When Revlon acquired Elizabeth Arden in September, many wondered if the two would operate separately or if they would come together and streamline as one mega company. While it strengthens the brand’s global reach and sales almost immediately, the addition does pose a problem.
Synergy between both brands isn’t impossible. That plan would cost a substantial amount of money in the neighborhood of $140 million annually. Rather, Revlon is looking to integrate with Elizabeth Arden, a process that could reach $75 million by the time it concludes in 2020.
“As we look at the synergies that we have, there are countries where we are both strong: the U.S., the U.K. and South Africa. Then you have a bucket of countries where Elizabeth Arden is strong and we are not as strong: South Korea and China,” stated Revlon chief executive officer, Fabian Garcia. “Then you have another bucket of countries where we are strong and they are not as strong: Japan.”
When broken down, between $40 and $50 million will be required for employee-related expenses like severances and retention stemming from the estimated 350 positions expected to be cut globally. Another $15 million will be needed for lease terminations with $10 million more for other assorted charges.
“Today Revlon Inc. filed with the SEC a Form 8-K disclosing required information related to implementing certain restructuring activities associated with integrating the Elizabeth Arden and Revlon organizations. The filing discloses the expected charges associated with these restructuring activities and the number of employees that are expected to be affected by the integration plan over the next [three] years. The 8-K also discloses certain information regarding the previously disclosed expected realization of synergies and cost reductions. Among other things, the company disclosed that it expects to significantly exceed the previously disclosed $140 million in annualized synergies and cost reductions,” according to a statement from a Revlon spokeswoman.
News of integration comes following Revlon’s announcement of new global brand ambassador, Gwen Stefani. That and the brand’s initial $3 billion sales projection provide a lot of high hopes for the beauty brand at the start of the new year.