By  on July 11, 2006

NEW YORK — Vital Radiance, Revlon's boldest product launch during Jack Stahl's four-year tenure, has taken a hit, as several major retailers cut distribution of the brand from a number of their doors.

The setback is expected to contribute significantly to a projected $55 million operating loss, $40 million of that anticipated from Vital Radiance, in the second quarter.

Revlon's woes are set within a wider industry debate that pits increasingly impatient mass market retailers against vendors, who argue that their ambitious product launches should be given more time to take root. Mass manufacturers are used to being given a year for their launches to hit their stride. Retailers, armed with sophisticated point-of-sale scanner data, argue that the verdict should be known in a few months. Revlon began rolling out Vital Radiance in January.

Revlon's loss of planogram shelf space comes after Vital Radiance, which is aimed at women age 50-plus, failed to yield robust sales, according to Stahl, Revlon's president and chief executive officer. The setback soured the strong start the beauty firm had enjoyed this year.

Revlon would not comment on which retailers cut the brand's space or how the lost doors would affect the company's 2006 overall space gains this year. When the firm announced its new product initiatives for both the Revlon and Almay divisions, the company predicted it would pick up 22 percent additional shelf space.

"Vital Radiance is a great product line that works effectively with its target demographic," Stahl told analysts during a Monday morning conference call. "Given that it's a new brand focused on a demographic almost completely ignored in the mass channel until our launch, its success requires building awareness and trials with women that we have either dropped out of the category completely, or who have become disappointed with traditional products," Stahl said.

"It also requires the partnership of all retailers to provide the space and in-store support to enable success, and we gained that significant support going into 2006."

The concept, noted Stahl, seems to resonate better in the food and drugstore channels — venues visited more frequently by Baby Boomers — than in mass retailers. However, he confirmed that retailers now expect new entries to pay off sooner than in the past. "There is no question that retailers have increasingly short windows in which they are evaluating the performance of the new brand, and there were some decisions made to reduce the number of stores in certain of our large-format retailers," said Stahl, who later referred to Revlon's shrinking space as an "optimized retail footprint."

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus