NEW YORK — The mass beauty market is shrugging off the first half.

The painful fact that sales across nearly every cosmetics category were down for the first six months for the first time in years is not dampening spirits for the latter half of the year. Manufacturers across the board said they are expecting a brighter fall and winter.

For one, Joseph Campinell, president of L’Oréal Consumer Products Group, speaking industrywide, downplayed the negative numbers promulgated by data firms Information Resources Inc. and ACNielsen, pointing out that neither contain Wal-Mart data. With Wal-Mart, Campinell contends sales were softer than normal, “maybe at worst flat or up a point or two” depending on the category. According to IRI, retail sales of face makeup was down 5.2 percent in the first quarter, while lip color slipped 0.3 percent and eye makeup was flat.

But to strengthen business overall, Campinell said, “We have had several meetings with retailers over the last few weeks and everyone is looking for ways to improve business.” Campinell has detected a shift in attitude among industry executives since the NACDS Annual meeting in April. “It was almost like a resignation that times were tough and now they are talking a more positive game.”

For its part, L’Oréal will stress in-store activities, and the company also will not pull back on its advertising plans. Said Campinell: “We will be as competitive and aggressive as we have to be.”

A key launch for L’Oréal will be the rollout this month of its new antiage skin cream, Wrinkle De-Crease, which Carol Hamilton, president of the L’Oréal Paris division, predicts will become its number one stockkeeping unit.

With all the focus on skin care, there is a sense the category is not reaching its potential. Total category sales were up a modest 2.1 percent for the 52 weeks ended April 22, according to IRI. In a test of a new merchandising approach, one retailer increased store sales 40 percent, according to L’Oréal, a participant in the effort. “It is the growth category of the future and penetration is modest compared to other categories,” commented Campinell.

Procter & Gamble also will continue to invest in its brands.“As for the category, it’s been fairly flat for the first half and it’s always hard to predict the future,” remarked Marc Pritchard, vice president, global cosmetics and personal care, for Procter & Gamble. “But what I can say is that Cover Girl and Max Factor will continue to invest and work with our retailers to drive growth.”

Cover Girl, noted Pritchard, “is in the midst of 12 consecutive quarters of growth.” Both Cover Girl and Max Factor have been boosted by the success of long-wearing lip color items. Max Factor news for this year includes Stretch and Separate mascara, while Cover Girl is emphasizing its Multiplying mascara and a new eye shadow collection. Meanwhile, Cover Girl AquaSmooth foundation has helped shore up the brand’s leading position in the face segment.

Karen Fondu, general manager, Maybelline-Garnier, is optimistic about the second half of 2003.?Maybelline-Garnier’s new initiatives, she said, coupled with the company’s momentum to date, positions it for a strong back half. “The sense we get from our retailers is that early July results are positive. I look forward to a favorable second half,” Fondu said.

Revlon, too, is looking at innovation in its existing brands to help drive sales.

“As we have said, our growth plan includes reenergizing the Revlon and Almay brands through innovation in product development and creative marketing programs,” said Debra Leipman-Yale, executive vice president and chief marketing officer of Revlon. “Clearly, the category has been soft over the past several months, but we believe that the categories in which we compete will begin to see favorable momentum for second half. Notwithstanding this softness, based on ACNielsen data, we have increased our market share for our Revlon and Almay brands.”

Meanwhile, Ingrid Jackel, vice president of marketing at Physicians Formula, one of the few brands to buck the down trend in color cosmetics and post double-digit increases, said she thinks the market as a whole will make a comeback. It will likely be a conservative gain, but Jackel anticipates growth of three to five percent. In particular she expects a recent spike in sales of cosmetics kits to continue. And to keep its own sales going, which are now up 34 percent over last year, Physicians Formula will be offering more value-oriented promotions including gift-with-purchase offers.Bill George, senior vice president of Markwins International, expects an even stronger second half, especially since the company is now producing products with AM products, such as Wet 'n' Wild. “We think retailers are looking for products like ours to drive shoppers into our stores," George said, adding that the company is revamping Black Radiance.

Teen cosmetics, however, are not expected to have a comeback season, where sales have been faltering —

Target is expected to trim its lineup to one brand.

Still, Lotta Luv, a newcomer to the youth market, is positive about the second half of the year. “A combination of new licenses, strong sell-throughs at retail and new customers are feeding our growth,” said Steph Fogelson, president. “We anticipate our business on comparable doors with increases by 50 percent, new customers will add on approximately 20 percent and new licenses will increase our business by approximately 20 percent.”

And Beauty Beat [formerly Worldwide Cosmetics] is expecting growth of 25 percent, driven predominantly by skin care. Michael Eckert, executive vice president, retail sales, also predicts Marbella eye and lip pens sales will rise 5 percent and Savina nail products will increase 10 percent.

The hair care category is void of product launches for the last half of the year, leaving in-store promotions and advertising campaigns from heavy spenders, such as John Frieda, Garnier and Dove, to drive sales during the period. Despite a slew of new launches, most notable by Unilever and Garnier, hair care sales for the first six months of 2003 were $1.7 billion, down 1.4 percent from the same period last year. Sales figures exclude Wal-Mart. Of that number, hair color sales were down 3.6 percent; shampoo sales slipped 0.6 percent, conditioner sales fell 1.7 percent and sales of styling aids decreased 0.2 percent.

Jerry Dowell, a leading industry consultant, said the retail chains he deals with — CVS, Rite Aid and Eckerd — are disappointed that the last six months of 2003 will be absent of any new significant hair care launches.

“I don’t know if I remember a time that nothing new was coming from Unilever, L’Oréal, Procter & Gamble and Clairol. That’s a strong theme,” remarked Dowell.Andrew Gross, vice president, brand development and marketing, hair and oral care, for Unilever predicts the coming months will reveal a strengthening in market trends, mirroring the overall recovery in the economy, and agreed that driving trial through in-store promotions will be paramount to manufacturer success.

The bath category isn’t fareing much better — and retailers are threatening to cut shelf space if sales don’t pick up.

“Since the category is declining in the mass market, we know from retailers that there is pressure for cutting back space in the category,” said Stephanie Hayano, divisional vice president of the mass market arm of Wella, maker of the Yardley bath brand.

According to IRI, all bath additives (which excludes body washes and bar soaps) were down 9 percent in dollar sales to $101.5 million, and down 11 percent in units sales to 37.3 million for the 52 weeks ended May 18, excluding Wal-Mart.

Declines in bath emerged in mid-2001 after a five-year growth spurt. The category continues to suffer for a number of reasons, such as market saturation, polarization and specialty bath’s failure to compete with upscale offerings at value prices, according to manufacturers.

Michael Piff, vice president of global sales and marketing for Minnetonka Brands, a value brand manufacturer, pointed to sales of the company’s Village Naturals Spa line as an example; the brand’s sales are up 6 percent for the 52-week period. Specialty bath’s leading brands, Calgon and Healing Garden, however, are both down for the the most recent six months, 16 percent and 6.4 percent, respectively, according to IRI.

On the flip side, Wella’s Hayano said, innovative bath lines still have some thunder, namely Yardley’s new Apothary line, “proving that if you have something new and different, there is an opportunity for growth. Innovation is the watchword.”

Other trends in bath include a switch from bar soap to body washes, with IRI data citing 6 percent decreases in deodorant bar soap sales and a 2 percent sales increases in liquid soap. Marie-Anne Aymerich, vice president, brand development and marketing, at Dove Skin Global, said the personal wash category is growing slightly with body wash leading most of the growth. More and more consumers are trading in the bar for body wash, she said, and added benefits are helping drive the category’s premium pricing. Some examples of Unilever’s newest innovations driving growth are the new Dove exfoliating bar and body wash; Caress shimmering bar and body wash, and Lever 2000 Body wash All Day Refreshing relaunch.Looking forward, Piff forecasts similar sales decreases for the balance of the calendar year, with “margins for both retailers and suppliers challenging.” Consumers are expected to continue their quest for value-priced products into the holiday time frame, putting pressure on products priced above $10. The battle between national brands and lower-priced imports and private label gift sets will heat up for the holiday season, too. Piff also touched on the possibility that shelf space in the category “will shrink further before it expands again,” particularly since Sarah Michaels, once the category’s leading specialty bath brand, filed for bankruptcy earlier this year. Wella’s Hayano said manufacturers, including the company’s Yardley brand, are currently “jockeying for Sarah Michaels’ space,” but noted the very real possibility of it being allocated to other growth categories within mass stores.

Anastasia Ayala, senior vice president of global fragrances for Coty, believes the industry should brace itself for a seismic change in bath merchandising next year. “I think there are so many brands and products in specialty and classic bath that both retailers and manufacturers have overwhelmed the consumer without order and communication. We have commoditized the category.” In response, Coty “is in the midst of a big project for bath,” including months of consumer research which ultimately will “create new [bath] environments” in mass stores.

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