In theSpirit

WWDFRIDAY, MAY 3, 2013 ■ WOMEN’S WEAR DAILY ■ $3.00

The Estée Lauder brand will introduce Modern Muse, its fi rst major women’s fragrance in a decade, in September. The scent is designed as an olfactive ode to the dynamic self-confi dence of the modern woman. Expectations are running high, with industry sources speculating that the volume target is as high as $95 million in retail sales globally for the fi rst full year. For more, see page 6.

SEE PAGE 3

BANGLADESH TRAGEDY

Retailers, GroupsVow Compensation

Beauty Grows at Mass

GLOBAL REACH GOING LUXE

THE BELLEVUE COLLECTION PLOTS A $1.2 BILLION

EXPANSION TO RAISE THE LUXURY QUOTIENT IN SEATTLE.

PAGE 12

AS PROFITS AT ERMENEGILDO ZEGNA RISE 13 PERCENT, THE BRAND PLANS MORE RETAIL EXPANSION. PAGE 2

PHOTO BY JOHN AQUINO; STYLED BY TYLER RESTYSEE PAGE 7

By FAYE BROOKMAN

PALM BEACH, Fla. — With customers returning to mass-market cosmetics departments with open wallets, retailers at the 80th edition of National Association of Chain Drug Stores Annual Meeting charged beauty companies to bring them fresh and relevant items. And, many want assortments custom-ized for their own stores to differentiate them from the competition.

Color cosmetics sales in the mass market are up a healthy 5.4 percent for the fi rst quarter, ended March 30, according to Nielsen data. The catalyst is the nail category, with gains in the high-double digits across some brands.

However, just as clouds threatened to drive pool-side gatherings of high-level execs inside at The Breakers hotel last week, there was fear economic uncertainty could dampen results for the second half of the year. Much of the industry’s success hinges on consumers’ unrelenting interest in nail-care products, coupled with retailers’ ability to achieve sales goals.

To drive that growth, the 60-plus retail companies that attended the meeting — ranging from Wal-Mart to Ulta — asked the 20 beauty companies present for in-novation, support of loyalty programs and items that build basket transactions.

Nails were ubiquitous at the event, including at Revlon’s opening reception, hosted by brand ambas-sador Olivia Wilde, where partygoers were treated to nail-art application, and at the Wet ‘n’ Wild’s suite at

By MAYU SAINI

WHO IS GOING TO PAY and how much?That is among the questions being asked as the

death toll from the collapse of the apparel factory building in Savar, near Dhaka, Bangladesh, rose to 430 on Thursday, with more than 520 injured, out of which 100 amputations have been estimated.

The rest of the rescued workers will also need new jobs, as well as immediate payments. Hundreds of workers are still missing, and eight days after the eight-story building collapsed, bodies are still being recovered from the debris.

The building, Rana Plaza, housed fi ve garment fac-tories, with more than 3,000 workers in the building at the time of the collapse. The incident is being de-scribed by authorities as the worst industrial accident in the garment industry in Bangladesh and the world.

“The total compensation fi gure is likely to be over $30 million in addition to the cost of emergency treat-ment,” the Clean Clothes Campaign said last week, when the death toll was known to be 300.

But a presentation by the Bangladesh Garment Manufacturers & Exports Association earlier this week noted a vastly different number, stating that the amount needed for “compensation, rehabilitation and long-term treatment was estimated at $12 million.” The organization also noted that an amount of 125 million Bangladesh taka, or $1.6 million at current ex-change rates, had already been spent on rescue activi-ties and treatment.

Treatment has been provided free of charge to all of the injured, offi cials said.

Talking about the range of estimates, a senior economist in the government told WWD that would vary widely, depending on who was paying.

“Living standards are experienced in substantially different ways in an emerging economy. On the other hand, the expectation also goes up substantially when the money is coming from a global brand or retailer,” he said, while explaining that although $38 a month, the minimum wage that is paid to the garment workers in Bangladesh, appears paltry, it is substantially higher

WWD.COM

The Breakers, where an excited — and pregnant — Fergie showed off favorite shades from her CenterStage Collection from Wet ‘n’ Wild.

“This is one of my favorite lipstick shades,” said Fergie, grabbing a pink shade called V.I.Pink, which donates a portion of sales to amfAR. “This is also a great item,” she added, pointing her slick polished purple-and-gold talons to her eye primer.

The type of buzz Fergie has delivered to Wet ‘n’ Wild is what top executives said they hope to see across all beauty brands. Bill George, president and chief operating officer of Markwins Beauty, the parent company of Wet ‘n’ Wild, said Fergie was tapped after market research iden-tified her as a celebrity that would resonate with beauty consumers. The partnership has been fortuitous, with Wet ‘n’ Wild volume chalking up more than two years of dou-ble-digit growth.

Some retailers worry the nail business will have a challenge matching gains accrued in the last year, but suppliers said the category is here to stay and won’t fizzle out, as it did after the Chanel Vamp craze.

Retailers who stopped by Sinful said the company showed that the nail busi-ness is on fire. To feed de-mand for shiny, gel-like nail colors, SinfulColors is adding SinfulShine Gel Polish in 32 shades at Walgreens. The com-pany is transitioning to a new name, called Global Value Brands, to bring Pure Ice and Sinful under one umbrella.

Manufacturers insist the gel technology is still in its infancy. Sources at the meet-ing said more launches are in the pipeline, including an entry from Essie. Their only fear is an influx of inferior products that could tarnish the experience.

Staying on top of technol-ogy and educating women about how to use gels properly to remove any “barriers to use” is the message from Red Carpet Manicure. The company be-lieves gel polish could eventually hit 50 percent of sales, especially since gels are now 55 percent of salon business. Red Carpet also is adding two treatment prod-ucts to address damage, one is LED-cured.

The healthy state of at-home gels was echoed at Pacific World, makers of

SensatioNail. “Nail polish is still driv-ing cosmetics and gels are helping drive nail,” said Joel Carden, executive vice president at Pacific World, who noted gels are 8 percent of nail polish sales, on a path to hit 10 percent by yearend.

Harvey Alstodt, president of MBA Beauty Inc., however, thinks there is a portion of women looking for more natural options. To that end, he’s of-fering WaterWorks, a water-based nail color. That’s one of several innovative items he showed at the meeting, along with Tweets, a tween nail color carried

by Wal-Mart and New York’s upscale Zitomer, and a treatment assortment called Dr. Marvey. “I don’t want to be a ‘me too’ company,” said Alstodt.

No matter what the nail product, re-tailers hope the frenzy continues since most have allocated major real estate to nail. CVS Pharmacy has more than 2,000 Nail HQ departments, Rite Aid has a large nail area and Wal-Mart’s new pla-

nogram features a huge commitment to nails, including treatment, gels and color.

The desire to offer something differ-ent was a mantra. Target will test NYX in 100 doors, as well as “brand agnostic” beauty advisors in 150 doors. Attendees identified NYX as an example of a beau-ty company with out-of-the-box ideas, such as an eyeliner called The Curve in a creative elliptical shape that makes it easier to apply than traditional pencils.

Offering value while also encourag-ing shoppers to trade up to higher price points or multiple items was a theme.

First-time annual meet-ing attendee E.l.f. Cosmetics showed how its breadth of assortment offers more than just “one size fits all,” said Shawn Haynes, the brand’s vice president of sales. With its traditional Essentials ($2 and under), E.l.f. encour-ages shoppers to place mul-tiple items in their basket. It also works to trade up shop-pers with its Studio collec-tion (priced at $6 a product), which is growing in chains such as Walgreens.

With much of the action in value pricing, Physicians Formula focused on its unique positioning. Now owned by Markwins, Physicians Formula is the “fastest-growing premi-um makeup” in mass, accord-ing to chief executive officer Ingrid Jackel, who said team-ing up with Markwins has been a good fit since its major brand, Wet ‘n’ Wild, is at the opposite end of the price spectrum.

The company also ham-mered home its “healthy” brand characteristics, which Jackel said hit a sweet spot with consumers. Physicians’ BB assortment of a cream, powder and concealer has de-livered “incremental” volume and has not cannibalized from existing items in Physicians’ lineup, Jackel said. “We re-cently launched in France and it has been a very good expe-rience because it encouraged us to get back to our roots and realize who we are,” she said.

As retailers look for their own fit in the market, they are calling on suppli-ers to give them exclusives, be it prod-ucts, displays or promotions. As an example, Chris McClain, president of Advanced Beauty Labs, said the com-pany’s Bodycology line has 16 scents, but that not all of them are in all retailers. “We’re able to segment and target store clusters,” he said.

In his presentation to suppliers on how to sell dollar stores, Family Dollar president Mike Bloom discussed the need for products customized to the value proposition at his growing chain.

The desire for customization stems from better use of consumer data gleaned through loyalty programs, said Wendy Liebmann, founder and ceo of WSL Strategic Retail.

“Prior to now, retailers never knew beyond the transaction what the consum-er was doing. Now they know. It’s about what the consumer is buying — and what else they’re buying,” she said. In meet-ings with suppliers, Walgreens talked up its growing loyalty program. CVS’ pro-gram is already well established and has a powerful beauty following.

This year’s meeting attracted high-lev-el speakers and entertainment, ranging from Pat Benatar and Michael McDonald at NACDS events, and Nicole Scherzinger and Train at corporate brand functions. Jody Pinson, the new vice president, merchandising of beauty for Wal-Mart, praised the efficiency of seeing so many beauty suppliers in just four days.

The meeting was a final opportunity for NACDS to tout its upcoming Total Store Expo, which melds Marketplace, Logistics and Pharmacy into one huge show. “We are definitely supporting it and NACDS,” said Pacific World’s Carden. The meeting kicks off in Las Vegas on Aug. 10.

7WWD FRIDAY, MAY 3, 2013

Fom left to right: Revlon’s Jamie Bernt, Joanne Santos, John Harrington, Simon Worraker, Julia Goldin, Chris Elshaw, Donna Baird, John Collier, Jon Levin and Dino De Iuliis.

E.l.f. Cosmetics’ vice president of sales Shawn Haynes and cofounder and chief executive officer Joey Shamah.

Markwins Beauty founder and chief executive officer Eric Chen and Fergie.

Talk of Nail Trends, Value Dominate NACDS{Continued from page one}

n Appliances Buzzing: Borrowing a page from Clarisonic and using its appliance knowledge, Conair is bringing out True Glow, a sonic skin-care tool priced under $100. Harvey Alstodt, president of MBA Beauty Inc., is distributing the skin-care device Tanda, which tar-gets discoloration and fine lines. Retailers agreed consumers are ready to buy these appliances at mass stores. n Yarnell Returns to Beauty: Lisa Yarnell is back in the business and attended the meeting on be-half of Continental Consumer Products, makers of Salon Grafix, which has repackaged and is primed for new launches. n Fragrance Redux: With color re-bounding, retailers hope fra-grance is next. Joel Ronkin, executive vice president and gen-eral manager in North America for Elizabeth Arden Inc., said al-most every major retailer is mak-ing huge strides to adopt open-sell environments and to add testers. “Consumers are returning to the category,” he said, adding prestige is already up nicely. n P&G Innovation Studio: Once again, the Procter & Gamble Co. offered a respite from the sun and work in its studio with free shaves for men, makeovers for women and reflexology for all. The company also showed its health and beauty innovations, including Olay Fresh Effects and Cover Girl Clump Crusher mascara, which one re-tailer deemed the fastest-selling item in the store. n Gavel Exchange: Outgoing NACDS chairman Greg Wasson, presi-dent and chief executive officer of Walgreen Co., handed over the gavel to Robert J. Narveson, president and ceo of Thrifty White Pharmacy.n Olivia Wilde Gets Excited: Revlon am-bassador Olivia Wilde admitted it is “surreal” when she sees her image in the drugstore and said even as a little girl she loved going to drug-stores and playing with makeup. “It is an honor to catch a glimpse of my mug in your stores,” she said.

Heard at NACDS Annual...

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