Cosmair, Inc.

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Cosmair, Inc.

575 Fifth Avenue
New York, New York 10017
(212) 818-1500
Fax: (212) 984-4056

Private Company
Incorporated: 1953
Employees: Over 3,800
Sales: $1.2 billion
SICs: 2844 Toilet Preparations

Cosmair, Inc. manufactures and markets a wide range of cosmetics, hair preparations, and perfumes as the sole United States licensee of Frances cosmetic mogul, LOréal S.A. It has grown to become a power in the beauty products industry through marketing expertise, research and development, and a vast distribution network. The companys products are widely accepted and can be found in beauty salons, department stores, specialty stores, drug stores, and mass merchandising outlets across the United States.

Cosmair was founded in 1953 as a distributor of LOréal hair styling preparations to American beauty salons. It was formed as a U.S. licensee between Jacques Corrèze, who was Cosmairs chairman for 38 years, and LOréal. Cosmairs 20 employees produced and distributed hair care preparations to U.S. beauty parlors, allowing American women to use the same hair coloring formulas that their French counterparts had utilized since 1907. By the end of the 1960s, Cosmair had firmly established a position in the American market. It began marketing French designer Guy Laroches perfume line in 1966, and in 1967 it became the U.S. licensee for Lancôme, a respected line of color cosmetics, fragrances, sun products, and skin treatments.

Lancôme was initially developed in 1935 by French fragrance merchant Armand Petitjean, who coined the name and the products rose logo after an excursion to ancient Le Chateau de Lancôme in France. The line, known for its quality and elegent packaging, has remained one of Cosmairs strongest divisions. Lancômes product names, printed in both English and French, created a French mystique popular with upscale buyers. In addition, Cosmair rigorously trained its counter salespeople to maintain Lancômes reputation as a competitive, prestigious brand. The salespeople built a broad base of loyal clientele by recommending Lancôme products for specific cosmetic problems and conducting in-store mini-facials to demonstrate the Lancôme product line. Customers were also given samples of skin care and cosmetics as promotional gifts-with-purchase. Lancômes reputation was also enhanced by the opening of the Institut de Beauté in 1977. Based on LOréals original Parisian Instituí founded in 1936, the premier salon provided expert skin applications and treatments. Although Lancôme was unprofitable in America from 1971 to 1978, the division experienced meteoric growth in the following years growing in volume at the rate of 40%-50% a year as reported in Barrons by Gigi Mahon.

In the 1970s Cosmair successfully expanded into a broader segment of the American hair care market, turning to consumers who wanted hair care and hair color mixtures that could be applied at home. The LOréal Hair Care Division debuted a major new product line called Preference with the now famous slogan, Because youre worth it. Preference was heavily advertised and marketed towards potential buyers in food, drug, and large discount stores. Later the brands Excellence and Colorationshair care, permanent wave, and hair colorant supplieswere added and marketed under the Professional Salon group.

LOréal Chairman and CEO Francois Dalle, the well-known French entrepreneur, appointed Lindsay Owen-Jones as President and CEO of Cosmair in 1981. Owen-Jones developed a new vision of growth for Cosmair based on his marketing and strategic acumen, and proved a primary force in shaping the company into the successful organization it is today. Cosmair experienced unprecedented changes in the 1980s, and sales tripled over the course of four years to $600 million by 1984.

The LOréal Cosmetics Division was based on a group of existing products: nail polishes and lipsticks. These soon grew to include a wide range of color cosmetic products, each priced to sell at $6. Anais Anais was formulated in 1981 by another Frenchman, Jean Cacharel, who was attempting to duplicate the fragrance of the scarce Madonna Lily. Another brand, Drakkar Noir, by Guy Laroche, became a top seller in mens fragrances by 1984 with a marketing campaign that targeted younger male consumers via the advertising slogan, Feel the power. Italian stylist Georgio Armanis fragrances were enlisted in 1984, as well as those of chic designer Paloma Picasso, daughter of the famous painter Pablo Picasso.

In 1983 Cosmair staged a coup that dramatically boosted its standing within the industry. As it planned the introduction of a pioneering hair styling foam called mousse, the company bought up the entire supply of customized aerosol cans available in Europe. This move left Cosmair in a very advantageous position six months later when it debuted its Free Hold Styling Mousse, which was eventually named Product of the Year by Fortune magazine. Challengers were prevented from competing in the styling mousse market for several months until the inventories of aerosol cans could be fortified. As a result, by 1985 Cosmair dominated the profitable $150 million U.S. mousse market with 40 percent of the market share.

