Mexico City.
Together, Wella and P&G currently employ about 13,000 people in production and distribution in the areas of beauty care and prestige and professional care.
P&G said that, generally speaking, severance packages will be offered, including cash payments, continued benefits for a period of time, outplacement assistance, and a retraining allowance.
As a result of the supply chain consolidation, Wella also announced that Emil Kiessling GmbH, a Wella subsidiary based in Georgensmünd, Germany, that specializes in private label production, will be sold.— Melissa Drier and Andrea Nagel, New York
Avon Profits Up 36 Percent
NEW YORK — Avon posted its strongest second-quarter growth rate since 1990, as earnings jumped 36 percent and sales rose 13 percent.
The results — spurred by growth in its international operations — were so strong that the company raised its 2004 earnings expectations to $1.72 per share, up from $1.70. But sales in the U.S., Avon’s largest market, increased just 3 percent, causing the direct seller’s stock price to dip Wednesday.
Still, earnings for the quarter shot up 36 percent to 49 cents per share from 36 cents in the year-ago period. Sales rose 13 percent to $1.84 billion from $1.63 billion in 2003, driven by a 17 percent increase in beauty product sales.
Net income, meanwhile, increased 35 percent to $232.3 million, or 49 cents per share, from $171.5 million, or 36 cents per share, during the second quarter of 2003. This included a 1 cent gain from a tax audit settlement.
“The company has never been in better shape,” Avon’s chairman and chief executive officer Andrea Jung said in a conference call to investors.
Executives credited the gains to better-than-anticipated international growth. In Russia, Avon’s fastest growing market, sales grew more than 80 percent, while Asia-Pacific sales increased 20 percent, driven by a 60 percent surge in China.
U.S. sales, though, were not quite as strong. They grew 3 percent overall, with beauty product sales up 6 percent and beauty plus product sales up 4 percent.
Executives pointed out that the number of active representatives rose 11 percent company-wide and 4 percent in the U.S.
“It’s a great time. It’s hard not to feel an unprecedented optimism,” Jung said. “This is what it looks like when all of Avon’s strategies work together.” — Carrie Melago
Unilever Net Rises 33%
LONDON — Net profit at Unilever, the Anglo-Dutch food-to-fragrances company, rose 33 percent to 823 million euros, or $991.9 million, from 618 million euros, or $703 million, in the second quarter due chiefly to an increase in income from fixed investments, and lower interest charges and taxes.All figures are converted from the euro at the average exchange rate for the corresponding periods.
Sales at the company, the icon brands of which include Dove, Lux and Knorr, dipped 3 percent to 10.84 billion euros, or $13.06 billion, from 11.16 billion euros, or $12.70 billion, due overall to flat sales of leading brands, poor ice cream and instant tea sales in Europe and weak consumer confidence during the second quarter in key markets such as Europe and North America.
Operating profit rose six percent to 1.33 billion euros, or $1.6 billion, from 1.26 billion euros, or $1.43 billion, in the quarter ending June 30, the company said in a statement Wednesday.
Unilever reported a gain of 20 million euros, or $24.1 million, in fixed investments from the sale of shares in Elizabeth Arden, which it formerly owned.
The company does not break out sales for the prestige fragrance division. The personal care division, which includes prestige fragrances, saw sales rise 1 percent to 2.79 billion euros, or $3.36 billion. — Samantha Conti
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)