STORES SHARPEN NAIL SHARE

Byline: Faye Brookman

NEW YORK — When Genovese Drug Stores opens a new store here tomorrow, one of the biggest draws will be free manicures.
A manicurist will be stationed in the cosmetics department opening day at the store, which is in Forest Hills, Queens.
Kiss Products Inc. of Port Washington, N.Y., will provide the manicurist. The nail care manufacturer knows its good deed will be amply repaid in sales.
“The manicurists do one nail with an artificial nail, and once [the customers] see how good it looks, they buy a kit to do the rest,” said Larry G. Kapfer Jr., vice president of sales and marketing for Kiss.
He estimated that sales of Kiss more than triple during a typical in-store demonstration.
Besides being a traffic lure for store openings, nail care is an area with “significant growth,” said Stephanie Hayter, cosmetics buyer for Genovese. In addition to Kiss, Genovese stocks Cosmar, Jonel, Nailene, Sally Hansen, Cutex, Orly, Top Ten and IBD, she said.
And Genovese, based in Melville, N.Y., isn’t the only chain experiencing dynamic sales growth in nail care, especially in at-home nail extensions.
With salons charging as much as $30 for nail tips, many consumers are opting for at-home kits at a fraction of the cost. False nails now account for 29 percent of the $600 million retail nail care industry, or $174 million, according to nail care manufacturers.
One reason for the growth is that the nail extensions are far superior to the inexpensive glue-ons popular in the early Eighties.
For the 12 months ended July 31, sales of false nails increased 18 percent in dollar volume and 13 percent in units, according to Towne-Oller, a market research firm here. Dollar amounts were not available.
“The quality of retail artificial nails now compares favorably to salon treatment products, but the products are available at a much lower price at mass merchandiser channels,” said Thomas V. Bonoma, president of Renaissance Cosmetics Inc.
Renaissance owns Cosmar Corp., the market share leader in the self-applied fake nail business, according to market reports. Statistics provided by Renaissance show Cosmar’s LaJoie, Press & Go and PRO lines producing 41 percent of all artificial nail product sales in drugstores and 30 percent in mass merchandisers.
K&B Inc., based in New Orleans, advertised Cosmar false nails last year with a TV spot that showed a woman who was asked for a date just after she broke a nail. She solved the problem by purchasing a Cosmar Press & Go glue-on nail.
Cosmar will start shipping nail color to augment its PRO line this March.
The popularity of the fake nails has encouraged several chains to enlarge their nail care assortments. Walgreen Co. of Deerfield, Ill., has expanded its professional nail care set, according to a company spokesman.
The Cosmetic Center of Savage, Md., offers an array of nail care items and nail tips such as Cosmar’s LaJoie and PRO 10.
Even supermarket chains are in the game: Pathmark Stores in Woodbridge, N.J., has a 4-foot professional nail care department in its new Store 2000 format. The selection includes Cosmar, Kiss, Nutra Nail, Nature’s Oil, LaCross and Sally Hansen.
Donna McManus, buyer at K&B, called nail care one of the few cosmetics bright spots at the Chain Drug Marketing Associates Meeting last fall in Orlando, Fla.
Wal-Mart of Bentonville, Ark., is leading the discounters’ charge into professional nail care with products from Cosmar, Nailene, Sally Hansen and CCA. Kmart is testing salon-style nail products.
American Stores has installed a beauty salon, complete with manicurist, in a unit in Salt Lake City. Nail care products are sold in the salon and in the store.
With all the interest in nail extensions, suppliers of the fake nails are tinkering with various marketing techniques to make their lines stand out.
Kristy Wells, for example, is packaging nails in a clear box so customers can see them before purchasing.
Kiss is offering a 40-nail value pack, with nails sized for each finger, at $3.49 a box. Retailers are promoting kits like these because the use-up rate is high.
“When you do your nails, you might mess up one and then you have to file a size meant for another finger down to fit the one you did wrong,” said Kapfer of Kiss. “With this kit you have a choice.”
Kiss has added four new shaped tips to its product selection, according to Kapfer.
The marketing of false nails has opened the door for cross-merchandising maintenance products such as moisturizing gels. Sales of these items were up 12 percent in dollars and 7 percent in units through last July, according to Towne-Oller.
Fueling growth of nail treatments, buyers said, are more sophisticated, salon-inspired formulations, such as Sally Hansen products.
“Sally Hansen Professional is about to complete its first year on the market and is well on its way to becoming a dominant force in the category,” said Bill McMenemy, group vice president of marketing at Del Laboratories Inc., Farmingdale, N.Y., which markets Sally Hansen.
“Del aims to attain a goal of 50 percent share of market of this emerging category and maintain a leadership position.”
He added that Sally Hansen Professional is now in 12,000 doors and he expects to increase that number to 15,000 by the end of this year.
Three stockkeeping units will bow this spring — Sally Hansen Professional Heat Sealed Top Coat, Heat Sealed Base Coat and Gel Nail Glue — bringing the sku count to 30.
Sales of other nail care products, such as French-style manicure kits and nail glues, rose 24 percent for the year ended July 31, according to Towne-Oller.
This growth was created by lines filtering into the mass market that were once only available in salons, said buyers.
For instance, Orly International Inc., based in Chatsworth, Calif., pioneered the French Manicure technique for salons and now sells a French Manicure kit at retail.
But despite rampant growth, there has been a shakeout, according to Kapfer. “Retailers are finding room to expand the lines that turn as they eliminate some lines,” he said.
Buyers said they have been weeding out some older lines, such as Lee. “We are at the point where we’ll drop the slow movers to test new items,” said Valerie Cheney, buyer for the Newark, Del.-based Happy Harry’s chain.
According to retailers, point-of-sale scan data allows them to add and delete nail care items faster than ever. Some drugstore chains — such as Snyder Drug Stores in Minneapolis and Revco D.S. in Twinsburg, Ohio — are freeing space for larger nail care selections by reducing the space devoted to slower-turning color cosmetics brands.
Working with scan data, Revco got rid of duplications in color cosmetics and fragrances to create room for an expanded nail care department, according to a Revco spokesman.
One chain used scan data to weed out 100 skus in the nail care department. Sales rose 10 percent.
“I think we were able to make the department easier to shop and we had less product duplication,” the buyer said.
Although consumers are becoming more educated about nail care through exposure in salons, buyers said there is still confusion about how to apply fake nails and what products are needed.
Many chains are asking vendors to train nail care beauty consultants to sell color and treatment. Revlon and L’Oréal now have such training, and K&B held a training seminar in conjunction with IBD last year.
Because nail care can be perplexing, retailers are adopting “family-style” merchandising.
Instead of merchandising by function — such as grouping all nail tip kits in one location and all nail treatments in another — chains such as Walgreens and The Cosmetic Center are grouping skus by vendor.
That way, buyers said, consumers can purchase an entire regimen in a brand they like.
Although nail treatment sales are outpacing the nail color category, buyers said a few new technologically advanced products should help revive color sales.
Sally Hansen’s newest innovation is Color Grip Long Wearing Base Coat. According to McMenemy, the water-based system is fortified with calcium to provide extra color adhesion and to hydrate the nail plate.
Another growth area is implements, such as files. Retailers said implements provide gross margins in the 40 percent range, higher than tips and treatments, where margins are less than 30 percent. Kiss offers a collection of professional nail implements, and Revlon’s implements line is gaining space in such chains as Revco.

