NEW YORK — Despite absorbing the negative financial impact of product returns to prepare for its two most ambitious initiatives for 2006, Revlon Inc. narrowed its loss in the third quarter.
During a call with analysts Thursday, Revlon president and chief executive officer Jack Stahl revealed additional details about its 2006 plans, which include the overhaul of Almay and the introduction of Vital Radiance, a new brand that targets women over 50. (See related story.)
The beauty firm reported a net loss of $65.4 million, or 18 cents a diluted share, wider than Wall Street's expectations, from a net loss of $91.6 million, or 25 cents a diluted share, in the year-ago period. Revlon credited the improvement to refinancing activities during the quarter. Sales for the period dipped 6 percent to $275.3 million from $294.4 million a year ago. Results include $32 million in product returns associated with the launch of Almay and Vital Radiance.
The company's investment in new products for 2006 was reflected in North American sales, which fell 17 percent to $159 million from $192 million a year ago. International sales gains partially offset the decline. Shipping strides in Asia Pacific and Latin America, as well as favorable currency translation, fueled net sales 14 percent to $117 million from $102 million a year ago.
"We have confidence that these two brand initiatives will be important building blocks," said Stahl, adding that the company will continue to revamp existing franchises to bolster Revlon's growth. Having already restaged SuperLustrous, its nail care portfolio, and Age Defying, the company will relaunch Revlon's ColorStay franchise this spring, replete with new packaging and an enhanced formula.
The entrance of Almay and Vital Radiance will increased the company's retail footprint by 25 percent in 2006, said Stahl. The company expects the two initiatives to yield $30 million to $40 million in manufacturer sales in 2005 (down from the company's previous estimate of $50 million).
Revlon anticipates the upfront cost of the launches will total $75 million for 2005. That total, of which $44 million impacted the company's results so far, includes $10.2 million for display fixtures, $25 million for staffing and marketing activity and $40 million in product returns and allowances. Revlon expects to spend $85 million to $95 million for permanent displays next year.Bill Chappell, an analyst with SunTrust Robinson Humphrey Capital Markets, said while Revlon did have some challenges this quarter, given the cost of the two initiatives, the increased shelf space likely will offset those costs.
"If retailers are allocating that much shelf space, they must see something they like," said Chappell.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast