Trump Conquers Marshall Field’s CHICAGO — Once again, Donald Trump proved that he doesn’t believe in doing things in a small way — not even department store personal appearances.
Arguably the country’s most quoted businessman, Trump swept into the Windy City this week, presiding over what became the most lucrative personal appearance in the history of Marshall Field’s State Street store.
The previous record of $30,000 — set by Donna Karan in 1999 with a two-day beauty and fashion event — was easily eclipsed by The Donald, who was said to have racked up close to $32,000 in sales of his eponymous new men’s scent during the event. And Trump was not leaving that position to chance — after finishing up on the floor, he signed a number of additional bottles while conducting meetings in Field’s corporate boardroom.
Trump needn’t have worried about making the numbers: The fragrance, noted Dave Steiner, vice president and divisional merchandise manager for cosmetics and fragrances for Field’s, was already ranking number one among the State Street store’s men’s fragrances for the week — even before the event’s totals were added to the tally.
More than 1,000 Chicagoans trudged through cold rain and whipping winds to catch a glimpse of Trump, who appeared with Bill Rancic, the winner from the first season of Trump’s hit NBC series, “The Apprentice.” In fact, Chicago police were out in full force at Field’s, as was the store’s entire security team. And it was clearly needed: The crowd strained at the barriers and chanted his name and in at least one case, a woman had to be forcibly restrained from grabbing Trump as he made his way to the makeshift stage set up for the event.
Another woman had a hankering to hear Trump’s most famous phrase: “Mr. Trump, will you please fire me?” she pleaded. He obliged with a smile.
True to form, Trump was surrounded onstage by a handful of beautiful blondes and brunettes — fragrance models for the scent. They spritzed an eclectic crowd, who ranged in age from infancy to well past the golden years, both men and women. And as Trump left the stage, he was rushed by a group of about 10 Estée Lauder sales consultants begging for a picture with him. He lost no time in complying.Based on his success thus far, Trump said he’s now pumped up to expand the line, which consists of just one stockkeeping unit, a $60, 3.4-oz. fragrance spray. — Julie NaughtonAvon Expansion Looks to Hit $10B by ’07
NEW YORK — Avon Products Inc. will be defined by rapid expansion in developing markets and an overhaul of the company’s North American business as management seeks to make it a $10 billion company by 2007.
The goals were set out by Avon executives to more than 200 people during a “strategic update meeting” Wednesday at the company’s headquarters here. Shareholders and investment professionals heard a management team that exuded confidence in the company’s ability to expand the business over the next decade.
“It’s been quite a walk for the last five years,” said Andrea Jung, chairman and chief executive officer, opening the meeting with an overview of Avon’s progress. Jung said the company reached sales of $7.7 billion in 2004 compared with $5.3 billion in 1999. “It has been a thoughtful transformation, and it’s getting bolder,” she said.
Avon’s facility for quickly establishing itself in developing markets has been key to its success. “No one does developing markets better than Avon,” said Jung, who pointed out that 50 percent of Avon’s business stems from developing markets.
Heading into 2005 and beyond, management has its sights on expansion in China, Russia, Turkey, the Middle East and North Africa, India, Southeast Asian and the Andean Cluster — Colombia, Ecuador, Peru and Venezuela.
Avon is no different from its competitors when it comes to China, putting it at the top of the list in terms of growth.
“China continues to be our most exciting opportunity,” said Robert Toth, president of Avon International.
Avon anticipates about $1 billion of revenue growth from China, Russia and Turkey between 2005 and 2007, Toth said. The company’s 6,000 boutique stores cover 70 percent of cities and towns in China. By 2007, it expects to capture 13 percent of the Chinese market, generating revenues of $600 million compared with revenues of $220 million in 2004, he said.The scenario is similar for Russia, where the company anticipates raising its market share to 18 percent by 2007 from 13 percent in 2004. Revenues in 2007 are expected to be $800 million compared with $410 million this year.
Expansion in Turkey carries with it the hope that the country will function as a gateway into North Africa and the Middle East, including Egypt, Iran, Algeria, Libya and even Iraq and Syria. Expanding in several of these countries will depend on U.S. government regulations.
Looking to 2015, Avon management projects that revenues generated from developing countries will account for 68 percent of the total.
Brian Connolly, president of Avon North America, discussed the company’s plans to return its U.S. market to profitability, which will require exiting lagging businesses and the introduction of new ones.
Connolly pointed to an unexpected drop in consumer confidence during the fourth quarter as an external factor that led to a reduction in spending. He said confidence fell most in households with incomes of $25,000 to $35,000, the range for 50 percent of Avon’s customers, and characterized the second half of the year as an “isolated cyclical downturn.”
Avon had problems in its Beyond Beauty segment. In particular, Connolly said, toy sales fell 38 percent in 2004. “It is time to get out,” he said, describing the company’s lack of a competitive edge, the difficulties of consistently winning in the toy market, lower margins and difficulties with the supply chain.
Avon plans to leave the toy business by the second quarter of this year, and anticipates exiting the seasonal gift business during the fourth quarter.
Jewelry is one area the company expects to help fuel a rebound in the U.S. market. Connolly said jewelry garnered the highest profit margin in the United States. Another key will be the introduction of plus-size intimate apparel.
“She’s not looking to go to Wal-Mart and she’s not looking to go to Victoria’s Secret,” Connolly said of the plus-size market. The company will also look to reenter the foundations business in 2005, said Connolly.— Ross Tucker
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