With a new chief executive officer, Revlon shifted gears in 2007, slowing its product pipeline while working to fix past wrongs.
David Kennedy was named ceo in September 2006 following an abrupt management shake-up at the venerable beauty company. His predecessor, Jack Stahl, and much of Stahl’s executive team were ousted after a series of key strategies that backfired, including the failure of Vital Radiance, a premium-priced cosmetics brand for older women.
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In the last year, Kennedy has attempted to ignite profitable sales growth by instituting a new product launch program that determines which items are in-and-out efforts, and which can be built out, longer term. The latter mandates that each item be backed by a succession of new products and marketing over a planned period of time.
The seemingly simple approach marks a decisive departure from Revlon’s former practice of heralding one-hit wonders.
Kennedy also has worked to return the firm’s focus to Revlon, its $1 billion global flagship brand, after the now-defunct Vital Radiance and the revamp of the firm’s Almay line took up the bulk of the company’s efforts in 2006. This fall, Kennedy told WWD, “It’s a product-driven business, but that doesn’t mean you offer a product of the week or of the month. You’ve got to do it strategically.”
He later added, “We are looking for a portfolio that gives us the profitable growth we need, but is also intensely competitive.”
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Kennedy said the aim is to have more ideas in development that are moving toward commercialization so the company can react quickly when trends bubble to the surface. When asked about a timeline for profitability, Kennedy said: “We’ve got to get the Revlon brand going in the right direction. We have to get momentum going and that will be a major driver of profitable growth for us around the world.”
Revlon’s pragmatism seems to be paying off. In its most recent quarter ended Sept. 30, the beauty firm’s restructuring efforts and cost controls helped narrow the net loss to $10.4 million, from a loss of $100.5 million in the year-earlier period. Sales gained 11 percent to $339.7 million from $305.9 million in the prior year.