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Natural Looks, Treatment Fuel Southeast Gains

ATLANTA -- A boom in nail care and strong gains in treatment are fueling the drugstore cosmetics business in the Southeast, according to area retailers.

A sampling of drugstores indicates cosmetics sales in the region range from flat for the...

ATLANTA — A boom in nail care and strong gains in treatment are fueling the drugstore cosmetics business in the Southeast, according to area retailers.

A sampling of drugstores indicates cosmetics sales in the region range from flat for the year to date to gains in the high-single digits. New products, most notably professional nail care and alpha-hydroxy acid skin care, are leading the business.

At the 1,712-unit Eckerd, based in Largo, Fla., cosmetics and fragrance enjoy prominent real estate and are important merchandise classifications, according to Carol Allman, category manager.

She said the cosmetics category overall has experienced high-single-digit increases year-to-date, singling out March as her best month.

Allman pointed to two major changes in customer buying habits. First, she said the emphasis on the natural look has taken color cosmetics out of the limelight. She said Revlon’s new Exotika line is one of the newest “natural colors” lines.

Second, Allman said, treatment has found a new audience, thanks to the alpha-hydroxy acid products now available in drugstores and to the baby boomers’ desire to retard the signs of aging.

“Skin care is a rising tide. It’s become just as important as color in the world of makeup,” Allman said.

Eckerd carries the Alpha Hydrox brand as well as Oil of Olay and Pond’s, both of which offer alpha-hydroxy-based items. L’Oreal’s new Plenitude product, Excell-A3, is making its debut soon.

Within the next few months, Allman added, a manufacturer will be shipping Eckerd a thigh cream priced at $19.99.

“It’s going to be a high-visibility item, but I don’t know how long it will last,” she said.

Nail care is another growing area for Eckerd, and Allman credited the gains to improved quick-dry formulations and to customer demand for professional products. She said Del Labs’ Sally Hansen line is doing especially well.

“Women have less time to pamper themselves,” Allman said. “They are flocking to get professional products that they can use at home. People are realizing they can buy it at Eckerd instead of a beauty supply shop. It’s become a nice new business for us.”

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Allman said she is eagerly awaiting the new fragrance launches, saying the category at the mass level has been “sleepy.”

“We’ve also asked manufacturers to come up with new [ancillary] products because fragrances are cannibalizing each other,” she said. “Customers are just trading in one fragrance for another.”

Allman noted that Revlon’s new television campaign is bound to bring in business.

“The best thing suppliers can do is invest in TV,” Allman said. “I can’t tell you how long it’s been since I’ve seen color cosmetics on television. It’s essential to the marketing of the products.”

Harco, a Tuscaloosa, Ala.-based chain with 120 stores in Alabama, Mississippi and Florida, also has put a new focus on nail care, according to Penny Wade, category manager for cosmetics and fragrance.

“Women are coming from the salon looking for professional nail care,” she explained, pointing to Pro Care as a line that is doing particularly well.

Wade said the boom in nail care is a trend, not a fad, and Harco is expanding its nail care lines accordingly to capitalize on the trend. “It’s key in this business to distinguish between fads and trends,” she said.

Overall, cosmetics sales are up 9 to 10 percent for the year to date. Both the fragrance business and color, however, are flat.

Coty is outperforming any other manufacturer in fragrance, Wade said, citing Cover Girl and Max Factor as her best color lines.

She attributed the slowness of color to a lack of newness in the market. “It’s very neutral right now, and you can’t do much with neutral shades,” she said.

Treatment products, including Almay’s new skin care line called Time Out, are generating more excitement, Wade said. Time Out, which arrived this month, is Harco’s first full product line to contain alpha-hydroxy acid.

“Women have been concerned with the reaction they might have to alpha-hydroxy, and with Almay being a hypoallergenic line, it should reassure the customer,” Wade said.

While Harco has not placed a special emphasis on the beauty business, Wade said the company is aware of the additional sales it provides.

“Our core business is still drugs and personal products,” she said. “You can’t lose sight of what you are here for.”

Wade said her editing has changed as a result of advances in technology.

“I’m always adjusting and fine-tuning our mix,” she said, noting that she looks at individual items as well as overall sales of the vendor. “I treat each manufacturer as a category. I look at space allotment and sales per square foot. It changes every day.”

At King’s Drug Store, a 31-year-old drug store in the Dunwoody area of Atlanta, president Steve Sharp said he’s also been doing a lot of editing.

Sharp said he is phasing out unprofitable lines such as L’Oreal and increasing the profitable ones. Ultima II and Elizabeth Arden are King’s two best-selling lines, and Sharp said he is increasing the product mix of both.

King’s also carries some mass lines, such as Cover Girl and Revlon, as a convenience to customers, but Sharp said he is decreasing his buy on them because of competition from many grocery stores.

“There’s a Kroger right near us, and we just can’t compete with them,” Sharp said. “We are trying to tailor our product to better meet our customers’ needs.”

While sales the year to date have been about even with last year, Sharp said cosmetics overall is a profit area for him. King’s has 1,500 square feet devoted to the category out of 7,500 total square feet.

As with Eckerd and Harco, King’s is also benefiting from solid gains in nail care.

“I think people are looking at drugstores for price and selection, and department stores don’t really carry nail care,” Sharp said.