NEW YORK — The overhaul of Hard Candy and Urban Decay is continuing.

Nearly a year after LVMH Moët Hennessy Louis Vuitton sold the brands to the Falic Group, a Florida-based firm known for its strength in travel retail channels — Wende Zomnir, the founder of Urban Decay, who is now creative director for both brands, is ready to kick off the next phase of the freshening process: redoing the packaging for Hard Candy, as well as adding a brush line for Urban Decay and discontinuing lipstick and a number of other stockkeeping units for Hard Candy.

Despite being two of the most talked about indie brands of the Nineties, Hard Candy and Urban Decay seemed to losesteam after being acquired by LVMH. Zomnir acknowledges that the brands, particularly Hard Candy, hit some rough footing along the way. However, Zomnir said she believes the new strategies are getting both brands moving in the right direction.

Zomnir is also continuing her effort to create distinct images for the two brands: an older, more sophisticated age target for Urban Decay, and a younger, more accessible positioning for Hard Candy. Urban Decay’s new age target is 18- to 40-year-olds, while Hard Candy is aimed at 12- to 24-year-olds.

As part of the road to that goal, more than 80 percent of Hard Candy’s current sku’s will be discontinued, a process that started earlier this year and which will continue throughout 2004. While Zomnir noted that the cuts are across the board in eyes, lips and face, she has chosen to discontinue lipstick entirely in favor of lip gloss. “That’s really where we see the Hard Candy consumer going,” she said. “How many teenagers are wearing matte lipstick?”

Also, over the last few months, Hard Candy has implemented lower prices — for instance, compacts are now closer to $25 than $35, while the entry price point — for a lip balm — is $6.50. “The $25 range is about as prestige as pricing gets, realistically, for an average teenager,” said Zomnir. “We’ve already seen increased sales from this move.”

Hard Candy’s outer packaging used to be primarily silver with accent colors, including deep purple, ice blue and peach. The new look is done in shades of pale blue and chartreuse, with a new tagline:“Be Sweet, Be Seen.” The new tagline is expected to be in full use across all Hard Candy doors by March. More age-appropriate sku’s are also on tap: “We’ll be adding more teenager-type things — like oil-absorbing powder — for Hard Candy very soon,” said Zomnir. Some of the inner packaging will be redone as well —?for instance, while the compacts will keep the same tops that they have had, the bottoms will be color coded and will allow consumers to see the shades through the bottom of the compacts.For Urban Decay, brushes —?made of synthetics rather than animal products, thus earning the name “Good Karma” brushes —will be out in February. Each is named for its purpose. “How many times do you see a brush named ‘Brush #3’ and not know what it’s meant for?” she asked rhetorically. “So ours are called blush brush, liner brush, whatever its function is.”
Key partners for both Hard Candy and Urban Decay include Sephora and Nordstrom in the U.S. In total, Hard Candy is available in 217 doors globally, 161 in the U.S. and 56 internationally. Urban Decay is in 275 doors globally, with 155 in the U.S. and 120 internationally. Both brands are in 83 Sephora doors in the U.S. As well, Hard Candy plans to refresh about 25 key doors in the first part of 2004, plus open new stores, said Zomnir.

While the brands are currently estimated by industry sources to do about $30 million at retail in total, the aim, said new owner Leon Falic in May, is to grow the brands’ revenues 30 to 50 percent over the next three to five years. Added Zomnir: “Since the recent acquisition of Urban Decay and Hard Candy, the brands are meeting expectations due to their strong brand identities and loyal customer base. The potential of these companies, however, has not yet been achieved. We will get there in a couple of years, and intend to grow on an annual compound growth rate of 15 percent.We’ll reach this as planned because our shareholders are committed, and have put a great team in place. The previously stated goal of $50 million in the next three to five years is attainable and we are committed to surpass it.”

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