Revlon
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| Revlon Incorporated | |
|---|---|
| Type | Public (NYSE: REV) |
| Founded | 1932 |
| Founder | Joseph & Charles Revson, Charles Lachman |
| Headquarters | New York City, New York,  |
| Key people | David L. Kennedy, President and CEO |
| Industry | Cosmetics, skin care, fragrance, personal care |
| Revenue | ▲$1.331 BillionUSD (2006) |
| Employees | 6,800 |
| Parent | MacAndrews & Forbes Holdings: 60% (74% of votes) FMR Corp.: 20% |
| Website | US Site |
Revlon (NYSE: REV) is an American cosmetics company.
Contents |
[edit] History
Revlon was founded in the midst of the Great Depression, 1932, by Charles Revson and his brother Joseph, along with a chemist, Charles Lachman, who contributed the "L" in the REVLON name.
Starting with a single product — a new type of nail enamel — the three founders pooled their resources and developed a unique manufacturing process. Using pigments instead of dyes, Revlon developed a variety of new shades of opaque nail enamel. Successful in salons from the start, in 1937 Revlon started selling the polishes in department stores and drug stores. In six years the company became a multimillion dollar organization. By 1940, Revlon offered an entire manicure line, and added lipstick to the collection. During World War II Revlon created makeup and related products for the U.S. Army, which was honoured in 1944 with an Army-Navy Award for Excellence.
By the end of the war, Revlon listed itself as one of America's top five cosmetic houses. Expanding its capabilities, the company bought Graef & Schmidt, a cutlery manufacturer seized by the government in 1943 because of German business ties. This acquisition made it possible for Revlon to produce its own manicure and pedicure instruments, instead of buying them from outside supply sources.
In 1952 Revlon launched a fragrance called "Fire and Ice", which was heavily publicized over the radio with ads featuring Bob Hope and Red Skelton. By 1955, Revlon sponsored the CBS television show The $64,000 Question. The same year rival Hazel Bishop brought formal allegations of wiretapping. Revlon argued they monitored their employees' telephone calls for "training" purposes, but agreed to stop the practice. The same year Revlon reorganized as Revlon, Inc.
In November 1955, Revlon went public. The IPO price was $12 per share, but it reached $30 per share within 8 weeks.
In the 1960's, Charles Revson segmented Revlon Inc into different divisions, each focusing on a different market. He borrowed this stratedgy from General Motors. Each division had its own target customer: Princess Marcella Borghese was an upscale, international line; Ultima 2 was the premium line; Revlon was the largest, and popular-priced brand; Natural Wonder was aimed at the junior customer; Moon Drops was aimed at dry skins; and Etherea was a hypo-allergenic brand. There is an unsettled debate as to whether Estee Lauder stole Revson's idea and created Clinique, or the other way around. However, there is no debate which hypo-allergenic line became successful. Revlon's non-beauty ventures were not so successful, either.
In 1957, Revlon acquired Knomark, a shoe-polish company, and sold its shoe-polish line Esquire Shoe Polish in 1969. Other poorly chosen acquisitions, such as Ty-D-Bol, the maker of toiler cleansers, and a 27 percent interest in the Schick electric shaver company were also soon discarded. Evan Picone, a women's sportswear manufacturer which came with a price tag of $12 million in 1962, was sold back to one of the original partners four years later for $1 million. However, the 1967 acquisition of U.S. Vitamin and Pharmaceutical Corporation did make Revlon, for a while, a leader in diabetes drugs.
The company had begun to market its products overseas at the end of the 1950s. By 1962, when Revlon debuted in Japan, there were subsidiaries in France, Italy, Argentina, Mexico, and Asia. Revlon's entrance into the Japanese market was typical of its international sales strategy. Instead of adapting its ads and using Japanese models, Revlon chose to use its basic U.S. advertising and models. Japanese women loved the American look, and the success of this bold approach was reflected in the 1962 sales figures, which were almost $164 million.
In 1968, Revlon introduced Eterna27, the first cosmetic cream with an estrogen precursor called Progenitin (pregenolone acetate), as well as introducing the world's first American fashion designer fragrance, Norman Norell. Later, Revlon launched Braggi and Pub for men, and a line of wig maintenance products called Wig Wonder. In 1970 Revlon acquired the Mitchum line of deodorants.
In 1973, Revlon introduced Charlie, a fragrance designed for the working woman's budget. Geared to the under-30 market, Charlie model Shelley Hack in Ralph Lauren clothes personified the independent woman of the 1970s. This is the first perfume ad to feature a woman wearing pants. Charlie was an instant success, helping to raise Revlon's net sales figures to $506 million for 1973 and to almost $606 million the following year. Their follow-up fragrance, Jontue, quickly began the number 2 best seller.
In 1975, Charles Revson died. Michel Bergerac, who Revson had hired as President of the company, continued to grow the organization. Revlon acquired Coburn Optical Industries, an Oklahoma-based manufacturer of ophthalmic and optical processing equipment and supplies. Barnes-Hind, the largest U.S. marketer of hard contact lens solutions, was bought in 1976 and strengthened Revlon's share of the eye-care market. Revlon purchased Armour Pharmaceutical Company, a division of Armour and Company, from the Greyhound Corporation in 1977. Other acquisitions included the Lewis-Howe Company, makers of Tums antacid in 1978. These health-care operations helped sales figures to pass the $1 billion mark in 1977, bringing total sales to $1.7 billion in 1979.
