The problem-solution cosmetics firm Physicians Formula Holdings Inc. managed to reverse a year-ago loss as it eyes new markets, retail channels and products to revive its business.
For the second quarter ended June 30, the Azusa, Calif.-based company posted a net profit of $591,000, or 4 cents a diluted share, compared with a loss of $2 million, or 14 cents a share, in the year-earlier quarter. Sales during the three months declined 8 percent to $21.1 million from $22.9 million in the year-ago period.
The company attributed the sales decline to the loss of a major retail customer, as well as a pullback in promotional launches and continued inventory destocking by retailers.
For the first half, the firm reported a net loss of $1.1 million, or 8 cents a diluted share, compared with a net profit of $3 million, or 21 cents, in the year-ago period, on sales that declined 37.1 percent to $41.2 million.
Referring the loss of the retail partner, Ingrid Jackel, chairman and chief executive officer, told WWD, “The door is always open,” adding that the company presented its 2011 product lineup to the account and was encouraged by the potential opportunity of working with this retailer in the future. During the company’s earnings call Thursday evening, Jackel told analysts, “We firmly believe [the retailer’s] decision was not based on sales performance, but rather a change in strategy.”
Physicians Formula would not confirm which retailer it lost, but WWD previously reported Walgreens stopped placing orders with the beauty firm as part of a storewide mix rationalization effort.
Jackel said an aggressive onslaught of promotional activity — for instance, “buy-one-get-one-free” offers — by the brand’s competitors also impeded sales growth. She added that these brands have indicated to retailers that they will rein in promotional spending in the coming year. “That will put everybody on a more even playing field,” said Jackel.
Physicians Formula has a full pipeline of launches planned for 2010, which includes five major product platforms, said Jackel. In a bid to regain sales lost from its former account, the company has turned its sights to the food retail channel, an outlet Jackel said has high foot traffic and lower product returns. Physicians Formula distributes to 2,000 of the 16,000 food retail doors in the U.S. The company also has plans to enter certain European markets next year.
As of June 30, the company’s total net debt was $8.3 million, which was comprised of $11.8 million of debt, net of $3.5 million of cash and cash equivalents. The company negotiated a waiver and amendment with Union Bank to cure its covenant default.
The firm’s chief financial officer, Jeff Berry, said he anticipates the company’s liquidity issues will be resolved by early in the fourth quarter.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)