How Did Revlon Fare In The Year 2016?
This has been an extremely significant year for Revlon and it could safely be said that Revlon made a turnaround in its performance this year. Revlon’s largest shareholder, Ron Perelman, was looking for strategic alternatives for the company towards the beginning of 2016 due to its continued weak performance. However, things started changing after Revlon’s former CEO stepped down in March and Fabian T. Garcia became the company’s new President and CEO. Soon afterwards, Juan R. Figuereo was announced as Revlon’s new Executive Vice President and Chief Financial Officer. Along with these major management shuffles, Revlon’s strategic focus seemed to change. The company acquired Cutex International business, operating in the U.K. and Australia, from Coty in June. Revlon already owned a part of Cutex and with this acquisition, Revlon completed the global consolidation of Cutex’s worldwide operations under its own brand portfolio. Shortly after that came Revlon’s biggest highlight of the year, the decision to acquire premium beauty company, Elizabeth Arden, which put Revlon among the top 20 beauty companies in the world.
Revlon’s Acquisitions
- Cutex
After consolidating the Cutex brand, Revlon now aims to redesign some of Cutex’s nail care products and expand the portfolio of offerings so that it appeals to a wider customer base. Revlon’s color cosmetics’ contribution to its revenues has been between 55% to 65% over the last five years. This acquisition might further help in boosting Revlon’s largest business segment.
- Elizabeth Arden
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Revlon’s acquisition of Arden is probably an attempt to revive both the beauty companies whose popularity had been waning, lately. Revlon didn’t have a major presence in the luxury beauty segment prior to this acquisition and Arden’s array of luxury skincare, makeup, and perfumes definitely expands Revlon’s scope to grow its business portfolio, and, in turn, result in its sales growth. Revlon’s diversification of its portfolio to prestige beauty comes at a good time as the global prestige beauty segment has started regaining its popularity in 2015 after several years of lackluster demand. The U.S. prestige beauty market grew by 7% Y-o-Y to reach $16 billion in 2015. Additionally, Arden will help in expanding Revlon’s distribution network and geographic expansions, too. Arden has a strong presence in travel retail and a good geographic presence in regions such as Asia Pacific. Revlon, which has so far earned over 50% of its revenues from North America, a matured market in terms of beauty demand, will surely benefit with a greater presence in regions with rising demand for beauty. An important change that might occur due to this acquisition is that the role of fragrance might increase significantly in Revlon’s portfolio. This, in turn, can increase Revlon’s market share in the global antiperspirants, deodorants, and fragrance market, which, in turn, might lead to a significant increase in Revlon’s stock price valuation.
Revival Of Erstwhile Popular Brands
Though the company is bringing a host of new brands under its umbrella, it is also keen to revive the in-house brands whose popularity had been lately declining. Towards that end Revlon is taking a number of steps. Its brand, Revlon ColorSilk hair color, after receiving setbacks in the enterprise in-home hair color category, had started launching a new shampoo and conditioner for color protection and the early response has been encouraging. Its Almay brand will begin repositioning itself towards the second half of the next year, on the basis of an extensive research on over 1,700 consumers. Revlon’s nail brand, CND’s sales had been dampened by its competitors offering lower priced substitutes in the high-performance nail segment. Hence in 2016, Revlon launched CND Creative Play, a range of 80 shades in the value priced nail enamel category. The company also has an innovative pipeline expected to be launched in the latter half of 2017.
Revlon’s Current Focus
Currently Revlon’s focus lies in growing at a pace that surpasses the industry growth rate. It aims at achieving this by concentrating on fast growing beauty segments, diversifying its distribution channels, and growing more rapidly in Asia. Secondly, it wishes to expand its reach in the digital and multichannel space as well as the professional salon channels. Finally, it is aiming for an efficient cost structure that allows for investments while maintaining sound profitability.
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Have more questions on Revlon? See the links below.
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