Revlon aims for $5bn sales with revitalized brands

Bloomberg

Revlon Inc., the beauty giant that bought Elizabeth Arden Inc. last year, aims to reach $5 billion in sales within five years by reinvigorating brands and stepping up marketing.
Chief Executive Officer Fabian Garcia, speaking to employees in a video memo, said Revlon would become a top 10 global beauty brand by hitting that target. Including Elizabeth Arden, the company generates $3 billion in a year in sales. Prior to the combination, Revlon ranked 22nd, according to Women’s Wear Daily.
“Brands don’t get old, marketers get lazy,” Garcia said in an interview. “Instead of going out and paying outrageous valuations for new brands, we need to spend that money rebuilding and revitalizing our iconic brands.”
As part of a reorganization plan, four teams will be created to focus on the Revlon brand, Elizabeth Arden products, fragrances and the company’s other labels, including Almay.
The company’s $419 million purchase of the unprofitable Elizabeth Arden was seen as a surprise by investors who speculated Revlon was an acquisition target rather than a buyer. A year ago, the investment firm led by Ron Perelman — which owns 77 percent of Revlon — said it was considering “strategic alternatives” for the business. Now, the premium brand is expanding Revlon’s product categories and geographical footprint.
Revlon’s approach veers from its competitors, which have been buying up independent brands to drive growth and attract millennials. Estee Lauder Cos. recently snapped up Too Faced, and L’Oreal SA acquired IT Cosmetics — with both deals topping $1 billion. Each Revlon team will make a three-year growth plan and set priorities and strategies for their labels, said Garcia, 57, who joined the company in April. The new structure will help Revlon identify investment areas quicker and let it react faster to consumer needs domestically and abroad, he said.
North America makes up almost 60 percent of revenue. The company aims to beef up sales in China, South Korea, Japan and Taiwan, Garcia said. Across the industry, Asia accounted for 37 percent of retail beauty sales in 2015, the biggest region, according to data from Euromonitor. Today’s beauty shopper buys multiple brands at different price points and wants them accessible from both brick-and-mortar and online retailers, Garcia said. The company has enlisted singers Gwen Stefani and Ciara as its new global brand ambassadors to capture younger consumers, who increasingly turn to social media for makeup and shopping advice.