NEW YORK — Revlon is digging its nails into the hotter-than-ever nail polish market with the acquisition of Mirage Cosmetics, owner of the Sinful Colors brand.
Along with another major deal, the $429 million purchase of Drugstore.com by Walgreen Co. announced Thursday, the purchase signals beauty firms’ neverending desire to get bigger and grab more market share.
The Walgreens move was interpreted by many as the chain’s next step in getting access to more prestigious beauty lines. “I think Drugstore.com fits really well with the higher-end Look Boutiques,” said industry consultant Allan Mottus. Added another industry observer, “It is a foot race between CVS and Walgreens to get a brand like Clinique.”
News of the Revlon deal began percolating at Bologna’s recent Cosmoprof beauty trade fair, and on March 17 Revlon filed an 8K with the Securities and Exchange Commission confirming the speculation. With distribution in Walgreens, Rite Aid and Target, Sinful has become a best-selling value brand (items cost $2) and has surpassed Revlon’s nail business, according to sources. Revlon, buyers said, was seeking an avenue into value nail and decided to buy its way in with a brand that ended 2010 with an estimated $30 million in revenues. Beltsville, Md.-based Sinful was ranked as the fastest growing makeup brand in Kline & Co.’s Cosmetics & Toiletries USA 2010 report, with sales growing 91 percent for the year. The company is best known for its speed to market with the hottest nail polish shades, maintaining 14 promotions a year.
Alan Ennis, chief executive officer of Revlon Inc., said Sinful will operate as a stand-alone business unit.
“After a strong 2010 for Revlon, we are carrying terrific momentum into 2011, and we have a keen focus on delivering on our strategic goal to profitably grow our business. This acquisition enables us to add Sinful Colors to our portfolio of businesses,” Ennis said.
Terms of the transaction have not been disclosed but further information regarding the deal will be included in Revlon’s first-quarter 2011 Form 10Q, planned for some time in April.
Nail polish has certainly become the crown jewel of beauty brand portfolios. Just in the last year, OPI was acquired by Coty Inc. for an estimated $1 billion and Essie snapped up by L’Oréal for an estimated $100 million.
The rapid rise of Sinful Colors was attributed to more chains giving the brand footage in just the past few years. Mirage’s roots date back to 1991 when president Chris Chon began distributing to professional stores. He soon decided to give a trade show called Exclusively HBA a try. Steve Lubin, Walgreens’ divisional vice president and general manager of marketing for non-mainland operations, known for spotting promising items, saw the on-trend nail color line and introduced Chon to Walgreens’ beauty buyer and a retail venture was launched.
“That show helped kick off our retail business,” recalled Chon in an interview last year with WWD. Reached Thursday in Beltsville, Chon said he had been courted by several companies over the past year as the nail category became hot.
“I got some calls. Let’s leave it at that,” said Chon.
The Revlon news emerges as Walgreens is purchasing the online merchant of beauty, consumables and health care, in a transaction with a total enterprise value of about $409 million, according to Walgreens. The purchase price was about $429 million, just above its valued price. In 2010, Drugstore.com generated more than $456 million in sales, ranking it as the eighth-largest e-tailer in the U.S., according to Internet Retailer magazine. Combined, Walgreens and Drugstore.com will become a $67 billion company in sales. Walgreens will maintain Drugstore.com’s corporate office in Bellevue, Wash., after the transaction is completed. Drugstore.com employs about 1,000 people at its offices, call center and distribution centers.
“Our acquisition of Drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores,” stated Walgreens president and ceo Greg Wasson. He added the deal will give Walgreens access to its three million online customers and add about 60,000 products to its online offering. Drugstore.com’s Beauty.com, SkinStore.com and VisionDirect.com online sites will dovetail with the Walgreens’ strategy of pushing multichannel merchandise initiatives.
Under the terms of the deal, Drugstore.com stockholders will receive $3.80 in cash for each share of stock. The price per share is a premium of about 102 percent over Drugstore.com’s 30-day average closing stock price, and a premium of about 113 percent over the closing price of Drugstore.com’s common stock on March 23, the last trading day prior to today’s announcement.
Walgreens and CVS Caremark Corp. don’t disclose how much business they do online. However, Internet Retailer said Walgreens is the 68th-largest online retailer. The company runs about 7,700 stores around the country.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews