NEW YORK -- Will things go better with Coke? A Coke executive, that is.
Earlier this week, Revlon named former Coca-Cola Co. president and chief operating officer Jack Stahl to the post of president and chief executive officer, replacing Jeffrey Nugent who resigned.
Many mass retailers wonder if the new face was merely to give a pop to Wall Street, rather than to assist Revlon in its revival.
The Street may have grown tired, but retailers said -- whether they thought Nugent was the right ceo or not -- that they crave more stability in Revlon's management.
Stahl is the fifth chief executive in the 16 years financier Ronald Perelman has owned the controlling stake in the beauty firm. Not only is Stahl the latest to walk through Revlon's revolving door, he also comes from outside the beauty business. That fact has raised some eyebrows.
What merchants said they need isn't necessarily a new face -- rather steadiness and innovation to return to Revlon. "Regardless of who is in there, the company needs some stability," said Mark Griffin, the current chairman of the National Association of Chain Drug Stores and the president and ceo of Lewis Drugs. "We need to look forward at the long-term health of Revlon."
There was more fallout on Tuesday when Revlon ranks were further shaken with the resignation of Cheryl Vitali, executive vice president of Revlon Global. Several retailers wondered if more change would follow.
There's no denying Revlon has lost its image as the fashion authority in the mass cosmetics business. It has been forced to take third place behind L'Oreal's Maybelline division and Procter & Gamble's Cover Girl division. Worse yet, Revlon even stumbled in the lip category, a business it had dominated since the dawn of mass beauty. That wasn't helped by a less than fabulous launch by Revlon of a new lip product last year called Absolutely Fabulous.
However, in the last few months, retailers report a glimmer of life from Revlon brands. Although most said beauty is starting to pick up across the board, they singled out Revlon for its improvements versus last year. Sources at chains including Eckerd, Duane Reade and Rite Aid confirm that Revlon business is up over last year. Duane Reade is even adding back some footage that was removed from Revlon in past revisions of its peg walls. And, Revlon finally seemed to realize the specific needs of regional drug chains."Revlon has also started reacting to more of our needs and thinking realistically," said Gerald Heller, president and ceo of May's Drug in Tulsa, Okla.
The hope, however, that Revlon is at the start of a curve to regain its place as the top mass beauty brand comes too late for Nugent. And retailers wonder if the appointment of Stahl will set them back, or give them the impetus to push ahead.
"His dealings with the trade will be important," said Heller. "Sol [Levine, a former Revlon chief] traveled to all of the chains and was very visible," said one president for a regional chain. "Jerry Levin was great and George [Fellows] got out there, but often couldn't fix what he said he would."
Although generally liked, several top executives said Nugent wasn't the most outgoing of Revlon's ceo's. They credited his efforts in getting Revlon's business in order and cleaning up several Revlon ills. In the past, Revlon grew by forcing products on retailers, resulting in bloated inventory. Inventory levels today are much cleaner. Although many aspects of new trade terms are paying off, retailers are still bruised over the return policy.
Revlon's in-store support still is a sore point, as well. Revlon's fixtures had fallen behind the industry and chains complained of a lack of help in fixing problems at store level. On the bright side, buyers think the company finally got it right with a new fixture for Almay. "It really is a beautiful and easy-to-shop fixture," said Karen Durham, the divisional merchandise manager for Duane Reade. There's also a new display being rolled out for Revlon called Her Wall.
What retailers said Nugent wasn't able to fix is a lack of vibrant new products and marketing to make those products compelling. Several launches during 2001 didn't hit the mark. And the aborted advertising campaign for Absolutely Fabulous that one buyer called "chicks in the bathroom" was not well-received by the trade. "ColorStay was a blip," said Suzanne Grayson, a former Revlon executive who now consults. "It is easy to pick on advertising when a brand is floundering. No one in the company understands what made Revlon a great company. They have to get management with the guts to make Revlon different."That's where Perelman hopes Stahl comes in. In an interview earlier this week, Stahl likened the beauty business to the beverage industry where Coca-Cola had to help increase per capita consumption of drinks in general.
Can Stahl, a lifelong beverage executive, put some fizz in Revlon that will encourage women to buy more beauty products? And, can he accomplish what executives with beauty experience couldn't do? There are many who are cautious. "It hasn't worked when beauty companies have gone outside of the industry before," said Bob Grayson, who heads Grayson Associates along with his wife Suzanne.
Retailers echoed that concern. "It is tough for an outsider to 'get' cosmetics. This isn't Coke," said Heller. Another cited a lack of beauty acumen made it harder for Procter & Gamble to succeed in cosmetics after it first acquired Cover Girl.
But, retailers are hopeful and would like to see a healthy Revlon. However, warned one chain topsider, the industry is also finding it can do with less Revlon. His chain cut the footage down and although some sales were lost, the entire department gained in profitability. "Sure the Revlon name is important, but at some point not worth the headaches," he said.
Once again, chain executives said, they'll give the new guy a chance. They'll listen once again to plans for a revitalized brand. At least the company is in better shape than during the last incarnation.
"The heavy lifting has been done and now Revlon needs the marketing and fashion part. I'm sure he [Stahl] has plenty of bullets and new products on deck," said Griffin optimistically.
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