On a recent, sweltering hot Wednesday morning, Alan Ennis leans over his computer to check how far the Dow Jones Industrial has dropped before plunking into his chair to speak about his efforts to return Revlon Inc. to its former glory. Sitting still does not suit Ennis—“I’m never truly at rest. I never stop moving even when I’m not in the office,” he admits—which may explain the success he’s had at Revlon’s helm. Following two years of sales declines, Revlon’s revenue grew more than 2 percent in 2010, and has rebounded further this year. Ennis may be a “finance guy” by training—he previously served as Revlon’s chief financial officer—but he’s bent on mastering the product side, too. During product review meetings, he eagerly tests out formulas, going so far as to apply a coat of quick-dry nail polish to prove it dries in 60 seconds. The president and chief executive officer oversees a $1.3 billion business with a global portfolio that includes Revlon, Almay, Mitchum, Gatineau and Ultima II. Net sales were up 9 percent in the first quarter. What do you attribute the increase to? Revlon has always been a powerhouse brand in the marketplace. It’s an iconic brand that stands for modern glamour. It’s always been a major player, not just in the U.S. but in many countries. I recognize a trend needs to be established over a period of time, so I don’t look at one quarter necessarily as being a turning point or defining a new direction. It comes down to three things: having the right product, communication and in-store execution. You’ve got to identify the consumer need and build a product portfolio that supports that. The product innovation piece is critical, and then you ask, how am I going to communicate so that it connects with [the consumer] . . . Julia Goldin, our chief marketing officer, talks about connection planning, and that’s a lot different than advertising. It means using the right ambassadors, photographers, copy and end-benefit communication. Then you test it extensively. The reason we’ve been successful over the last couple years, including the first quarter, is we have started to click on all of those cylinders. When you’ve got great brands and great people and a passion to win, it’s a killer combination.
What’s the growth plan for the year ahead and how are you going to achieve it? The objective is to drive profitable growth. That’s a change in direction from where we were five years ago, when the company was in a different financial situation. We’ve become a much more stable organization fi nancially and we’ve significantly improved our capital structure. We went from a place where five years ago we had negative cash flow of $162 million, to 2010 being our third consecutive year of positive cash flow. We have focused on putting resources behind what we believe the growth initiatives to be. It’s organic growth and growth potential through acquisition. My expectation is that we will continue to focus on driving growth while we maintain our margin structure, which is extremely competitive. How important is international in your strategy? What countries in particular are you focused on and why? I have a map of the world in my office. Being an Irish national, I recognize that Manhattan is not the center of the universe and the U.S. is not the center of the globe. Almost 50 percent of our revenues are generated outside the U.S. We have a formidable presence in a number of markets, including Canada, the U.K., South Africa, Australia and Mexico. We want to capitalize on our strengths in those markets, and find ways to exploit other markets where we are not in as strong a position. Revlon is sold in over 100 countries. We just launched the Revlon Colorsilk brand in Australia, where we’ve got a significant presence in the marketplace. It’s a tremendous success. We’re selling faster than we can get it in there. That’s an example of using our existing portfolio of brands and exploring new channels, new geographies and new segments.
How do you see the industry evolving in the next two to five years? If you look at the evolution of women over the last 20 or 30 years, today women are the engine of the economy and global growth. They own 25 percent of the wealth of the world, and are 50 percent of the workforce of the U.S. Women will continue to become more powerful and wealthier in the next five years and beyond. That’s going to result in greater consumption of health and beauty products. That’s a real opportunity. The acquisition of Mirage Cosmetics got the industry’s attention. What is Revlon’s criteria for making acquisitions? Are there more to come? Our goal is to profi tably grow. As a subset of that, there is organic growth and there’s growth through acquisition. Mirage and the Sinful brand—which is a fashion-driven, trendy nail color brand sold primarily in the U.S.—filled white space in our portfolio because it plays at a price point that’s different from Revlon’s. It was the first acquisition in quite some time. The message is twofold: We’re serious about profitable growth and we’re in a much stronger position fi nancially, so we’re able to use our free cash flow and our leverage to acquire companies and brands.
