A Strategic Point of View
have been changing and adapting, and the
signs are positive.
A Stylish Comeback in France
Another indicator—albeit a small one—of
better times, perhaps, is the fact that hairstyling products have been making a modest comeback in the French mass market.
Franck Provost is adding value to mass market
hair care in France.
expansion route beyond prestige fragrance?
Either way, Philosophy’s previous owners,
the private equity firm Carlyle, must be very
pleased with life.
Strategic point: wonder who else in
mass nails may think about backing up into
the (small) professional channel to gain
fashion trickle down?
Interesting, too, to note in passing how
Dr Scheller’s previous owners, Russian
company Kalina, has effectively acted like a
private equity business in that it only acquired Scheller’s Manhattan in 2007 and,
having stripped out excess costs, has lost
little time in selling it on to Coty. Was this
the Russians’intention all along, or was it a
case of needs must, or just opportunism?
Walmart’s Comfort Zone
We listened to an interesting conference
call the other day organized by banking
giant UBS, which seems to have a firm
grasp of our industry. The subject was all
about how Walmart has been deftly row-
ing back from what Bentonville appar-
ently called Project Impact. This was a
strategic initiative started in 2007, which
involved among other things moving
away from Every Day Low Pricing
(EDLP) toward multiple pricing, giving
more emphasis to Walmart’s own brands,
prioritizing certain specific categories,
and moving some merchandising initia-
tives from local store management to the
center. It seems that Walmart has decided
to move back to its comfort zone, win-
ning back lower income shoppers with
good old EDLP and, inevitably, piling
more margin pressure on suppliers.
As Schlecker Branches Out
If Walmart has returned to its comfort zone,
Europe’s largest drugstore chain, Ger-
The last couple of years have tended to be
all about value-for-money products, but re-
cently the market has seen the re-emer-
gence of added value lines such as those
promoted by Franck Provost, L’Oréal’s hair
Shampoo Pricing - UK, November 2010
Coty Splashes Out
At the time of writing, it looks as if privately
owned Coty is about to splash out on three
separate acquisition deals. In these difficult
times, it’s certainly a positive sign when a
major player is sufficiently confident to put
its money where its mouth is. The logic of
Coty’s three deals seems reasonably clear.
Get more critical mass in the core category
of its mass division in Germany by buying
Dr Scheller’s Manhattan nails and makeup.
Move into high-end nails with OPI in the
U.S., where professional nails are (sort of)
akin to professional hair, in that it tends to
represent the fashion end of the category.
And make a move into prestige skin
care—although one has to ask whether
U.S.-based Philosophy is a sufficiently distinctive franchise to provide a meaningful
John Frieda Sheer Blonde
Head & Shoulders
* “2 for” promotional offer