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After 27 years of owning Revlon — sometimes triumphant, sometimes tulumtuous — Ronald O. Perelman is at peace.
This story first appeared in the May 11, 2012 issue of WWD. Subscribe Today.
Seven chief executive officers have come and gone in that period — five since 1999 — but Perelman, the 69-year-old chairman and ceo of MacAndrews & Forbes Holdings Inc. and chairman of Revlon, says he has hit the winning combination with the current management lineup: vice chairman David Kennedy, chief executive officer Alan Ennis and senior vice president and global chief marketing officer Julia Goldin. The company, which chalked up a 4.5 percent sales increase to $1.38 billion in 2011, may not have returned to its glory years, but it’s clearly headed in the direction that Perel- man wants. His goal is to restore the lustre to the storied Revlon name to the point where its products are not only ubiquitous but envied status symbols.
While the brand isn’t yet at the level of J. Crew, a benchmark for Perelman, Victoria Gustafson, principal of strategic insights at Symphony/IRI Group, notes that Revlon “turned itself around” in 2011, especially in the lip category. But this year, the growth rate has slowed sharply as sales of the Almay brand have tumbled. And though the company is focused on top-line growth, Revlon remains saddled with a billion dollar debt load, but a refinancing last year has given the company more breathing room.
Still, the strongest evidence of Perelman’s new sense of confidence about the company’s management lineup and direction is conveyed by the fact that the notoriously quotation-adverse executive talked on the record for an hour in a recent interview in his baronial Upper East Side townhouse with Andy Warhol and Cy Twombly paintings hanging on the walls. The interview ranged over an assortment of topics, touching on what he has learned from his nearly three decades in the beauty business, and bouncing from his vision for Revlon to his management style to his view of deal-making to his attitude about glamour and his reputation in the media.
Not only does he rarely give interviews, but Perelman claims he doesn’t even read the stories written about him. But in this case, he answered questions fully and thoughtfully with a sense of ease. “He is more comfortable in his skin,” says a former insider of Perelman’s. “He feels hopeful and comfortable. His behavior is a reflection of where the brand is,” the ex-Revloner notes, adding that his old demeanor was more anxious and passive-aggressive when the company was hemorrhaging money. That mood seems to have been replaced by a new sense of confidence, even optimism.
Perelman’s involvement with Revlon’s management seems emotionally intense in terms of touching the heart of the brand, yet detached from the nitty-gritty of the operation.
“He wasn’t involved in the day-to-day, but he was passionate about moving things forward,” says another former staffer. “It was part of what helped us cut through.” His appetite for new ideas and innovation was so voracious that “it was a challenge to stay out ahead of him. He understood what propelled the business.
“He was very fact-based,” continues the person. “If you gave the right facts, you would be in and out of a discussion very quickly.”
As for his personal life, Perelman’s five marriages and estimated net worth of $12 billion has been a magnet for the sensation-obsessed tabloid industry. But the mogul depicted in print is not him, Perelman insists, asserting that he is not a glamour hound roving around town from one hot spot to another. What really matters to him can be seen on the windowsill of his office, where he has a multitude of family photos depicting his eight children and nine grandchildren.
His most public role involves philanthropy, ranging from more than a half-dozen medical and health organizations to the Revlon Concert for the Rain Forest Fund. In tune with his deeply held religious beliefs, Perelman believes in giving back for his good fortune. That creed sometimes coincides with another passion that was sparked at age 13, when he first picked up drumsticks. A recent Rain Forest Concert at Carnegie Hall featured performances by Sting, Elton John and James Taylor. When the band was announced near the end of the set, the spotlight fell on beauty’s biggest mogul sitting behind the drum kit, dressed in his rock ’n’ roll outfit.
WWD: How do you define yourself as a businessman?
R.P.: I think cautious, I think motivating, I think diverse, I think accessible and encompassing. And I think that the latter two are probably the most important, because it allows the leaders of our businesses to be a more diverse group than might be found in other enterprises and they can have access to questions, issues and problem-solving quicker and easier than in most companies.
Because it’s a flat organization?
Because it’s flat and because everybody knows that they’re one phone call away from an answer. We don’t take long to answer questions. There’s no committees. If we like something, then we go right after it. If we don’t like it, we give the second-best answer in the world, which is a quick no.
What drives you?
I love what I do. I love every aspect of it. Fortunately, we are in diverse enough business enterprises that it gives me access to lots of different groups of people. So I just find it fascinating every day. And the aggravation that’s associated with what I do, I sort of enjoy.
Problems. We actually like companies with knotty problems because we are equipped to deal with them. And we can often times buy things because of that, that other people are afraid of.
Do you have a rule of thumb in making deals?
We’ve got a rule of thumb with the kind of companies that we look at. Those are basically low tech, although the low tech keeps getting higher as we move along, so we’re getting a little more comfortable with tech companies just by necessity of the world today. We look for high generation cash flow companies and we look for companies that are not unique to an owner/manager like fashion or retail. I will not go into retail or real estate because I don’t understand it.
You’re known as a consummate deal-maker. Do you view deal-making and running a company differently?
Which do you prefer?
I like them both. In order to make a deal, you have to be dynamic in a vision where that deal is going to be tomorrow and a year from tomorrow and three years from tomorrow. To do that, you’ve got to have some managerial context with which to put that in, in order to say yes, this is achievable, no, this is not achievable. If it’s not achievable, your goal or your dream for the company, then you don’t do it.
I started out on factory floors working for my dad. My first job when I was in graduate school was running the night shift of a galvanizing factory. So I know what that’s about. I know what excess inventory is. I know what too much labor cost is. I like both parts of it.
But we’re pretty decentralized here. We’ve got maybe 100,000 people around the world and 35 of them are in New York. Everybody has their responsibility and their authority. And most of what we see are issues [that arise] when either they get off track or some kind of problems develop.
I take it you don’t have a lot of patience with people who say you’re a great deal-maker but you’re not a manager?
I don’t know how anybody would be equipped to say that except the guy who I maybe laid off and didn’t like it. Because most of our stuff is private. But that’s for others to judge, not for me to judge.
I think they’re just reacting to your image as a super deal-maker.
But we are not deal-makers in the sense of private equity guys who buy something and then buy it to sell it. We buy it to own it for a long time. So you have to have some kind of managerial expertise and interest in the process in order to do my job.
How would you describe your management style?
I think I am very open. I like everybody to make decisions. I am very impatient. Decisions, when they are not made, are made by somebody else so you may as well make them. I am very tolerant of decisions that are made poorly, as long as the next one is made properly.
It’s more important that somebody makes a decision.
Than not make it. Because then you’re out of control. If you make it, you’re in control. And if it’s wrong and you learn about it early enough, you can fix it. That’s why speed of learning about a problem is so important to us. If you’ve made a decision and it’s wrong and you don’t tell anybody about it, it’s unfixable. I believe people should make decisions, they should react to whether the decision is right or wrong quickly. And if it’s wrong, let us know about it so we can help have them put it to the fix.
Are you impatient with somebody who’s indecisive?
I’m impatient with everything.
I’ve heard that you can be volatile.
Volatile is too strong a word. I can let my feelings be known when I am unhappy. But I think volatile is too strong a word for my reaction to things.
Of all the businesses that you’ve been involved in, Revlon stands out. What was it that drew you to this industry in general and Revlon in particular?
I always thought, before we owned it, of Revlon as an undermanaged business and one that the management of the parent holding company thought of as the sad sister that they didn’t care about. They were focused on the eye business and on the chemical business. Beauty was a stepchild and I thought that it could be better managed and turned into a real business. I had a hard time doing that. We went through a series of ceo’s and some I probably should not have put in at all. Some of them I probably lasted with longer than I should have. But it is very easy at Revlon to get affected by the businesses that Revlon touches. That is, it’s part a consumer-marketing company but it’s part a fashion business and it’s part an entertainmentbusiness and it’s part a fun business, it’s part a lifestyle business. A lot of ceo’s that are in this industry very quickly get sort of intoxicated by the access that you get. “Hey, I’m having dinner tonight with Mario Testino and Linda Evangelista and Roberto Cavalli,” you know? And the business is basically a nuts-and-bolts business.
It was only until I put David Kennedy in as ceo that he brought real order and discipline and focus and allowed us to proceed with what we’re good at in manufacturing and developing product. And then we brought in a very good marketing person, Julia Goldin, who’s fabulous, and Alan Ennis is doing a very, very good job.
It’s interesting you said nuts and bolts because its been said that you really love the glamour. It seems almost like a dichotomy.
The glamour I don’t love. My private and personal life has always been depicted as much more exciting and interesting than in reality it is. I don’t go to events. I get criticized a lot for not going to big events. Probably the only black tie I go to in a year is Anna Wintour’s Costume Institute Ball and I go to that because A, I think she does such a fabulous job at the spectacle, a brilliant job at running it, and B, I’m just so crazy about her. I would go any place she invited me. You won’t see me at clubs, and you never did. But the press would have me like I’m gallivanting all around town till all hours of the night and I never did that.
Well, you own Revlon and you’re fabulously rich so…
It’s very interesting. No matter what anybody knows about me, what other companies we have, what other activities we have, what else I do, I am only attached to Revlon. That’s my description, chairman of the board of Revlon, no matter what they’re talking about. They could be talking about a hospital affiliation or a university or a library or a museum, it’s Ronald Perelman, chairman of Revlon. I’m glad I finally got somebody in to fix Revlon so now I can be very proud of it and be proud to be associated with it.
The argument is that you keep Revlon because Revlon is not like owning a sawmill. It gives you access to this whole glittering world.
Anybody who thinks that doesn’t know me and probably has never met me.
How does Revlon fit in with all your other holdings? You own a very interesting tapestry of businesses.
For the most part, they’re businesses that are things that make people feel better and help people. That would go from the pharmaceutical businesses to our Deluxe businesses to our financial services business to our educational businesses. We’re mostly in businesses that help people and make them feel better about themselves and I like those. I will not be in a business that I don’t feel good about.
Do you have a vision of what you’d like Revlon to stand for?
I always had a vision for Revlon. Unfortunately, we were never able to achieve it. And we’re probably going to have to do it through acquisition rather than internal growth now because of the way the industry is fixed in where we sit. But I always wanted Revlon to be like Levi’s or like the Gap or like J. Crew is today. Mickey [Drexler] has done a fabulous job with J. Crew. I am wearing a J. Crew sweater, a J. Crew shirt, J. Crew jeans and a Cucinelli jacket. You can wear his stuff any place, any time, anywhere. He has built something that has great style, great fit and is inexpensive. So you don’t feel bad when you got a spot on the sweater, somebody spills paint on your pants or whatever. I always wanted Revlon to be that. We’ve never been able to achieve that, where a woman would pull out of her Hermès pocketbook a Revlon lipstick instead of a Chanel lipstick, which has always been my dream. Now Fabien Baron is redoing our packaging and it’s much, much better and you’re going to see it [become] much, much better. I would like to be at Anna Wintour’s dinner and see her pull out a Revlon product from her Hermès bag and then I’ll know we’re in the right direction.
How would you deal with acquisition?
We’ve been slow in it because we’ve been getting our house in order up until now. But our house is in good order now, so now we are ready to grow through acquisition, which is what Lauder did, which is what L’Oréal did, which is what Coty did, which is what Proctor & Gamble did. We’re just a little bit late coming to the party. But as our advertising [becomes] more upscale and more reflective of how a woman wants to see herself, she can still feel proud pulling a Revlon lipstick out of her case.
So you’re talking about acquiring an upscale brand of some sort?
No. I’d like to see Revlon become so acceptable in its style and its imagery that a woman is just as proud, like I am just as proud to wear a J. Crew sweater. I think we can do that, but I think we’re late coming to do that.
When you started, you had all these brands.
We didn’t have the right people and we didn’t have the right structure. We didn’t have the right product within the brand. There are two aspects to it. Julia will get Revlon to be the kind of product that I want it to be, that a woman will be proud to [wear]. And then, as a different activity, we are now ready to make acquisitions. We are going down both paths at the same time.
What do you define as the heyday of Revlon and how do you want to get back to that?
I don’t think you could ever get back to the past heyday of Revlon because you had an artist and a designer in Charles Revson as well as a businessman and a visionary that was, like Estée Lauder, the representation of that brand. I am not that. And, by the way, [I] don’t want to be that and don’t have the capability or capacity to be that. Revson knew the business but, more importantly, his lifestyle represented the brand — his boat represented the brand, his dinner parties represented the brand. He was able to bring imagery to the brand that can’t be done today because that person isn’t around. We have to do it with the design of our packaging, the design of our products, the quality of our products, the efficacy of our products.
