Revlon Retains Vitally Important Retailer Support

Revlon's future with its trade partners may not be as precarious as some industry watchers had feared. In fact, it may have gained a coveted asset despite the shut-down last month of its disappointing Vital Radiance line--additional retail shelf space.

How Revlon handled the discontinued product probably preserved its retail relationships, says William Chappell, an analyst at SunTrust Robinson Humphrey. Revlon's decision to take returns of all Vital Radiance products not sold, even though it wasn't legally obligated to do so, appears to have smoothed over retail relations, says Chappell.

So much so that of the incremental six feet in retail display space Revlon garnered when it launched Vital Radiance, Revlon says it will get to keep two of those extra feet allocated to its Almay brand, according to Chappell.

"As long as Revlon launches a decent lineup of new products and maintains marketing levels, it should retain market share and grow with the industry at 4 percent a year," Chappell says.

Early in September, acknowledging a need to fix its financial woes and salvage its reputation, Revlon ousted then-CEO Jack Stahl and installed the company CFO David Kennedy at the helm. Within weeks Revlon cut 250 jobs, officially pulled the Vital Radiance line, which targeted women age 45 and over, and dismissed the marketing executives who backed the disappointing launch--Stephanie Klein Peponis, chief marketing officer, and Rochelle Udell, executive vice president and chief creative officer.

In pulling the line--a necessary response to a terribly disappointing launch--Revlon had essentially left itself open to marred relationships with retail partners. Retailers already had absorbed Revlon's price cuts on the product line, and then a name change to Vital Radiance by Revlon, before it was finally yanked. Brands with good odds to take over the old Vital Radiance space include Physicians Formula, a popular niche brand that recently started advertising on TV and in print, or Coty's Rimmel.

Revlon's handling of the withdrawal improved its trade profile--especially with key partners Wal-Mart and Target--and kept those critical relationships intact, Chappell believes.

How Revlon handled the discontinued product probably preserved its retail relationships, says William Chappell, an analyst at SunTrust Robinson Humphrey. Revlon's decision to take returns of all Vital Radiance products not sold, even though it wasn't legally obligated to do so, appears to have smoothed over retail relations, says Chappell.