By  on January 14, 2005

NEW YORK — Markwins International is playing with the big beauty brands.

This spring, its Wet ‘n’ Wild division will add several new items including an Ultimate Sheer Tinted Moisturizer and an Ultimate Cover Smooth Foundation. Both are advanced, quality formulations not typically associated with budget brands.

Wet ‘n’ Wild has been owned by Markwins International and has operated as Markwins Beauty Products since 2003 when the California-based company acquired the brands from AM Cosmetics.

These two sophisticated launches illustrate just how far Markwins has progressed from its roots as a supplier of inexpensive imported blockbuster kits to a full-fledged beauty resource with estimated sales exceeding $200 million. “They are playing with the big boys now,” said industry observer Allan Mottus.

Once considered just a seasonal and promotional resource, Markwins is now classified as a major beauty manufacturer — one with brands giving established names such as Revlon and Del Laboratories’ NYC a run for their money.

Markwins got its start selling promotional blockbusters to department stores under The Color Workshop banner several years ago. The next step was mass market kits bearing a variety of names such as ACT. The company established its own production plant overseas, allowing it to launch value-packed kits at sharp prices. “I don’t know how they can put such quality out at such cheap prices,” wondered one competitor, who asked not to be named.

The kits have been staples at chains such as Walgreens, Wal-Mart, Kmart and even Kohl’s.

Five years ago, these kits supplanted fragrances as mass’ best-selling holiday item. This Christmas, Markwins initiated category management programs for the division that resulted in higher-than-ever sell-throughs, according to Markwins International’s Bill George, president of North American operations. “Markwins is always a Christmas staple,” said Valerie Cheyney, buyer for Happy Harry’s in Newark, Del. “As always, Markwins did well this year.”

But the kits are only one part of the Markwins story. The acquisition of AM was a turning point for the firm. Many retailers’ eyebrows were raised when Markwins acquired AM and its Wet ‘n’ Wild, Black Radiance, Tropez and Jonel logos. The concern was whether a company known for promotional imports could sustain a major beauty force.Shawn Haynes, who just this week was promoted to senior vice president of marketing for Markwins Beauty Products International, is the first to admit it wasn’t easy. All of the systems used by AM Cosmetics needed to be integrated with Markwins. Even within AM, there were different programs used for different brands. The first few months were rocky — shipments were late and retailers wondered if Markwins had taken on too much. In less than a year, however, Markwins brought shipment rates back up to 98 percent and embarked upon a reinvigoration program for the brands.

Starting with Wet ‘n’ Wild, Markwins Beauty Products has upgraded the look and fixturing of the budget brand. For spring, there is a flood of new items with plans down the road for entry into skin care.

The new facial products will be available in March priced at $3.99 for the Ultimate Sheer Tinted Moisturizer and $2.99 for the Ultimate Cover Smooth Foundation. Other products are getting a makeover. There is a new waterproof mascara priced at $2.99, as well as an eyelash curler and a retractable eye pencil, priced at only $1.99 each. In nails, Wet ‘n’ Wild is extending its offer to include a French Manicure Set and MegaLash Strengthening Nail Polish. “These products are as good as any higher-priced versions on the market and American women know that. They want value,” said Jim Koeppl, who also was just named executive vice president and general manager. Koeppl now reports directly to Markwins’ chairman and chief executive officer, Eric Chen. The restructuring is more proof that the division is on a growth course for Markwins.

As part of the acquisition, Markwins also gained the Tropez brand. In order to differentiate it from Wet ‘n’ Wild, the company has retrofitted the line to appeal to multicultural and young shoppers. A cornerstone of the new look is the introduction of Temptations by Tropez, a collection of gloss-filled flowerpots.

Black Radiance was also part of AM’s portfolio, and under Markwins’ tutelage, it also has been improved. There is more upscale fixturing and new packaging.

Overall, retailers report Wet ‘n’ Wild is still one of the fastest-growing brands. Several chains report it has experienced double-digit gains — and that’s against a flat market. CVS is finalizing a test pitting Wet ‘n’ Wild against NYC; currently, some stores carry one and some the other.While there have been changes at the Markwins Beauty Products division, Markwins International is also no longer just a resource for kits. Last year, the company added a collection created by Victoria Jackson. Although it has had a slow start, many retailers think it will be an important niche collection. At the other end of the age spectrum, Markwins introduced a line of Bratz cosmetics that have attracted faithful Bratz consumers.

Markwins International also has had its hiccups. Although the company is the most powerful resource for holiday merchandise, this year, it has been troubled by backups at ports. Some retailers did not get all of their orders for the Christmas selling period.

The company hopes problems at points of delivery will ease in 2005.

There also have been those who believe the kit business has eroded overall beauty sales. “The kits are inexpensive, so dollar sales are low and it takes shoppers out of the market for a long period of time,” said industry expert Mottus. Markwins’ George disagrees. “We don’t see any drop-off in repeat business. Customers don’t always use up all the colors in the kit and they buy more,” he said.

This year will be one to watch Markwins, buyers said, as the company launches sophisticated and sometimes higher prices under the Wet ‘n’ Wild logo, and as it tries to extend beyond kits. But with women seeking the best price for the dollar, most chains said they’ll keep their dollars with Markwins.

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