By  on March 4, 1994

NEW YORK -- Ultima II is back in the eye of controversy.

Earlier this week, May Department Stores Co. said it has decided to discontinue the business, confirming a report that appeared in WWD on Monday.

"The line no longer fits in our cosmetics department and its performance has been sluggish," the St. Louis-based retailer said in a statement. "In addition, Ultima's interest in broadening its channels of distribution beyond department stores has diluted its cachet."

Asked to elaborate, a May Co. spokesman said Ultima is "widely distributed in a variety of retail formats."

"The focus of our cosmetics business has always been with vendors dealing with department and better specialty stores," the spokesman said.

Ultima is sold in the majority of May Co. divisions, with 1993 retail sales estimated by industry sources at $15 million to $20 million.

The Revlon division found itself in the midst of a small furor when it entered J.C. Penney Co. in 1991. The New York-based R.H. Macy & Co. discontinued the business completely, although executives denied that Penney's was the reason. Other stores cut back the number of doors stocking Ultima II.

But since then, Ultima executives have insisted that their focus remains steadfastly and solely on department stores, with a national distribution of 2,000 doors.

This week, Revlon rebutted May Co.'s assessment with its own statement, maintaining that Ultima's business is anything but sluggish.

"We never comment on our business with a specific customer, but retail sales for Ultima II in 1993 were up 18 percent from 1992 in comparable prestige doors," said Jerry Levin, president and chief executive officer of Revlon Inc. "To our knowledge, May Co. participated in that growth.

"We are totally committed to growing our specialty and department store business," Levin continued. "Ultima's cachet is fabulous, as evidenced by our rapid growth in prestige doors."

May Co.'s explosive decision comes at a time when Ultima appears on the verge of generating some momentum. The division, which previously has relied on its color cosmetics business, is preparing to reenter the fragrance arena in September after a four-year absence According to industry sources, Ultima's wholesale volume climbed to $80 million last year.

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