Tue Dec 31, 2013 12:06pm EST
<span id="articleText"/>* Says will cut over 1,000 jobs, primarily in China
<span id="midArticle_0"/>* Expects annual savings of about $11 mln from the restructuring
<span id="midArticle_1"/>* To take about $22 mln of pretax charges
<span id="midArticle_2"/>By Maria Ajit Thomas and Phil Wahba
<span id="midArticle_3"/>Dec 31 (Reuters) - Revlon Inc said it would exit China, where sales of its cosmetics have been falling, and cut more than 1,000 jobs as part of a restructuring designed to save about $11 million a year.
<span id="midArticle_4"/>Revlon, owner of the Almay cosmetics brand and Sinful Colors nail polish, said in a filing that its Chinese operations accounted for about 2 percent of total net sales. The company posted net sales of $1.43 billion in 2012.
<span id="midArticle_5"/>Revlon said it would cut 1,100 positions, primarily in China, including 940 beauty advisers retained through a third-party agency. Revlon had 5,100 employees as of Dec. 31, 2012.
<span id="midArticle_6"/>The company's shares, which have risen nearly 70 percent this year, fell marginally on the New York Stock Exchange.
<span id="midArticle_7"/>The Chinese market is full of potential for Western brands. The Chinese cosmetics market more than doubled in size between 2008 and 2012 to $22.8 billion, according to a report in March by Fung Group that cited the National Bureau of Statistics in China. ()
<span id="midArticle_8"/>That has been a boon for companies such as high-end beauty products maker Estee Lauder Cos Inc, whose sales in Asia last quarter rose 7 percent, helped mostly by China, where Estee Lauder has expanded to second-tier cities more quickly than many other Western beauty brands.
<span id="midArticle_9"/>Other, non-beauty, U.S. companies to see fast growth in China include handbag maker Coach Inc and Tiffany & Co .
<span id="midArticle_10"/><span id="midArticle_11"/>FALLING CHINA SALES
<span id="midArticle_12"/>But China is also a complex market that can bedevil foreign companies.
<span id="midArticle_13"/>Avon Products Inc, a direct seller of cosmetics, saw sales fall 24 percent in 2012 in China, where its reputation has been hit by a bribery probe, and where it has struggled to adapt to selling through retail stores.
<span id="midArticle_14"/>Revlon's sales in China declined in 2012, a trend that continued into the first half of this year. The company, which entered the market in 1996, has attributed the fall to declining consumption linked to a slowdown in Chinese economic growth.
<span id="midArticle_15"/>"We made a holistic assessment of the opportunity in China versus the cost of doing business there and we concluded that it made the most sense to exit the market," Revlon spokeswoman Elise Garofalo said.
<span id="midArticle_0"/>According to the National Bureau of Statistics of China, total retail sales of cosmetics grew 13.2 percent in the January-November period, compared with growth of 17 percent in the whole of 2012. ()
<span id="midArticle_1"/>Some cosmetics companies operating in China have also faced pressure from animal rights groups, as the country requires companies to test beauty products on animals.
<span id="midArticle_2"/>The China Food and Drug Administration said in November it was considering a rule change that would allow the sale of some cosmetics without requiring them to be tested on animals.
<span id="midArticle_3"/>Revlon, owned by buyout titan Ronald Perelman, expects to incur about $22 million of pretax restructuring and related charges.
<span id="midArticle_4"/>About $10 million of the charges will be employee-related costs, with the rest from sales markdowns and inventory write-offs, the company said on Tuesday.
<span id="midArticle_5"/>Revlon said it recorded $20.9 million of the charges in December 2013, with the rest expected during 2014.
<span id="midArticle_6"/>The company said about $8 million of the annual savings are expected to benefit 2014 results.
<span id="midArticle_7"/>The company's shares were down 0.2 percent at $24.50 in afternoon trading.
<span id="midArticle_8"/>
<span id="articleText"/>* Says will cut over 1,000 jobs, primarily in China
<span id="midArticle_0"/>* Expects annual savings of about $11 mln from the restructuring
<span id="midArticle_1"/>* To take about $22 mln of pretax charges
<span id="midArticle_2"/>By Maria Ajit Thomas and Phil Wahba
<span id="midArticle_3"/>Dec 31 (Reuters) - Revlon Inc said it would exit China, where sales of its cosmetics have been falling, and cut more than 1,000 jobs as part of a restructuring designed to save about $11 million a year.
<span id="midArticle_4"/>Revlon, owner of the Almay cosmetics brand and Sinful Colors nail polish, said in a filing that its Chinese operations accounted for about 2 percent of total net sales. The company posted net sales of $1.43 billion in 2012.
<span id="midArticle_5"/>Revlon said it would cut 1,100 positions, primarily in China, including 940 beauty advisers retained through a third-party agency. Revlon had 5,100 employees as of Dec. 31, 2012.
<span id="midArticle_6"/>The company's shares, which have risen nearly 70 percent this year, fell marginally on the New York Stock Exchange.
<span id="midArticle_7"/>The Chinese market is full of potential for Western brands. The Chinese cosmetics market more than doubled in size between 2008 and 2012 to $22.8 billion, according to a report in March by Fung Group that cited the National Bureau of Statistics in China. ()
<span id="midArticle_8"/>That has been a boon for companies such as high-end beauty products maker Estee Lauder Cos Inc, whose sales in Asia last quarter rose 7 percent, helped mostly by China, where Estee Lauder has expanded to second-tier cities more quickly than many other Western beauty brands.
<span id="midArticle_9"/>Other, non-beauty, U.S. companies to see fast growth in China include handbag maker Coach Inc and Tiffany & Co .
<span id="midArticle_10"/><span id="midArticle_11"/>FALLING CHINA SALES
<span id="midArticle_12"/>But China is also a complex market that can bedevil foreign companies.
<span id="midArticle_13"/>Avon Products Inc, a direct seller of cosmetics, saw sales fall 24 percent in 2012 in China, where its reputation has been hit by a bribery probe, and where it has struggled to adapt to selling through retail stores.
<span id="midArticle_14"/>Revlon's sales in China declined in 2012, a trend that continued into the first half of this year. The company, which entered the market in 1996, has attributed the fall to declining consumption linked to a slowdown in Chinese economic growth.
<span id="midArticle_15"/>"We made a holistic assessment of the opportunity in China versus the cost of doing business there and we concluded that it made the most sense to exit the market," Revlon spokeswoman Elise Garofalo said.
<span id="midArticle_0"/>According to the National Bureau of Statistics of China, total retail sales of cosmetics grew 13.2 percent in the January-November period, compared with growth of 17 percent in the whole of 2012. ()
<span id="midArticle_1"/>Some cosmetics companies operating in China have also faced pressure from animal rights groups, as the country requires companies to test beauty products on animals.
<span id="midArticle_2"/>The China Food and Drug Administration said in November it was considering a rule change that would allow the sale of some cosmetics without requiring them to be tested on animals.
<span id="midArticle_3"/>Revlon, owned by buyout titan Ronald Perelman, expects to incur about $22 million of pretax restructuring and related charges.
<span id="midArticle_4"/>About $10 million of the charges will be employee-related costs, with the rest from sales markdowns and inventory write-offs, the company said on Tuesday.
<span id="midArticle_5"/>Revlon said it recorded $20.9 million of the charges in December 2013, with the rest expected during 2014.
<span id="midArticle_6"/>The company said about $8 million of the annual savings are expected to benefit 2014 results.
<span id="midArticle_7"/>The company's shares were down 0.2 percent at $24.50 in afternoon trading.
<span id="midArticle_8"/>
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