UNILEVER PERSONAL CARE SALES RISE
Byline: JAMES FALLON
LONDON — Unilever PLC Thursday said its personal care division, which includes brands such as Calvin Klein Cosmetics and Dove, had a 28.6 percent increase in operating profits, to $1.89 billion, on a 17.8 percent rise in sales, to $11.72 billion in the year ended Dec. 31, 2000. This compares with operating profits of $1.47 billion on sales of $9.95 billion in 1999. (Dollar figures are converted from local currency at current exchange rates.)
The group did not break out results for its prestige operations, which it now groups under its Unilever Cosmetics International division. The division oversees brands such as Vera Wang, BCBG and Nautica as well as Calvin Klein. UCI also absorbed the Cerruti, Lagerfeld, Chloe and Valentino fragrances following the sale of Unilever’s Elizabeth Arden business to then FFI Fragrances for $240 million. Following the sale, FFI changed its name to Elizabeth Arden. Unilever owns 18 percent of the new Arden and is its largest single shareholder.
The sharp increases in profits and sales in Unilever’s personal care operations stemmed partially from currency fluctuations but also from strong product launches in both the prestige and mass markets. Niall FitzGerald, the Anglo-Dutch company’s co-chairman, said Thursday the group’s remaining prestige beauty business was boosted by the launches of Calvin Klein Truth and the first men’s fragrance from Nautica.
In the mass market, Unilever benefited from the continued extension of its Dove and Vaseline brands into product categories such as hair care. FitzGerald said the Dove extensions alone added sales last year of $158.5 million.
Unilever continues to search for ways to leverage the strength of its core personal care brands. The company last year opened a freestanding barber shop in London for its men’s personal care brand Lynx and a second unit was added in the London suburb of Kingston in late January.
The group also launched a Web site called Rituals.com last year offering 175 of its body and home products based on such every day rituals such as drinking tea or bathing. The Web site was supported by the opening of a freestanding Rituals store in Amsterdam last October.
“All these are about learning — about consumer habits, behavior and new business models,” FitzGerald said Thursday.
Overall, Unilever reported a 58.5 percent drop in net profits, to $1.07 billion from $2.58 billion, on a 6.9 percent rise in sales, to $40.84 billion from $38.21 billion. Profits declined sharply because of the company’s massive restructuring program during the year, which resulted in exceptional charges of $1.67 billion. Unilever announced plans last year to reduce the number of its brands by more than half, cut 25,000 jobs and boost its operating margins to more than 16 percent by the year 2004.
“After the first year of the five-year Path to Growth Program, we are well on plan,” FitzGerald said, adding that he remains confident the group can achieve its goals.