We’ve had some of the worst-designed packages in history. But so has everybody else…You go through some cosmetics sections and the tool section is more exciting than the cosmetics section. But now retailers are beginning to realize that you’ve got to bring a little excitement to that section and you’ll do much better.
Are you looking for more product innovation?
How about getting back into the fragrance business?
That would probably have to be through an acquisition.
And skin care?
Yeah, yeah. That would have to be through an acquisition.
And getting the number-one spot back in nail enamel?
You don’t like going to events but you do go to your own. How did you get involved with the Rain Forest Fund?
We’ve been doing it for about 20 years. I liked what Trudie Styler was doing and how she was trying to effect a positive result on the environment and doing so in a very beautiful way with artists and patrons. She was passionate about it and I thought that she would be able to make a difference because of her and Sting’s voice, not singing voice but their position.
She made a powerful speech.
Powerful speech. When you have celebrities who are willing to donate their money and their time and their talent and their celebrity to a cause, you can have real impact and that’s the case with them.
You started the Fire and Ice Ball and put the company on the map with breast cancer with the Revlon Run. Does this tie in with your most personal beliefs?
Yes. Giving back is something that I learned from my dad. From Revlon’s point of view, I’ve always thought that the unit of the society that we should give back to are the women because they are our customers. We single-handedly, or I should say I single-handedly, funded the development of Herceptin, which cures about 35 to 40 percent of women with breast cancer. We are now working with a project that has a high likelihood of being able to do the same with ovarian cancer. Probably my two proudest moments were when I heard that Herceptin was so successful. The other was related to a drug we have that cures smallpox. The largest bioterrorist fear is the risk of smallpox. And when the boys go overseas they still get the old smallpox vaccine, which is the live virus.
I was in Harbor Island and at 10 p.m. on a Saturday night I got a call from the doctor who runs that company saying that he just got a call from the Center for Disease Control, that there was a two-year-old boy at the University of Chicago Hospital who was about to die because his father had gotten a small-pox shot, had an open lesion, was playing with the boy and the boy had an open lesion and the boy got smallpox. Would we be willing to send by private plane so that it got there quickly, our drug for the boy? I said absolutely. Three days later, the boy left the hospital.
If it didn’t work, that would’ve been the end of the company because there are very few chances to try the drug on somebody who’s got smallpox. The normal spread of it has been controlled. I felt very good that I was able to help that little boy.
We’re in a period of corporate citizenship right now. Even though you don’t thrive on glamour, do you think that the industry has retained the glamour it used to have, or has it changed, has it gone?
I don’t think it’s retained the glamour that it’s had. It’s still a glamorous industry and still a sexy industry, but other industries have caught up and overtaken us. The fashion industry used to be dull as could be, now it’s the most exciting industry in the world. It’s got the big shows, the big models, big actors and actresses being their spokespeople.
The luxury goods industry has overtaken us. In some regards, the luxury beverage companies and car companies have overtaken us. We sort of owned that market for a while. A car ad used to be a family driving down the road and I love my Chevy. Now the car ads are Jay Z driving the car with fabulous music in the background and going to the party. They’ve gotten smarter than we’ve been. They picked up our marketing special sauce and applied it to their own products. They’ve done a very good job.
What do you think this industry needs to do? Historically, you’ve always taken a very close interest in the advertising.
The packaging, product and advertising. I did that out of my own personal feelings about the ads, because if I was going to be so tied to Revlon, I wanted to be proud of what people saw us representing ourselves as. When we were doing some of our ads and they were just schlock, I felt lousy about it. When our products look like industrial tools instead of beautiful accessories, I didn’t feel good about the company or myself. Now we’re on the right track. Surprisingly, David Kennedy, who is a very straight Irishman, has spectacular taste and a spectacular eye. He can look at, with Julia and myself and Alan, an ad or a shot and we all agree.
There’s always a debate over models versus celebrities. You’ve got both. Have models held their edge against celebrities?
