NEW YORK — The saying, "One man’s trash is another man’s treasure," couldn’t be more aptly applied to hair care company Alleghany Pharmacal Corp. The Great Neck, N.Y.-based company generates more than $50 million in wholesale...
NEW YORK — The saying, "One man’s trash is another man’s treasure," couldn’t be more aptly applied to hair care company Alleghany Pharmacal Corp. The Great Neck, N.Y.-based company generates more than $50 million in wholesale sales a year based on a business plan that sees more value in acquiring and fixing a damaged brand than in building one organically. Of the seven brands it markets, not one got its start in-house. And none have targeted a customer below the age of 30 either.
Its latest picking is Willow Lake, a hair care brand that Alleghany acquired last November from The Lamaur Corp. The brand targets a younger demographic than Alleghany’s other holdings, and also brings its brand portfolio into the 21st century.
Like Willow Lake, Alleghany’s other brands — which are made of both general market and ethnic hair care labels — have been acquired throughout the company’s 14-year beauty history. It was in 1989 when Alleghany owner and president, David Geller, saw an opportunity in the beauty industry with Nutranail, a nail remedy. The brand presented the entrepreneur a challenging business opportunity, so he bought it. Not long after building it into a modest brand, Geller sold its licensing rights, and at the same time got bitten by the beauty bug that led to a buying spree. Over the years he’s snapped up hair care brands from various companies that were looking to unload what they considered extra baggage, such as Lustrasilk from Gillette and Jhirmack from Playtex Co. Others include Hask, a professional beauty brand, and a handful of ethnic brands that comprise 30 percent of company sales, such as Grofine and Vigorol.
While these brands keep Geller’s business churning, they’re far from household names or even mainstream ones. So, to industry onlookers, Willow Lake is Alleghany’s shining star. A shampoo and styling brand that in the late Nineties generated as much as $30 million in wholesale sales per year, Willow Lake had a modest following before it fell off the charts.
According to Alleghany executive president Dave Miller, Willow Lake was originally a "well-positioned brand to women in their 30s but its [ad message] wasn’t impactful. [Lamaur] spent a lot of money on TV and print ads, but its [advertising to sales ratio] was too high on the brand."Willow Lake, when Alleghany acquired it, consisted of 15 shampoos, conditioners and styling stockkeeping units. It is mid-priced at $3.99. In the first quarter of next year when the product re-launches, there will be fewer shampoo and conditioners and more styling products. "We are also tweaking a number of formulas to make ingredients, as well as its fragrance, more current," Miller said. Design and product packaging is still being decided upon, but Miller said that all new bottles and caps will give Willow Lake a new, fresher image. A print advertising budget of $2.5 million will appear in a broad range of women’s magazine’s to support the new Willow Lake, including titles that target a 20-something crowd. "We don’t want to exclude current customers but we want to include an early 20s customer. That’s why we bought the brand," added Miller.
Another brand, Salon Style, which Alleghany acquired from Lamaur on April 30, is looking to grow company sales, too. Salon Style, a 15-year-old brand positioned as one with salon quality product and reasonable prices, hadn’t received much attention from debt-riddled Lamaur in the past two years.
"It needed investment as opposed to correction," Miller said.
In fact, Salon Style was scheduled to release six items this past January, according to Miller, but Lamaur never had the capital to launch the line. Ultimately, Lamaur filed Chapter 11 bankruptcy in June.
Now, Alleghany is launching thenew Salon Style products, which include two styling products, two shampoos and two conditioners. One of the hero products is Cream Gel, which is formed like a cream but functions like a gel. Alleghany will support the launch and the brand with a national TV advertising campaign, a company first.Product begins shipping this month; ads begin airing in the third quarter. Salon Style retails for $3.49.
Alleghany’s future seems poised for growth, as both Geller and Miller said additional acquisitions will satiate the company’s hunger for picking up smaller hair care brands. And there’s a lot of them to be found these days, namely some from Procter & Gamble’s well-filled hair care portfolio, which now includes a number of smaller Clairol brands.
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