Cosmair also gained notoriety in 1984 with its purchase of Warner Cosmetics, a subsidiary of Warner Communications, for $146 million. Warner Cosmetics produced cosmetics and fragrances under the brand names of designers Ralph Lauren (Lauren, Chaps, and Polo), Gloria Vanderbilt (Vanderbilt) and Paloma Picasso (Paloma Picasso). The management of both Cosmair and Warner Cosmetics foresaw advantages in the merger. As reported by Catherine Ellis Hunter in Drug & Cosmetics Industry, the gains included international distribution and expert research facilities for Warner, marketing creativity and domestic know-how in fragrance marketing for Cosmair. By 1985 Vanderbilt was the top selling womens fragrance in America.

In 1985 Cosmair brought Frances most successful skin care line, Biotherm, to the United States. International in flair, Biotherms forte was in reputable body, face, and sun commodities displayed in prestigious department and specialty stores. Biotherm products have included Symbiose Naturel, a daily treatment that features a natural mineral enzyme as an anti-aging protectant; Contour Total, a cream or gel to fight cellulite; Bioperfection, a liposome formulated treatment makeup with natural colors; Aqualogic, an emollient designed to aid skin in finding its correct moisture level; and Actif Nuit, an overnight facial skin cream.

Biotherm focused its advertising efforts on women between the ages of 30 and 45 through advertisements in traditional beauty magazines such as Elle, Harpers Bazaar, Glamour, and Vogue. Later on in the decade Cosmair began distributing the brands Biologies 30, 40, and 50, targeted to women of those specific ages. Biotherm also created a club for purchasers, Centre Biotherm. With no purchase required, consumers could sign up at the department store counter to receive newsletters and obtain discounts. Another service, Biotherms Skin Fitness Program, gave consumers private skin consultations, pinpointing skin care problems. In 1992 Cosmair vigorously cut its Biotherm distribution in an attempt to make it more price competitive and, as stated by Biotherms general manager in Womens Wear Daily, to make Biotherm pricing more affordable and appealing to a broader range of clientele.

In 1985 LOréal had a 24 percent market share (in dollars) compared to competitor Clairols 58 percent in the realm of hair coloring. The following year Cosmair debuted the Stu-Stu-Studio product line that allowed purchasers young and old to style their hair anyway they liked it. The product line of spritzes, sprays, styling gels, and mousses was chicly packaged into a virtual styling tool box, as reported in a company brochure. The company also expanded its upscale LOréal cosmetic line into mass-merchandising outlets such as drugstore chains, and set the price 20 to 30 percent higher than the prices of the products of competitors.

To create and promote its numerous new products Cosmair far outspent the industry average; this had a negative impact on profits. According to William Meyers in The New York Times, Cosmairs strong performance notwithstanding, its heavy spending on research, advertising and promotion has kept it from turning in blockbuster profits. Cosmairs advertising and promotion budgets, analysts say, total about $230 million, or 35 percent of sales, higher than the industry norm of about 25 percent. In 1987 the LOréal Cosmetics Division made the decision to cut product distribution by almost 3,500 stores to dconcentrate on major stores and to acquire the significant shelf space needed to install their new modern display system. Sales from 1985 to 1987 fell significantly. The move reduced the importance of promotional activities and refocused on basic business, holding off new-product launches, noted Pat Sloan in Advertising Age.

Cosmair was also troubled by so called knockoff fragrances, as reported in Advertising Age, where the practice of linking a product with an established product marketed by another company became very commonplace in the industry. In 1986 Cosmair had won a temporary restraining order against S.C. Johnson Co. that prohibited the distribution of its new LEn vie shampoos and conditioners. LEn vie, produced by the Agree shampoo and conditioner line, printed Cosmairs Vanderbilt fragrance title on the containers. Cosmair declared trademark infringement and unfair competition as reasons for the court order. Although Johnson claimed to be solely in the shampoo and conditioner selling business, Cosmair charged that its marketing strategies copied those of knockoff-fragrance marketers by printing misleading material on the wrapping. Cosmair also accused Johnson of being intentionally aware of and cashing in on the reputation and goodwill of Cosmairs Vanderbilt brand. The lawsuit was later dropped when both companies agreed on new labeling and ad disclaimers. Rather than inspired by, Johnson was forced to use the phrase, A fragrance similar to Vanderbilt perfume.

