Revlon has the look of a leader in the US mass-market cosmetics business, alongside L'Oréal's Maybelline and Procter & Gamble's Cover Girl. Aside from its Almay and Revlon brands of makeup and beauty tools, the company makes Revlon ColorSilk hair color, Mitchum antiperspirants and deodorants, Charlie and Jean Naté fragrances, and Ultima II and Gatineau skincare products. Its beauty aids are distributed in more than 100 countries, though the US is its largest market, generating more than half of sales. Revlon products are primarily sold by mass merchandisers and drugstores such as CVS, Target, Shoppers Drug Mart, A.S. Watson, Boots, and Wal-Mart. Charles Revson founded Revlon in 1931.
The US is Revlon's largest market, accounting for about 55% of sales. The cosmetics maker also has operations in more than a dozen foreign countries and enjoys a global reach and leading positions in several product categories in Australia, Canada, and South Africa.
Revlon is one of the world's top cosmetics makers across the mass retail channel, known for its color cosmetics in the face, lip, eye, and nail categories, as well as women's hair color and beauty tools. It has built a big business selling cosmetics and beauty products in the US to mass-market retailers and chain drug and food stores, collectively known as the mass retail channel. It also sells its products overseas through department stores and specialty shops such as perfumeries. It also markets its beauty products to US military exchanges and commissaries, including the Army and Air Force Exchange Service, and operates a business that licenses its top brand names to third parties for beauty products and accessories for royalty income.
Sales and Marketing
The beauty giant spends heavily to promote its products in the hotly-competitive beauty market. Revlon reported advertising expenses, including TV, print, and digital ads, and in-store promotional displays, of $264.9 million in 2012, up from an average of $255.7 million during the past three years.
The mass-market cosmetic company's largest customer is Wal-Mart, which accounted for about 22% of its total sales in 2012.
Revlon's 2012 net sales increased more than 3% (or $45 million) compared with 2011, while net income fell 4% over the same period.The uptick was primarily driven by higher sales of its color cosmetics, including the recently-acquired Sinful Colors line, and Revlon ColorSilk hair color. Sales also got a boost from the acquisition of the Pure Ice brand halfway through the year. These gains were partially offset by lower sales of fragrances and other beauty care products. Strong demand for its products in Latin America and Canada led to a 12% annual sales gain in the region, outpacing the US, where sales rose by more than 5% in 2012 versus 2011. Sales in Europe, the Middle East, and Africa fell nearly 12%. 2012 marked the third consecutive year of rising sales for Revlon after a drop off in 2009 during the global financial crisis.
To improve profitability Revlon aims to strengthen its strong brands and operations on a global scale. Weak sales in France and Italy led Revlon to exit its company-owned manufacturing facility in France (as well as a leased plant in Maryland) and reconfigure other international operations. Previously, the company implemented a global restructuring and revised its executive structure to ride out the recession. The effort was expected to save Revlon $30 million. Dubbed a right-sizing, the restructuring streamlined support functions, consolidated office facilities, and reduced layers of management. About 400 jobs were also cut, including 75 unfilled positions. Revlon's latest undertaking follows other moves in years past to improve its stubbornly poor financial performance.
Mergers and Acquisitions
In July 2012 Revlon acquired Bari Cosmetics, Ltd., owner of the Pure Ice nail enamel and Bon Bon cosmetics brands, for $66 million in cash. In March 2011 the company purchased Sinful Colors cosmetics for $39 million cash, Wild and Crazy cosmetics, freshMinerals cosmetics, and freshcover cosmetics, all of which are sold in the US by mass merchants, Revlon's largest target customer niche.
The New York socialite, financier and chairman of Revlon, Ron Perelman, owns about 76% of the combined voting power of Revlon's voting capital stock, through holding companies, including MacAndrews & Forbes.