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Beauty Roundup: April 24, 2009

The National Association of Chain Drug Stores holds its annual gathering of top-to-top executives.

Greetings From The Breakers

The Breakers has long been the unofficial home away from home for the National Association of Chain Drug Stores. Although the lauded Annual Meeting moves to Arizona every three or so years, The Breakers just “feels right” for the gathering of top-to-top executives.

 

This year was no exception. However, there was no escaping that the Palm Beach of 2009 is a different place after Bernard Madoff. Worth Avenue, for example, is quiet — especially the store Trillion which is where Madoff was said to have purchased (but never picked up) a pair of $2,000 slacks. Locals said it is not cool to be spotted on Worth Avenue right now. There were a handful of vacant stores and also vacant offices along the well-kept streets of Palm Beach. Madoff’s house was easily found — he was even listed in the phone book. Even that was unimpressive.

 

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The mood at the meeting was also a bit sad — but not without hope for light at the end of the tunnel. Most attending said a recovery is at least four to five years off. Also, those attending the cabana pow wows said the deals that chains are asking for are tougher than ever. Walgreens, in particular, is getting more aggressive every vendor said. The firm plans to unveil a refreshed store format and is chopping many brands out of its mix to do so. Walgreens is working with McKinsey & Co. on the stock keeping utilization process.

 

Some beauty companies are trying to ratchet up innovation to make their brands stand out so that retailers won’t cut them from the planograms that will be set up next February.

 

The other mood dampening trend at Annual was a shortening of inventory on hand. For some beauty firms, that results in out of stocks, but also tightened cash flow. Attendance was not as reduced as expected. Most retailers and manufacturers still had a big presentation — albeit fewer spouses. One executive’s wife reached via cell phone before the meeting said it just wasn’t right this year to come along — although she admitted she’d miss the fabulous gift at the luncheon for spouses (this year a fresh-water pearl bracelet to match last year’s necklace). Privately, many companies did think the attendance hit could come at Marketplace where firms just won’t feel the need to pony up big sums to see the dwindling number of accounts. NACDS executives maintain, however, that it is the most important gathering in the industry and that companies feel the need to be there.

 

On the positive side, retailers appear to be enhancing the ambience in fragrance departments and opening up glass cases — finally. For those not facing the editing pencil at Walgreens, there is enthusiasm about the germinating store look. There was excitement about cosmetics being expanded once again in Sears as well as Kmart. Sears’ return to beauty comes at a time the firm found that they were losing apparel customers because of not having cosmetics.

 

NACDS annual returns to Palm Beach next year (and then to Arizona). Perhaps we’ll all have the bucks then to buy something at Trillion.

 

Next: People, Places and Things>>

 

People, Places and Things

A few words with Andy Giancamilli, chief executive officer of Katz Canada and the current NACDS chairman.

WWDBeautyNews: Brief our readers on Katz.
Giancamilli: For those of you who are not familiar with my company, I’d like to introduce you to who we are. Katz Group is one of North America’s leading integrated pharmacy groups, with more than 1,900 pharmacies across Canada and the U.S. We are a network of chain, franchise and independent pharmacies. Our two flagship brands are Rexall in Canada and Snyder’s Drug Stores in Minnesota.

WWDBeautyNews: What categories will start selling to signal that we’re emerging from the recession?
Giancamilli: Definitely we’ll know when prescriptions return to normal levels. Also more beauty products and skin care.

WWDBeauyNews: Tough times can still be good for mass market beauty, right?
Giancamilli: Masstige items have excellent value in hard times. Consumers are shopping differently now and it will take some time for them to shake these new habits.

What’s In Store

Alstodt Honored: Former Del Laboratories executive Harvey Alstodt was presented with the Robert B. Begley Award which recognizes an individual with the qualities of generous spirit and longtime service to the chain drugstore industry.  New York City-born and bred, Alstodt’s career includes over 40 years in the industry. Retailers said Alstodt was shocked and touched by what they consider a well-deserved award.

The Male Zone: It was turnabout fairplay at the annual meeting. Women have always been pampered at NACDS by Procter & Gamble and Sally Hansen. This year, Gillette treated the men to shaves, dry hair styling and massages at a specially-created pampering area overlooking the ocean.