Talbots Sold for $369 Million
Sycamore is buying the struggling women’s retailer for $193.3 million in cash. If you include net debt, the transaction has a total value of $369 million. The deal will be closed in the third quarter. This will give shareholders $2.75 a share which is less than the #3.05 a share that was offered by a private equity firm. The $2.75 is still significantly more than the closing price of Talbots’ stock, which was $1.29 a share. Talbot’s president said, “Sycamore Partners is a strong investor with substantial resources and expertise, and we look forward to operating as a private company under their ownership.” Stefan Kaluzny, president, plans to step down at Talbots on June 30.
Revlon is Returning to the Glory Days
Revlon is ready to return to the leadership position in the beauty industry. Revlon is not relying only on its existing marketing tools. Instead, the company will focus on its current strength in the industry. Up until 2007 Revlon experienced a 15 year stretch of negative cash flow. In 2008, the company buckled down which included a 20 percent reduction in people and a fact-based strategy for spending. According to Revlon president and CEO Alan Ennis, “And Revlon has stuck to its guns. We have kept our costs down. We now have a 25 percent operating income margin. And it may not be a big number for some of the big boys and girls in the room, but over the last four years, we’ve generated $250 million of positive cash flow. So after 15 years of burning cash, we generated positive cash flow.” Revlon sees much opportunity overseas in China and all over Asia. The company hopes to see more manufacturing return to the United States since regulations are becoming standard across the industry. “We are all striving to produce high-quality products at affordable prices that are safe for the consumer and that work.”
Star Scents Shine at Macy’s
Macy’s has taken the leader among department stores in selling celebrity fragrances. This increase in celebrity fragrances has changed the dynamic of the store. The celebrity scents take up 10 percent of the fragrance business, compared to 4 percent at other retailers. Macy’s started to notice the power of celebrity endorsement and teen idols when 12 year olds were sleeping outside its stores. With the great increase in sales from Justin Bieber’s fragrance, it didn’t pull from the other core fragrances sold at Macy’s stores.
Macy’s is looking forward to attracting new customers when it launches Lady Gaga and Nicki Minaj fragrances in the fall. Macy’s is trying to keep learning how to talk to the young. Macy’s Facebook has over 5 million fans. “We are definitely increasing our marketing spend in the social space — in the digital space — in a big way,” said Muriel Gonzalez, Macy’s Inc.’s executive vice president and general merchandise manager of cosmetics, fragrances and shoes.
– Katie Schmitz
Source & Photo: WWDSee the Top Ten Summer 2016 Trends for Women Over 40
Tags: Justin Bieberâ€™s fragrance, Lady Gaga fragrance, Macy's celebrity fragrances, Macy's INC, Muriel Gonzalez, Nicki Minaj fragrance, Revlon president and chief executive officer Alan Ennis, Revlon returns to glory days, Stefan Kaluzny, Sycamore buys Talbots, Talbots Being Sold for $369 Million