Revlon targets older women to boost sales

updated 3:00 p.m. ET April 10, 2006

NEW YORK - Revlon Inc. is looking to recapture its glory by chasing after an underserved market: women over age 50.

As part of a turnaround effort, the New York-based cosmetic company unveiled its biggest launch in more than a decade, Vital Radiance, a line of makeup formulated for older women.

Largely forgotten as Revlon and other competitors such as L’Oreal SA have focused on age-defying beauty products for women in their 30s and 40s, the segment is becoming a hot new opportunity. Female heads of household over age 45 account for about 69.3 percent of cosmetic purchases at mass retailers, according to data supplied to Revlon by ACNielsen, a market research company.

L’Oreal, whose Age Perfect collection is aimed at the younger boomer, is slated to introduce this fall a cosmetics and skin care collection exclusively marketed to women in their 50s and 60s. Meanwhile, Procter & Gamble Co. which has an age-defying beauty line called Cover Girl’s Advanced Radiance, is studying the older market, according to Dr. Sarah Vickery, a senior scientist at P&G’s cosmetics division.

Revlon is counting on the launch of Vital Radiance, along with its revamping of its Almay brand, to fuel a turnaround begun when Jack Stahl came on board as CEO and president in early 2002. He took over the reins from Jeff Nugent, who abruptly departed after only two years on the job.

Under Stahl, Revlon has been on a campaign to strengthen its brands and revitalize sales of color cosmetics, like lipstick and blush, as it faced increasing competition from such rivals as L’Oreal SA’s Maybelline and P&G’s Cover Girl.

The company had been hurt a large debt load since it was sold in 1985 to a subsidiary of MacAndrews & Forbes Holdings, a holding company controlled by financier Ron Perelman, who is majority shareholder and chairman of Revlon. Revlon has made major inroads in cutting its debt, most recently announcing plans to issue $185 million in stock to pay down debt.

Revlon announced in February it was undertaking an overhaul of its business in which it will eliminate about 165 jobs — or just under 2.5 percent of its global work force — in an effort to reduce costs.

So far, the efforts have worked. The company announced early last month that stores have allotted 23 percent more shelf space to Revlon’s color cosmetics offerings this year compared to a year ago. Meanwhile, losses at the overall company continue to narrow. Last year, Revlon lost $83.7 million, or 23 cents per share, compared with a loss of $142.5 million, or 47 cents per share, in 2004. Net sales reached $1.33 billion, up from $1.29 billion in the previous year.

Revlon management declined to say how much the company spent to launch Vital Radiance, but executives said it marks the company’s biggest investment since the introduction of ColorStay long-lasting lipstick in 1994. Revlon hopes it will get dissatisfied customers back to buying cosmetics with a more personalized, upscale approach that’s rare at discounters and drug stores.

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