NEW YORK -- Determined to build its new cosmetics business, Sears, Roebuck & Co. isn't willing to wait for the prestige cosmetics houses to sign on.
Instead, the chain is entering into a joint venture with Pierre Rogers, president of the Lancome division of Cosmair Inc., to produce a full-scale private label cosmetics line. Rogers is resigning his post at Lancome.
Details of the development were outlined Wednesday by Arthur Martinez, chairman and chief executive officer of Sears Merchandising Group, and Robert L. Mettler, president of the Apparel/Home Fashions Group, during a presentation at the New York Palace Hotel here.
Martinez said the Sears cosmetics business as a whole should grow to $400 million to $500 million over a three-to-five-year period.
The private label program is expected to contribute less than half of overall cosmetics sales, but Martinez said after the presentation that home shopping and catalogs could be potential vehicles for the new line.
The line, which has not been named, initially will include makeup, treatment and fragrance. Eventually, Sears plans to add children's products.
The launch is set for October 1995 in more than 200 Sears doors.
Having exited the cosmetics business in the early Eighties, Sears opened 22 new cosmetics departments last November after nine months of planning. Twenty-six stores now have cosmetics departments, and an additional 99 are scheduled to open this year.
"This line will be expanded to most of our stores by 1998," Mettler said. Sears operates about 800 stores.
The departments, which average 3,000 to 3,500 square feet with 250 linear feet of counter space, mainly house mass cosmetics lines such as Revlon and L'Oreal. Sears' attempt to acquire prestige products has been limited to Flori Roberts, a department store brand for black women, and fragrances bought on the gray market.
Sears' push in cosmetics is part of a store-wide effort to become a national department store for Middle American women.
Annette Golden, a veteran of Estee Lauder and Revlon, will oversee product development for the joint venture. Charles Lalanne, formerly vice president of finance and chief financial officer at Yves Saint Laurent, will also be part of Rogers's team.Rogers, Golden and Lalanne are forming a company called BeautyStyle, which will manage a new Sears subsidiary, Beaute Inc. Beaute will manufacture the private label cosmetics and fragrance line.
Rogers said the line initially will include more than 500 stockkeeping units.
Mettler said that within the Sears private label business, there could be several lines, each with its own fragrance, skin care and makeup collections. However, executives also said that the private label group will not preclude adding more national brands.
Industry analysts said the Sears move is probably a smart one, particularly in light of Ultima II's current predicament. Ultima II, which in 1991 began to sell to J.C. Penney, has been dropped by R.H. Macy, May Department Stores Inc. and Federated Department Stores.
"I believe Sears has thoroughly explored all of its options in terms of upgrading its current cosmetics and fragrance operations, including, obviously, approaching many prestige manufacturers with the opportunity of selling their products to Sears," said John Horvitz, a cosmetics industry consultant.
"Judging by what happened to the companies in the past that broadened distribution, prestige manufacturers may shy away from Sears for fear of retaliation."
Allan Mottus, another industry consultant, said Sears does not have a strong enough track record in beauty to lure any desirable prestige brands, but an upscale private label line could help recruit department store brands down the road.
"They would only get the dogs, cats and woof-woofs," Mottus said of Sears' current attempt to acquire national brands. He said Sears probably figured they couldn't take the market's "problem brands" and make them profitable.
But some analysts said private label won't be enough for Sears to make a dent in the competitive cosmetics arena.
"I think they will need some major brand names," said Rick Nelson, a retail analyst with Duff & Phelps, Chicago.
Sears' new partner, Rogers, has been president of Lancome since 1990. Prior to that, he ran Yves Saint Laurent from 1987 to 1990. Rogers is also credited with the establishment of Clarins as a force in the market in the early Eighties.He has also served at Christian Dior, Shiseido, Clinique, Yardley of London and Faberge.
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