NEW YORK — Retailers say Clarion’s call was never clear.
Launched in 1986 by Noxell Corp. as the mass market’s answer to Clinique, Clarion was not able to expand its wholesale volume beyond $35 million, even with the muscle of Procter & Gamble, which acquired it in 1989.
Last week P&G decided to pull the plug and phase the line out by June 1995.
“Clarion never really had a strong focus, except when it was launched as a hypo-allergenic line,” said Pat Gardocki, director of merchandising at F&M Distributors, Warren, Mich.
Most recently, P&G tried to establish Clarion as a brand for women over 30.
Many chains had given P&G an ultimatum: Make Clarion perform or it gets dropped from their assortment.
“We had an agreement set last June that they would make it profitable by December or it was out,” said the buyer for a large discount chain.
Others, such as Fay’s Drug Stores, based in Liverpool, N.Y., had already edited Clarion from its merchandise selection.
Although P&G’s announcement didn’t catch buyers off guard, the terms of the phaseout program were a pleasant surprise.
The buyers said P&G has put together a lucrative, comprehensive program that includes markdown money, return agreements and a discount program to help retailers wean out the Clarion inventory.
Based on how aggressive the plan is, buyers believe P&G has a huge inventory of product it must move.
“I was very surprised at how lucrative it can be,” noted Gardocki.
Many other phaseout programs in the beauty industry have not been as well executed, buyers said. The plans have resulted in empty pegs on the wall or a patchwork of products that detract from the overall appearance of the department, as well as deep discounts that erode gross margins.
A P&G spokeswoman would not comment on the specifics of the program other than to confirm that a plan is in place.
The only catch: Retailers must retain their space commitment to P&G brands until 1995 in order to get the full benefit of the phaseout program.
“It is all or nothing,” said one buyer.
Space in the nation’s mass market stores is at a premium. Not all retailers are sure they want to fill precious shelves with P&G’s brands.
F&M had already decided to chop Clarion from four feet to two feet, and planned to extend P&G’s sister product, Max Factor.
Others view it as an opportunity to uncover space for Maybelline’s expansion of the Revitalizing line, which is aimed at the 35-plus consumer.
“We have had an excellent response to Revitalizing,” said Robert Hiatt, Maybelline’s president and chief executive officer. “We have asked retailers to give us a space commitment, especially by finding room from least-productive lines.”
Hiatt said the growing popularity of Revitalizing and its need for more space on cosmetics peg walls helped P&G “face reality” and reach the decision to phase out Clarion.
“You can’t continue to flog a losing cause,” said Hiatt.
“I’m looking into expanding Maybelline and giving space to Almay,” said Gina Russo, buyer for The Rx Place, based in New York. “Almay has been doing really well for us and this is a good time to expand it.”
Russo has had service problems with P&G and is wary of expanding Cover Girl and Max Factor. Another buyer was adamant in saying, “Why would I give them more space when already they have holes on the wall?”
Buyers and competitors also wonder whether P&G has a new line up its sleeve — an Oil of Olay cosmetics launch, perhaps. Although rumors are rife that P&G has a line ready to go into test marketing, no retailers would admit to having been presented with a plan.
Unfortunately, many retailers also think the push to clear out Clarion might hurt in the long run. Gardocki at F&M plans to slash prices on many Clarion items to $2 and under — about half the suggested retail. She thinks it will push sales and possibly encourage new users.
“Quality was never the issue for Clarion, and people may now come to like it and will be disappointed when they can’t find it one year from now,” she said. “I’m also concerned to see when new lines can’t make it and what that means for the business.”
The Health & Beauty Care Division of the Anti-Defamation League held a testimonial honoring James I. Harrison Jr. and James I. Harrison 3rd on Jan. 20 at the Grand Hyatt Hotel in New York.
The elder Harrison is ceo of Harco Drug, Tuscaloosa, Ala., the second-largest privately owned drug chain in the industry. His son is president of sales. The team was honored for its contributions to the chain drug industry as well as their struggle against bigotry, according to Stewart Turley, chairman and president of the Jack Eckerd Corp. and master of ceremonies. More than $300,000 was raised to continue the programs of the Anti-Defamation League.
Beauty executives in attendance said 1994 would shape up as a turning point for the business.
“It is going to be a more gentle year,” predicted Jack Hall, Revlon’s executive vice president of sales, referring to last year’s rough and tumble business climate.