When you get the right celebrity you get an added value of their brand. But they’ve gotta believe in it and in the product that they’re being associated with. I won’t use someone who is not proud to be associated with us. Halle Berry is part of the core of our company. She’s got great loyalty toward us and great affection for the brand and for the product and for the work we do in helping women. Her big issue is domestic violence. She wanted to raise money for a new center for abused women and we agreed to fund it. My wife, Anna Chapman, who is a psychiatrist, said, “It’s one thing to house these women, but if we’re not going to treat them psychiatrically, they’re gonna get back in the rut that they were in before.” So she has put together a pilot program with the city of New York in their domestic violence facilities, where the Columbia University Department of Psychiatry is going to provide psychiatrists for these facilities that we are going to pay for.
What do you look for in a spokesperson?
She’s got to be real, she’s gotta be smart, she’s gotta be interesting, presumably good looking — although there is a wide range of what’s good looking — and be proud to be associated with us.
What do you look for in a ceo?
Somebody who is very smart, somebody who is focused on the business aspects but has good taste, good style and a good sense of the marketplace. David Kennedy brought that to the company. Alan Ennis and his team have that now. I think I was looking for a sexier executive than I need. I need a solid executive with good taste who is really, really grounded and really focuses. That’s what we look for in all of our companies and I got sort of carried away at times with what I wanted for Revlon.
How do you measure success with the company?
Because it’s a business, success has to start with the financial results. But at the same time, you want those financial results to have been driven by a high-quality product that people love to have, are proud to have and feel good about buying and owning. And a company that gives back to its consumers and its constituents. We are on the road to establishing all of that.
Is it within reach?
Absolutely. Not only is it within reach, we are going to be there.
How long do you think it’ll take? Are we talking years, decades?
Not decades. Decades are like centuries to me. Years are like decades to me.
What has made you the happiest owning this company?
When women come up to me, and it happens quite often, where they thank me for helping them rid themselves of cancer at the same time as enjoying our product. They say to me, “We love your product, we love your ads, we love what you’re doing and you saved my life.” That just blows me away.
Have you ever toyed around with the idea of taking Revlon private again?
At different times you think about different things. We’re not thinking about that now. I like the position we’re in.
What would it take to make you sell the company? Is there a number involved?
I don’t think so. I’ve got a bunch of girls who have interest in the company. I love the company, but I love all of our companies. If I don’t love ’em, we don’t do well in them because there’s something about it that I’m not happy with or that’s gnawing at me or something that is structurally wrong and those we don’t deal with. But if I love the company, it’s like my little pet, you know?
What do you do to relax and have fun?
I love, love, love to play drums. It gives me probably the greatest amount of fun that I have. But I have fun everyday, I have fun in everything that I do. I love what I do.
Is it a physical release kind of thing?
No, it’s just the energy of it, the energy of working together, the sound, the excitement that comes out of working together. I don’t play classical drums and I don’t play jazz. I just play rock. I started playing when I was 13 and then I sort of stopped. And then we hired for a corporate gig, Paul Anka, who was an old-time friend, and he said to me, “Why don’t you sit in?” I sat in for the whole gig and just loved it. He would call me whenever he was playing in the area. He was playing at Grossinger’s one Memorial Day weekend, so I flew up and played.
Then everybody who played for us for a corporate event had to agree that I could play with them. Everybody agreed except for Huey Lewis, who said absolutely not, and Patti LaBelle, who said, “He can play for three songs.” I said, “Okay, I want to play for the first three songs,” because I knew she wouldn’t stop me. I played the first three songs and she looked back at me and I [knew] I was in. I played with Al Green. He was fabulous. Before we went on, I knocked on his dressing room door and introduced myself and I said, “I hope I don’t f–k you up too much.” He said, “Man, it’s rock ’n’ roll, it’s just rock ’n’ roll.”
Then I played with Rod Stewart. He did this charity event in Southampton in front of about 5,000 people. Two weeks later he was playing Madison Square Garden, so he said, “Let’s do it again.”
I said, “You must be f–kin’ kidding! I’m not gonna play Madison Square Garden.”
He said, “Come on!” So I said okay. And I just loved it.
What else do you do for enjoyment?
I’m very religious. That holds me in place. And my kids give me the most joy and satisfaction and happiness. I’ve got a 46-year-old down to a one-year-old and an infant in the womb. That’s my life. I’ve got a very full life, not terribly glamorous, although everybody thinks so.