Revlon Inc. Case Study

Topics: Cosmetics, Vertical integration, Revlon Pages: 6 (1671 words) Published: April 16, 2011
Revlon Inc. Case Study: 1). Introduction
History: Revlon is a universal company that sells products for skin care, cosmetics, personal care, fragrance and professional products. It was founded in 1932 and began in the nail polish market, soon after expanding into lipstick. Over the past six years, Revlon has consistently lost revenue and struggled with debt. Even though they have eliminated executive positions, reduced staffing and consolidated sales and marketing functions to save an approximate $33 million, the company is still in serious trouble. Revlon was founded in 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 nail enamel unlike any before it - the three founders pooled their meager resources and developed a unique manufacturing process. The company began its success with opaque long-lasting nail enamel sold to beauty salons. Revlon sold its nail enamel through department stores and selected drugstores. Revlon contributed directly to the war effort, by manufacturing first aid kits and dye markers for the navy. At war's end, Revlon began to produce manicure and pedicure instruments. Following the war, Revlon launched twice-yearly nail enamel and lipstick promotions tied to seasonal clothing fashions. Revlon also turned to television sponsorship to boost sales. In December 1955, Revlon first offered stock to the public. At the end of the following year, Revlon was listed on the New York Stock Exchange. Revlon laid the ground work for its highly successful international presence in the 60's, bringing the "American Look" to the rest of the world through advertising featuring U.S. models. Growth and innovation led the way for Revlon. In 1985, Revlon was sold to a subsidiary of MacAndrews & Forbes Holdings. In 1987 Almay joined the Revlon lineup In the 1990's, Revlon revitalized its cosmetics business and strengthened its industry leadership role. Revlon introduced the first transfer resistant lipcolor which led to a full ColorStayTM Collection of transfer-resistant products. The company closed the gap on its

closest competitors and reached a dramatic goal - the #1 brand in mass color cosmetics. Revlon again became a public company in 1996, listed on the New York Stock Exchange (NYSE). Present Conditions: Revlon is struggling to recover and collect debt of almost $2.3 billion. The research and development department is also struggling to offer new products to the market. In recent years Revlon launched Vital Radiance, a cosmetic line for older women with 100 products and it was the largest launch since ColorStay in 1994. However the product was not well received by the market because other competitors already provide the products and the prices of the Revlon product was also very high as compare with rivals. Revlon discontinued the brand in September 2006. Revlon planned to launch a new prestige fragrance called Flair in 2006, but delayed the launch until debt could be restructured. The company issued $185 million in stock in 2006 to raise money to reduce debt. MacAndrews and Forbes Holdings agreed to purchase a portion of the stock and to purchase nay stock not purchased by current stockholders. MacAndrews also extend a line of credit of $87 million to Revlon which can help the Revlon in the recovery of losses. Competitors: The Revlon’s major competitors are Proctor and Gamble, Avon Products, Estee Lauder Companies, L’Oreal, and Unilever. Other competitors include samall companies such as Urban Decay, Specialty stores such as Bath and Body Works, Body Shop, and Victoria’s Secret.

2). Analysis:
After studying the case of Revlon Inc’ now we are going to analyze it that what type of strategy they need to follow in the coming years. The Revlon is in troubles in these days and therefore we are going to analyze the external and internal environments of Revlon first then we will suggest with the help of...
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