Hair News - January 2004

Hair News For January 5, 2004

ACQUISITIONS BY HENKEL MAY SPARK MORE MOVEMENT IN HOUSEHOLD, COSMETIC & TOILETRY MARKETS

LITTLE FALLS, NJ, January 5, 2004 - In the course of two weeks, The Henkel Group has announced major acquisitions in two of its core business areas. Both moves by the German consumer products marketer significantly enhance its U.S. position and could stimulate additional activity in the new year.

On December 15, Henkel announced that it had agreed to purchase Scottsdale, Arizona-based Dial Corp. for $2.9 billion. A week later, Henkel acquired cosmetics and hair care products marketer Advanced Research Laboratories (ARL), headquartered in Costa Mesa, California.

"It should be interesting to see what will happen next, and how Henkel's competitors will react," says Lenka Contreras, group director of the Consumer Products Practice for Kline & Company. "There are other acquisition candidates out there that are ripe for the picking, and Henkel has definitely shaken the tree."

Henkel's purchase of Dial gives the Duesseldorf-based company a foothold in the U.S. household cleaning products market with a portfolio of well established brands. Dial's home care products business in the U.S. accounts for about $500 million at the manufacturer level and ranks sixth in this market, according to Kline's HOUSEHOLD CLEANING PRODUCTS USA market study.

Dial's Purex laundry detergent business has experienced double-digit growth over the past few years, while sales for many of its competitors have been relatively flat. The brand's value positioning has pushed it into the first runner-up slot, just behind Procter & Gamble's Tide.

By acquiring ARL, Henkel expects to grab the third position in the U.S. hairstyling products market--behind Procter & Gamble and Unilever--according to a statement it released announcing the acquisition. Kline's market study COSMETICS & TOILETRIES USA pegs ARL's U.S. sales at almost $70 million in 2002, led by the popular Got2B hair styling brand. Henkel says it will combine the ARL business with the company's Schwarzkopf & Dep subsidiary, which is also based in California.

Dial also competes in the personal cleansing market and will broaden Henkel's cosmetics and toiletries offerings in the U.S. even further. Together, Dial and ARL should augment Schwarzkopf & Dep's sales to exceed $600 million, coming mostly from soap and hair care products, according to figures from Kline's COSMETICS & TOILETRIES USA market study.

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The acquisitions will likely push Henkel into the top 10 of the U.S. cosmetics and toiletries market. Dial ranked sixteenth in 2002, and Dep was ranked in the twenties, with ARL in the mid-forties.

"These moves address a critical need for Henkel," says Contreras. "They will give the company a boost in facing off with competitors like Procter & Gamble, Reckitt Benckiser, and Unilever. And they will likely create more M&A activity in the market."

The next move may again be Henkel's. In its announcement, Henkel said it expects to sell a significant part of its minority interest in Clorox Co., Ecolab, or both of these U.S.-based companies in order to focus on its own brands and wholly owned subsidiaries.

Established in 1959, Kline & Company (www.klinegroup.com) is a business consulting and market research firm serving clients worldwide in the cosmetics and toiletries, household cleaning products, and other consumer products sectors. Its expertise extends to merger and acquisition screening, competitive intelligence assessments, and strategic analysis.

or more information, contact Lenka Contreras at +1-973-435-3407. In Europe, contact Jonathan Duff at +32-2 776 0738.

Hair News For January 10, 2004

Takara Belmont Introduces Online Color Configurator

Current and future salon owners can be in the pink, red, black or whatever color they want...instantly...with the Takara Belmont customized online color configurator.  With just a few clicks you can become a world class interior decorator.

Takara Belmont not only allows salon owners to instantly custom their salon and spa furniture, they promise fast delivery to boot.  In two weeks or less, to be precise, Takara Belmont allows you to select from five main colors and five accent colors to get a total of 25 possible variations.  Design your new salon or spa look with Custom Express from Takara Belmont.

Visit Takara Belmont to get all the details on how to use the Custom Express color configurator.

Hair News For January 21, 2004

NEW YORK, Jan 21 (Reuters) - Regis Corp. (nyse: RGS - news - people), the world's largest hair salon owner and franchiser, on Wednesday said its quarterly profit rose on strong retail product sales.

Regis, which operates about 9,775 salons under its own name and the Supercuts, Vidal Sassoon and Jean Louis David banners, said net income in the fiscal second quarter ended Dec. 31 rose to $27.7 million, or 60 cents per share, from $23.6 million, or 52 cents per share.

On Jan. 8, Regis said its earnings would beat the upper end of its prior forecast of 54 cents to 56 cents a share.

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