Product innovation rebounded from the late 1980s into the early 1990s. The LOréal Cosmetics Division again became profitable in 1988, largely due to the introduction of Lash-Out Lash Extending Mascara. Lash-Out became the number one mascara seller in the United States that year. Other new cosmetic products included such brands as Mattique Illuminating Matte Foundation, Colour Supreme LongWearable Lipstick, Splash Out (a waterproof version of Lash-Out mascara) and Hydra Perfecte Protective Hydrating Makeup.

In fragrances, Glorious was introduced as an offshoot of Vanderbilt in 1987. Paloma Picassos sophisticated bath-fragrance line and designer cosmetics continued to expand with Mousse Hydratante Parfumée, introduced in 1989 as a non-greasy body moisturizing foam scented with the classic Paloma Picasso perfume.

Collaboration between Cosmair and Ralph Lauren also increased in the early 1990s. Ralph Lauren and Cosmair debuted a womans fragrance called Safari in 1990 and a separate division was established in the following year composed entirely of Lauren designer fragrances. In 1991 Polo Crest, a citrus-scented perfume, was introduced for men with a logo patterned after the traditional Lauren crest. Safari for men was debuted in 1992. In hair care, Colorvive Technicare was introduced as Cosmairs premier line for the daily care of color-treated hair. Other innovative hair coloring brands, such as Crescendo, Majirel, and Majiblond, were created under the LOréal Keralogie group. Diacolor, another invention, combined the soft and gentle properties of semi-permanent color with the long-lasting results of permanent hair color, as reported in a company brochure.

The Lancôme Division continued to capitalize on its French mystique, but adapted its message to an American way of life. For instance, the moisturizer TransHydrix was not only to be marketed as an emollient, but also as a guard against skin dehydration. Lancômes leadership in the industry was further strengthened by the introduction of Niosôme Daytime Skin treatment. Poudre, Teint, and Blush Majeur makeup products were also part of the line-up, and in 1991 Lancôme debuted Tresor, a floral-oriental fragrance, which soon became popular in Europe and America.

One of the fastest growing segments in the cosmetic business by 1990 was the so-called anti-aging skin treatment market. In 1987 Cosmair and two other cosmetics firmsShiseido Cosmetics Ltd. and Christian Dior Perfumes Inc.were warned by the Food and Drug Administration (FDA) about their anti-aging skin treatment claims, as reported by a staff reporter for The Wall Street Journal. Cosmairs Lancôme Niosome Systeme Anti-Age Daytime Skin Treatment was pointed out as a violator. The FDA stated that the companies must seek new-drug status for the treatments if they want to keep making certain claims in labelling.

Undaunted by this event, Cosmair introduced an upscale, anti-aging facial treatment and Frances most popular skin care line to America in 1989 under the brand name Plénitude. Plénitude was launched with a $35 million Euro-style ad campaign, designed by Publicis, Paris. As reported in Advertising Age, the brand was released under the slogan, Reduces signs of aging. Plénitude products were primarily distributed through drug stores, mass volume retailers, and combination stores. In 1990 another product was added, Plenitude Action Liposomes, touted as skin care of the future, according to Pat Sloan in Advertising Age. Sales of Plenitude skin care were estimated at $75 million by 1991. As George Klarsfeld, general manager of Cosmairs LOréal cosmetics and fragrance division, said in Advertising Age, Plenitudes success has been attributable to demographic growth of baby-booming women and a very good quality-for-value concept. Oil of Olay, produced by Procter & Gamble Companys Richardson-Vicks subsidiary, is Cosmairs main competitor in this market.

In 1990 Cosmair held 5.6 percent of the U.S. womens fragrance market behind industry leaders Estée Lauder (12.5 percent) and Revlon (11.6 percent). In the mens fragrance category, Cosmair has been listed as the second ranked company with 23.5 percent of market share, trailing only Unilevers 25 percent share of the market. In 1991 Cosmair was the sixth largest marketer of cosmetics in the United States, with $1.1 billion in sales and more than 3,600 personnel employed throughout the United States and Puerto Rico. Sales ending 1992 were estimated at around $1.2 billion. 1992 divisions included 1) the Professional Salon Division, made up of LOréal Technique Professionale and LOréal Professional Salon Products, 2) the LOréal Hair Care Division, 3) the LOréal Cosmetic & Fragrance Division, 4) Lancôme, 5) Biotherm, 6) the European Designer Fragrance Division, 7) the Ralph Lauren Fragrance Division, and 8) Cosmair Caribe, which serves Puerto Rico. The companys laboratories are located in Clark, New Jersey. As reported in 1991 by Steven Greenhouse in The New York Times, the three major stockholders of the privately held company are the Nestle company, with about 70 percent; LOréal, with four percent; and Liliane Bettencourt, daughter of LOréals founder, with 26 percent.

Cosmair, Inc. further solidified its position in the industry on June 21, 1993, with the purchase of Redken Laboratories, one of the worlds largest beauty products companies, with a presence in 36 countries.

As Cosmair faces the future, it has been focusing most of its marketing efforts on cosmetics and fragrances. For instance, as reported by Pat Sloan in Advertising Age, another Ralph Lauren mens fragrance is slated for introduction in spring 1994. With its broad line of profitable perfumes, cosmetics, and hair care products, Cosmair is expected to remain one of Americas most powerful beauty companies well into the 1990s.

Principal Subsidiaries

Gloria Vanderbilt Fragrances; Redken Laboratories.

Further Reading

Born, Pete, Ride em Ralph: Lauren Hits TV Trail for Mens Safari, Womens Wear Daily, August 21, 1992, pp. 1, 5.

Cosmair Inc., Advertising Age, September 28, 1988, p. 62.

Cosmair, Inc., New York: Cosmair Inc., April 1991.

Cosmair Plans to Cut Biotherm Doors, Prizes, Womens Wear Daily, November 16, 1992, p. 32.

Fine, Phyllis, and Vogel, Margaret, Vanitie$, Marketing & Media Decisions, December 1987, pp. 109, 124, 126.

Greenhouse, Steven, LOréal Official Dies After Quitting in Controversy, The New York Times, June 27, 1991, sec. D, p. 9.

Hue & Cry: A Marketing Newsletter, Drug & Cosmetics Industry, July 1985, p. 7.

Hunter, Catherine Ellis, Warner Cosmetics: The Bride Looks Better, Drug & Cosmetics Industry, March 1985, pp. 2629.

Manon, Gigi, Sweet Smell of Success: Meet Cosmetics Executive Lindsay Owen-Jones, Barrons, December 5, 1983, pp. 30, 32, 34.

Making up ground in the mass market: Klarsfeld details how Plenitude broke through, Advertising Age, March 1, 1991, p. 32.

Meyers, William, Cosmair Makes a Name for Itself, The New York Times, May 12, 1985, sec. 3, pp. 1, F25.

Moskowitz, Milton, Robert Levering, and Michael Katz, eds. Everybodys Business, New York: Doubleday, 1990, p. 157.

New President For Cosmair, The New York Times, January 19, 1984, sec. D, p. 2.

The Order Changeth! Drug & Cosmetics Industry, July 1991, p. 14.

Other people moving, Advertising Age, July 15, 1991, p. 28.

Package reduction, Advertising Age, May 13, 1991, p. 50.

Schnorbus, Paula, Vial Strategies, Marketing & Media Decisions, June 1987, pp. 125, 130, 136, 138.

Sloan, Pat, Cosmair eyes new LOréal lines, Advertising Age, September 24, 1984, p. 10.

, Cosmair knocks off suit, Advertising Age, March 31, 1986, p. 6.

, Cosmair suit tries to knock off knockoffs, Advertising Age, March 24, 1986, p. 6.

, Hair-coloring battle to flare: LOréal new products hides roots; bad news for Clairol, Advertising Age, September 21, 1992, p. 4.

, LOréal puts on a new face for skincare launch, Advertising Age, May 15, 1989, pp. 1, 70.

, LOréal banks on rising star, Advertising Age, April 2, 1990, p. 47.

, LOréal cosmetics get big ad push, Advertising Age, April 23, 1990, p. 12.

, Maturing scents: Polo, Aramis prepare to fight young rivals, Advertising Age, October 14, 1991, p. 21.

, Remade Cosmair makes run at Revlon, Advertising Age, February 6, 1984, pp. 4, 56.

, Skincare faces new products, Advertising Age, January 23, 1989, pp. 1, 52.

Three More Concerns Are Warned by FDA On Skin-Care Claims, The Wall Street Journal, April 30, 1987, p. 15.

Kim Tudahl