Revlon Has New Plan for Retail Partners

Revlon Inc. today announced a change to the way it does business with its U.S. retail partners to drive market growth and emphasize mutual success. The terms of trade are effective January 1, 2001. Revlon’s retail trade partners include most of the nation’s leading mass volume retailers and drug chains, as well as thousands of smaller outlets. Revlon products are sold in nearly 30,000 stores nationwide.

“We are changing the way we go to market to build a closer, more mutually beneficial relationship with our trade partners and to exercise the responsibility we have as the category leader to drive market growth for ourselves and our partners,” said Larry Aronson, President of North American sales, customer marketing and business development. “Our new approach clearly encourages more efficient practices and procedures throughout the supply chain and is focused on maximizing sell-through to consumers.” The terms of trade for retailers who stock a full range of Revlon’s cosmetics and beauty care products include the following key provisions:

A New “Wall.” During the next 3 years, Revlon will roll out a new wall system in a phased approach that will begin first with high volume stores and new or remodeled outlets. `

• Retail coverage. Revlon is increasing its coverage to provide more frequent and geographically extensive in-store assistance to retailers.

• Returns. Revlon is providing incentives to retailers to ensure more efficient ordering with the goal of lowering merchandise return rates. These include, among others:

• A new Bonus Program that creates partnerships with retailers to share the cost savings from lower returns. The program will set targets for returns, and if a retailer’s actual returns fall below target the retailer will receive 50% of the cost savings.

• A flat rate allowance for damages which eliminates the need for expensive handling of damage returns.

• A new way of treating Revlon stock keeping unit (SKU) discontinuances. The company will give retailers six-months’ notice of the discontinuation of any SKU so they can begin to reduce inventories. Starting 120 days from discontinuance, Revlon will provide retailers with a 50% markdown for all of the discontinued items they sell. In the event the retailer does not sell all of the discontinued items, Revlon will accept returns at 85% of their list price.

• Market Development Funds. Revlon’s cooperative allowances for retailer promotions will be based on the prior year’s consumer sell-through volume by the retailers at Revlon’s list price, rather than shipments of Revlon products to the retailer. This will provide an incentive for retailers to increase sell-through. Once last year’s sell-through is exceeded, retailers will earn additional market development funds.

• Logistical Efficiency. Revlon will pass on, through price discounts, certain of the cost savings it achieves arising out of varying modes of delivery – warehouse, cross dock or direct store delivery.