In the last year, Revlon has turned up the heat with more advertising. Can you explain how Revlon sharpened its current marketing and advertising strategy? Advertising is about how do I connect with the consumer. It’s important that it’s not a broad, multimillion-dollar blast campaign. For example, in June we launched Revlon Grow Luscious Plumping Mascara. We did something that challenged the norm in advertising. We ran a black-and-white TV commercial featuring Jessica Biel and Pharrell Williams. [The spot] shows Jessica putting on the mascara with Pharrell walking toward her. As she bats her lashes, he stumbles. Pharrell did the music. We’re running it in cinemas and on YouTube. It’s breaking the mold. It’s got attitude. We also took over Times Square with Jumbotrons playing the ad, and got over 72 million impressions in the first couple of days.
How is Revlon working to lessen its debt load? In the last three to four years, we have done the following: We have reduced our debt by $300 million. We have, as a consequence of that, improved our leverage; we have been upgraded by both Moody’s and S&P multiple times, and we have refinanced some of our existing debt, extending maturities and reducing interest rates. Today, Revlon is a totally different company than it was then.
How would you describe your management style? My general demeanor is calm. I tend not to get overly animated about a particular issue. I’m focused on winning and I expect the organization to want to win. You get alignment around the objectives, you set the direction, you allocate the resources and then you reach those objectives. It’s about disciplined decision making. I don’t jump to conclusions, I don’t make rash decisions. I get input from people and make a balanced, rational decision in an orderly manner. I communicate in a way that’s easy to understand. My Irish heritage lends to a somewhat humorous style. Regularly in meetings, I’ll crack a joke here and there to lighten the mood and make sure everyone is having a good time. If you’re not having fun, it’s a waste of time. I also make sure we celebrate success. It will not be surprising that for the last couple of years we’ve had our holiday party at an Irish pub. I’ve been out of Ireland for 13 years and I maintain a quest for the perfect pint of Guinness. I’ve yet to find it, but I’m not going to give up.
How have you seen your management style evolve? I’ve had a very clear focus that you need to get an organization aligned around a set of objectives. Trying to do something in isolation or without the support of the team is futile. I become the oil in the cogs of the business machine: How do I make it run more smoothly, how do I make it run more quickly and more efficiently? When you are the ceo and a decision comes to you and you say ‘yes,’ it gets implemented. If you say ‘no,’ it doesn’t. It puts a great sense of responsibility on the importance of those big decisions. That’s why I do take time to make sure the decisions that I make are fact-based, that they are reached in an orderly manner, in a disciplined way with the right people. What’s the toughest business decision you’ve had to make? Would you make it the same way today? I became ceo at the end of April 2009, and four weeks later we announced an organizational restructuring that reduced our workforce by 10 percent. Despite having complete confidence that it was absolutely the right thing to do—and I would do it again if faced with the same situation—as a new leader in the organization, I was concerned about my credibility and about organizational support. So I focused on the communication, on why it was a necessary next step. Ultimately the results speak for themselves. We are at a 15 percent [operating income] margin, which is incredible. Laying off people is a painful decision. I find it particularly emotional, but it doesn’t get in the way of making the right decision. What do you do to relax? I find activity relaxing. Although I’m not fast, I’m an enthusiastic runner. I’ve run four marathons, including New York City three times. I ran one with my wife a few years ago. There’s a great photograph of the two of us crossing the finishing line holding hands. We go to the beach quite a bit with our kids. Home to me is always Ireland, so I visit quite often... Of course three kids on a transatlantic flight is a nightmare—not so much for me but for anyone around me. If they’re misbehaving or just being kids, I make a point of buying the people around me a drink. Before you know it, they’re holding the baby. It’s the best 50 bucks you’ll ever spend.
In Brief Alan Ennis, a native of Dublin, Ireland, received his undergraduate degree from University College Dublin and his MBA from New York University’s Leonard N. Stern School of Business. He began his career in his hometown with Arthur Andersen in 1991, and later held several senior positions with Ingersoll-Rand Co. After falling for an American girl—Michelle, whom he would later marry—Ennis relocated to the U.S. in the late Nineties. He began working at Revlon in 2005 as senior vice president, internal audit, and in 2006 was promoted to executive vice president and chief fi nancial o" cer. In 2008, he became president of Revlon International and was named ceo the following year. He currently lives in Scotch Plains, N.J., with his wife and three children.
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