NEW YORK — Maintaining that New Dana Perfumes Corporation is “repaired,” the investors who came to the fragrance marketer’s aid in 1999 are looking for buyers.
This story first appeared in the March 7, 2003 issue of WWD. Subscribe Today.
Dimeling, Schreiber & Park has retained Carl Marks Capital Advisors LLC to handle the sale. DSP purchased New Dana after the company had filed Chapter 11 and needed major operational and financial restructuring. New Dana markets classic fragrances such as Canoe, Chantilly, Tabu and English Leather, as well as artificial nail products.
“We are in the business of buying distressed companies that have the people and products that can help us fix the problem,” said William R. Quinn, principal of DSP. “The time frame for turnaround with the companies we work with is generally three to five years.” McCall Patterns and Piper Aircraft are also in DSP’s portfolio.
According to Quinn, New Dana’s turnaround is complete and it is a healthy company with annual sales in excess of $73 million. As is typical with this type of sale, there is no stated asking price.
Under DSP, New Dana reestablished relationships with retail partners. Although the company didn’t lose fragrance doors, it did drop some distribution in nail care. Additionally, DSP had to steer New Dana through rocky times in the mass fragrance business, as well as enhance New Dana’s delivery level. Wesley said the delivery level has hit 99.7 percent.
“Everyone knows the mass [fragrance] market is in decline,” said Tony Wesley, chief operating officer of New Dana. Despite the tough fragrance climate, Wesley said New Dana has held its own. And, since there are so few fragrance marketers left serving the mass market, retailers have a vested interest in seeing New Dana survive.
According to statistics for the 52 weeks ended Jan. 28, total New Dana Perfumes Corp. drug, food and mass sales, excluding Wal-Mart, totaled $33.3 million, a decline of 9.5 percent versus the same period in 2002. New Dana had several bright points — specifically with ancillary deodorants to its scents, which grew almost 30 percent, new soaps to complement the scents and the company’s nail accessories and implements.
In addition to the classic fragrances, New Dana is launching a new scent in the U.S. called Secrets by Dana. Plus, the company created a new nail and home spa line called Frills, which was recently well-received by retailers at a trade show. “Our seasonal promotions are in full swing and the fact that we have been able to launch a totally new product line [Frills] through New Dana’s Cosmar division and introduce a new fragrance says we are here to grow,” said Wesley. “This company has come a long way in the most positive sense.”
Wesley said there are three different types of buyers who could be interested in New Dana. First would be a company already in fragrances looking to flex its muscles through consolidation. Another scenario could be a firm concentrated in the prestige end of the business looking to add mass-market distribution. Wesley also said a firm that has a thriving mass-market fragrance business in other parts of the world might use New Dana as an entry to the U.S. New Dana products are distributed in more than 10,000 doors.
The company stresses that this is basically a paper transaction and that all of the executives who have helped rebuild New Dana will stay in place. One top retailer briefed on the plans expressed that she felt it would be “business as usual” for New Dana.
This is another step in the odyssey of the company, which was originally called Renaissance Cosmetics. Founded by Thomas Bonoma on the premise that older brands could be revived with proper nurturing, the company flourished until the sudden death of Bonoma in 1997. Following Bonoma’s death, debt-loaded New Dana was further plagued by several shifts in management. A teen line called Fetish, which was to be hawked by singing star Christina Aguilera, also fell apart.
When DSP stepped in, it worked to burnish New Dana’s image. Without massive advertising budgets, New Dana created unique promotions such as a consumer sweepstakes and more in-store events to drive sales of the classic scents. All gift sets also sported a theme, a successful tactic that is being continued to Christmas 2003.
Markwins International Corp. has acquired certain brands and assets of AM Cosmetics Corporation. Financial details were not released.
The privately held Markwins is a leading marketer of color blockbuster kits under the names of ACT, The Color Institute, POP and Color Workshop. For the immediate future, Markwins will maintain the staff and offices at AM’s headquarters in North Arlington, N.J.
Markwins has become the darling of mass market retailers over the past few winter holiday seasons as shoppers looked for value. The company’s products are also distributed at department and specialty stores.
AM Cosmetics is the parent of budget leader Wet ‘n’ Wild, as well as Artmatic, Black Radiance, Tropez and Jonel.
Wet ‘n’ Wild and Artmatic were fierce competitors until they were merged under one parent — both lost sales after the consolidation. Wet ‘n’ Wild has emerged as the dominant value brand at the expense of Artmatic.
The buy is a coup for Markwins because it nets important peg wall space occupied by Wet ‘n’ Wild. Wet ‘n’ Wild had one of the highest sales and profits per linear foot in the cosmetics business and is sold at chains including CVS, Rite Aid and Target. The deal also takes the company into the flourishing ethnic cosmetics market with Black Radiance. Black Radiance and Tropez occupy the number-one and -two market share positions in ethnic beauty.