BOOTS STEPS UP PRIVATE LABEL
Byline: Ruth Gurevitch
LONDON — Boots is getting more aggressive in the European marketplace.
The company’s Boots The Chemist chain already is the U.K’s leading health and beauty retailer with a 28 percent market share, and now Boots has outlined a strategy of expanding its influence into Continental Europe and beyond.
The expansion plan entails capitalizing on the firm’s dominance of the British mass market by becoming a supplier to more and more European retailers.
The Boots Contract Manufacturing division is already the largest producer of private label beauty products in Europe — with the bulk of its business done in the U.K. — and has been making acquisitions to gain entry into key markets such as France and Germany. BCM had sales of $384 million (240 million pounds) last year and employs a staff of 3,500.
The use of local suppliers enables BCM to cut down on distribution problems that might arise by supplying entirely from the U.K. To that end, Boots announced two strategic acquisitions in late March: for a total of $24.3 million (15.2 million pounds), it bought PLCP SA, a private holding company and owner of French company Roval SA and Spanish firm Roval Cosmetics SA.
Both are manufacturers of personal care toiletries, and Roval SA’s current annual volume of $43.2 million (27 million pounds) makes it the leading supplier of private-brand toiletries in France.
“We are delighted to be making these acquisitions, which now makes BCM the leading player in the private label toiletries market in France, Spain and Portugal,” said John Watson BCM’s managing director. “This move is in line with our strategy of expanding our business in the growing private label sector in Europe, where France and Spain are significant targets.”
BCM has been on a European push since late 1995, when it acquired two small toiletry and cosmetics companies in France and Germany from Croda International PLC. With the new purchases, five companies are now operating under the BCM umbrella.
The existing company in France, called BCM Cosmetique, has increased its private label business by 30 percent in the past year. The strongest increases have been seen in the cosmetics and skin care sectors.
The addition of the French Roval will enable BCM to supply much larger volumes in France. Boots estimates that the sales in 1997 of Roval SA and BCM Cosmetique should reach about $64 million (40 million pounds) this year.
In France, Roval SA has two factories in Normandy and produces eau de cologne and personal care toiletries for major French retailers, primarily supermarket chains.
BCM Cosmetique supplies color cosmetics, skin care and deodorants to major French retailers and French and international cosmetics and toiletries companies and supermarkets.
BCM had no presence in Spain until it bought Roval Cosmetics, which specializes in personal care toiletries and counts among its major customers Spanish retailers and Spanish branded goods companies.
Boots’s German division, BCM Kosmetik in Frankfurt, manufactures color cosmetics primarily for German and international cosmetic companies.
Meanwhile, BCM UK, located at Boots’s head office in Nottingham, has two factories in the U.K. that supply health-care and personal-care products and cosmetics to Boots The Chemists, in addition to major U.K. supermarkets and branded goods companies in health care and personal care.
BCM UK’s best-selling cosmetics line, called Boots No. 7, had sales last year of $100.75 million (65 million pounds) — an increase of 20 percent after a major relaunch campaign. No. 7 is targeted at the 25-and-older age group and is the leading retail brand in the U.K., with a 10.3 percent share of the color cosmetics market.
The company has a more teen-oriented cosmetics line called 17, which had a volume last year of $46.5 million (30 million pounds).
Boots The Chemist’s strength in bath and body products is reflected in solid sales f its Global and Natural collections and its second private label line, Botanics, technology-heavy formulations with natural ingredients, which was introduced in July 1995.
With the continued additions of more products to the Botanics range and new items to the men’s toiletries categories, the corporate idea is to offer a comprehensive bath and body selection for the whole family.
As for Botanics alone, Boots want to “create a powerful pan-toiletries brand, which we believe will be worth $15.5 million (10 million pounds) in the first year,” said David Kneale, director of merchandise and marketing, at an analysts’ presentation here last fall.
The company is also seeing increasing gains in its private label sun care business, with its Soltan line currently the British market leader.
The company has recently introduced two new sun care formulations for sensitive skin. The Soltan Sun Sensitive range offers protection without irritation for people who are prone to rashes caused by sun exposure. The Soltan Derma Care range provides sun protection for those with extra-sensitive skin by leaving a film of reflective particles on the skin’s surface, according to the company.
Boots has also launched new product ranges for sensitive areas, including hair, scalp, lips and eyes. These products include a Hair and Scalp Protector Gel and a Soltan Lip and EyeCombi, a tube of SPF 15 cream for the eye area combined with a colored lipstick containing SPF ingredients.