By the mid-1980s, Revlon's health-care companies, rather than Revlon's beauty concerns, were innovating and expanding. Reluctant to initiate beauty-product development or department store promotions, Revlon lost ground to Estée Lauder, a privately held company whose marketing strategy of high prices with accompanying gifts had earned it almost universal center-aisle department store space. This caused Revlon's share to drop from 20 percent to 10 percent of department store cosmetics sales. Sales at the drugstore also declined as Revlon lost share to Noxell's Cover Girl brand. Revlon compensated with more acquisitions; Max Factor, Ellen Betrix, Charles of the Ritz, Germaine Monteil, Almay, Fermodyl, Lancaster, Aziza, and Halston. The 1977 acquisition of Carlos Colomer, a Spanish professional beauty supply distributor, brought Fermodyl and Roux and helped introduce Revlon to the world of ethnic care: Creme of Nature, Realistic, Lovely Color and Milk and Honey became highly successful international. In 1983 the company attempted an unsuccessful hostile takeover of Gillette.
On November 5, 1985, at a price of $58 per share, totaling $2.7 billion, Revlon was sold to Pantry Pride (later renamed to Revlon Group, Inc.), a subsidiary of Ronald Perelman's MacAndrews & Forbes Holdings. The highly leveraged buyout--engineered with the help of junk bond king Michael P. Milken--saddled Revlon with a huge $2.9 billion debt load, which became an albatross around the company's neck for years to come. Pantry Pride Inc. offered to buy any or all of Revlon's 38.2 million outstanding shares for $47.5 a share when its street price stood at $45 a share. Initially rejected, he repeatedly raised his offer until it reached $53 a share while fighting Revlon's management every step of the way. Forstmann Little & Company swooped in at $56 a share, a brief public bidding war ensued, and Perelman triumphed with an offer of $58 a share. Perelman paid $1.8 billion to Revlon's shareholders, but he also paid $900 million of other costs associated with the purchase.[1] Perelman had Revlon sell 4 division: 2 for $1 billion, vision care division for $574 million and National Health Laboratories division became a publicly owned corporation in 1988. Additional makeup lines were purchased for Revlon: Max Factor in 1987 and Betrix in 1989 later selling them to Procter & Gamble in 1991.[2]
In the late-1980's and early 1990's, fashion photographer Richard Avedon began shooting up and coming top fashion models for the advertising campaign "The Most Unforgettable Women in the World wear Revlon".
As of June 2007, Revlon has reported 27 consistent quarterly losses, with only minor relief through selling off divisions and businesses. Today Revlon is but a fraction of the size it once was, only housing the Revlon, Almay, Mitchum, and Jeanne Gatineau lines. It still owns Ultima 2, which is no longer sold in North America, and is rumored to be next on the chopping block.
[edit] Ownership
- MacAndrews & Forbes Holdings: 60% (74% of votes)
- FMR Corp.: 20%
[edit] Corporate governance
Current members of the board of directors of Revlon are: Alan Bernikow, Paul Bohan, Meyer Feldberg, Debra Lee, David Kennedy, Ronald Perelman, Linda Robinson, Barry Schwartz, Kathi Seifert, and Ken Wolfe.
[edit] Subsidaries
[edit] Domestic
- Almay, Inc., a Delaware corporation
- Charles of the Ritz Group Ltd., a Delaware corporation
- Charles Revson Inc., a New York corporation
- Cosmetics & More Inc., a Delaware corporation
- North America Revsale Inc., a New York corporation
- PPI Two Corporation, a Delaware corporation
- Revlon Consumer Corp., a Delaware corporation
- Revlon Consumer Products Corporation, a Delaware corporation
- Revlon Development Corp., a Delaware corporation
- Revlon Government Sales, Inc., a Delaware corporation
- Revlon International Corporation, a Delaware corporation
- Revlon Products Corp., a Delaware corporation
- Revlon Real Estate Corporation, a Delaware corporation
- RIROS Corporation, a New York corporation
- RIROS Group Inc., a Delaware corporation
[edit] Foreign Subsidiaries
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[edit] Spokesmodels
Some of the actors\actresses, models, and singers appeared in the TV commercials and print ads included:
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[edit] References
- ^ Stevenson, Richard. "Pantry Pride Control of Revlon Board Seen Near", New York Times, 1985-11-05, p. D5. Retrieved on 2007-04-27.
- ^ MacAndrews & Forbes Holdings Inc. (HTML). Funding Universe. Retrieved on 2008-05-16.
- ^ SUBSIDIARIES OF THE REGISTRANT (html). SEC filings. Retrieved on 2008-05-21.
- Stewart, James B. Den of Thieves. New York: Simon & Schuster, 1991. ISBN 0-671-63802-5.
[edit] External links
- Official website
- Yahoo! - Revlon, Inc. Company Profile
- [1]
- About Revlon Inc. in French / Au sujet de la Cie Revlon
- Revlon sales lifted by good duty-free performance
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