Fake nails have revolutionized nail care. Revlon hopes fake hair can do the same for hair care.
The company launched its Clipit clip-on hair extensions on QVC in July and has since rolled out the line in Walgreens. Clipit, a ponytail extension that clips on a with a comb, sells for $49.95.
Revlon thinks the mass market has been exposed to hair accessories through fashion magazines and informercials. The company is training Walgreens cosmeticians to attach and style Clipit, which comes in shades to match most hair colors.
Eckerd Drug, Largo, Fla.; Longs Drug Stores, Walnut Creek, Calif., and Arbor Drug, Troy, Mich., all merchandise a competing brand, René of Paris. These extensions have a suggested retail of $29.95.
Although hair extensions have primarily been used by African-American women, according to retailers, store executives expect all women will buy them.

Carol Allman has shelved her order pad in favor of a word processor and the life of a part-time novelist.
Allman resigned as director of merchandising and purchasing at Jack Eckerd Corp. after more than 16 years with the company.
Allman said Thursday she will relocate to Morganton, Ga., where she will be a consultant for the over-the-counter drug and beauty business. She said she also plans to write a novel on “the intrigue and excitement of the retail business.”
Allman has been one of the most influential retailers on the chain store beauty scene. What made her the most proud, she said, was overseeing the growth of the bath and skin care business, being named a Clairol mentor and helping develop the new beauty prototype Eckerd first installed in its Coco Beach, Fla., store.
The company has not yet named a successor.

Oil of Olay’s first foray into the booming alpha-hydroxy acid market has been aborted.
On Thursday, Procter & Gamble Co., which markets the Olay treatment line, said it has suspended the sale of two products in its new Visible Recovery Series, Oil of Olay Renewal Cream and Oil of Olay Renewal Lotion. Both products contain salicylic acid, a beta-hydroxy acid, and were launched about a year ago.
The company is taking similar action internationally; the items are sold under the Oil of Olay umbrella in 48 countries.
“We were receiving an unacceptably high amount of complaints from consumers who used the products too close to their eyes,” said Carol Boyd, a company spokeswoman. “In October, we put warnings on the packaging and in the advertising. We thought that would work.”
Boyd noted that despite this effort, the company still received many complaints about eye irritation.
P&G has alerted retailers that they will be given a refund if they want to return the items. Consumers who purchased the products can get their money back by calling 800-395-5523.
“We are not pulling the product from the shelves or recalling it back from consumers,” Boyd said. “Effective today, we are suspending shipment until we can come up with a milder product.” The Visible Recovery Series was intended to appeal to more sophisticated consumers than the users of Oil of Olay’s signature line of moisturizers and cleansers.
While company executives declined to comment on the suspension’s impact on business, industry sources previously estimated that the series, which also consists of an eye gel that does not contain the acid, would have a U.S. wholesale volume of more than $15 million in the first year.
Sources estimated Oil of Olay does worldwide sales of about $650 million. Its U.S. wholesale volume is more than $170 million.

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