Revlon Inc. is fit and ready to return to its leadership beauty position, declared company president and chief executive officer Alan Ennis.
This story first appeared in the June 1, 2012 issue of WWD. Subscribe Today.
But don’t expect Revlon to rely solely on existing marketing tools or return to the fragrance category in a big way. Instead, Ennis has a laserlike focus on Revlon’s current strengths.
“I think over the years, Revlon got lost in this space where it lost focus on the goal,” said Ennis, adding that through 2007, there were about 15 years of negative cash flow at the company. “They were trying to drive the brand, trying to drive brand equity, trying to spend behind the brand, but at the same time they weren’t minding the shop. And so the classic example is while expanding the empire in Rome, the administration was collapsing.”
A turnaround started around 2008, he said, with a disciplined approach — which included a 20 percent reduction in head count — and a fact-based strategy for spending. “And Revlon has stuck to its guns. We have kept our costs down. We now have a 25 percent operating income margin. And it may not be a big number for some of the big boys and girls in the room, but over the last four years, we’ve generated $250 million of positive cash flow. So after 15 years of burning cash, we generated positive cash flow.”
Simultaneously, Revlon put muscle into its core brands. Revlon has a three-year rolling portfolio strategy across all segments identifying launches through the first quarter of 2015. With those aspects running smoothly, the next step was people. In 2009, Revlon started rebuilding its staff, including what he called a “formidable” team with Julia Goldin as the chief marketing officer and a group who understands the new corporate culture.
With its company ready to do business, Ennis described an upbeat domestic market as well as opportunities overseas. While China is a complex market, he does see potential there, but also throughout all of Asia. However, he hopes to see more manufacturing return to America, especially as regulations become standard across the industry. “We are all striving to produce high-quality products at affordable prices that are safe for the consumer and that work. The issue with regulation is that it’s disintegrated, that there is no common set of standards around the world. There is no common set of standards in the U.S. There is a real opportunity to harmonize what’s considered to be the acceptable regulations,” he said.
Grabbing the consumer in today’s multichannel world is challenging and Ennis noted that “simply running a TV campaign during daytime TV” doesn’t work as well as it once did. Revlon increased its spending behind digital platforms over the last four years, and digital represents somewhere between 15 and 20 percent of its total media spend.