THE BEAUTY SUMMIT

CAREFREE, Ariz. — Virtually every facet of the American cosmetics and fragrance industry came together here last week for the first annual WWD Beauty CEO Summit, a meeting historic in its composition and scope.
A Who’s Who of beauty executives spent three days at The Boulders resort discussing the most vexing issues of the day — from the steady erosion of the American department store business to the resilience of the gray market, the blurring of traditional price boundaries, a Europe in flux and how to approach emerging markets like China.
“There’s a power struggle, especially in Europe, between the retailers, who are consolidating more and more, and the manufacturers, who are always trying to control the consumer and are trying not to be under the thumb of an increasingly dominant and smaller number of retailers.”
That was one of the points scored by Leonard Lauder, chairman and chief executive officer of Estee Lauder Cos., in the keynote speech that opened the conference Sept. 10.
If Lauder served as the curtain raiser, the encore was provided by George Fellows, president and ceo of Revlon Inc.
Fellows, who was the driving force behind Revlon’s recent renaissance, pulled no punches in a poolside address that centered on his view that marketing strategies are unoriginal, product launches are often just weak imitations and fresh ideas are scarce.
“There is a certain trend that we’ve talked somewhat about over the last three days that I think is really important for us to take notice of, and more importantly, to do something about,” Fellows said.
He noted the beauty industry “was created by a unique breed of entrepreneurs, insightful risk-takers who were not afraid to push the boundaries of the obvious, to go to new and different places that captured the imagination of our consumer.”
However, he continued, “Today, unfortunately, it looks as if our business is heading in the direction of becoming a copycat industry where playing it safe takes the place of playing to win; where our focus is more on what our competition is doing and less on what our consumer demands.”
An array of panel discussions covered issues that affect all regions of the industry, from mass to class, retailer to vendor and advertising executive to sample manufacturer. (In-depth stories on the various activities begin here and continue through page 22.)
The kickoff panel featured a discussion of why sales are migrating from department stores; it was the first signal that department store retailers, on the whole, would take a verbal beating from their vendors throughout the Summit proceedings.
John Stabenau, former vice president of Neiman Marcus, even complained at one point of “retail bashing.
During the three-hour “Preserving Equity” session, involving more than a dozen top executives, diversion, unfair department store chargebacks and abusive behavior in general all got their due.
Also on the menu were overpromotion, particularly the gift-with-purchase crutch; the market’s voracious appetite for an incessant stream of new products, and many manufacturers’ anemic profitability.
Discussion of gwp’s took up such an inordinate amount of time and caused such angst that the president of Clinique introduced himself at one point by saying, “I’m Dan Brestle, the anti-Christ of gwp.”
In addition to the myriad panels were keynote addresses by Guy Peyrelongue, president and ceo of Cosmair Inc.; Michael Steinberg, chairman and ceo of Macy’s West, and Beth J. Kaplan, executive vice president of marketing at Rite Aid Corp.
Peyrelongue analyzed parent L’Oreal’s two-pronged strategy for doing business in the prestige and mass markets simultaneously.
Steinberg discussed the migration of cosmetics business from department stores to the mass market, and how to get it back.
Kaplan gave an overview of cosmetics merchandising at Rite Aid, perhaps the most aggressive and acquisitive drugstore chain operating in the mass market today.
There was a bonus presentation from NPD BeautyTrends.
Before and after the hard-hitting conversations, executives braved the Sonoran Desert heat and got in some rounds of golf. No doubt the links were filled with chatter on how to find growth in a challenging industry.

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