A stronger Dep introduces upscale skin and hair lines

Drug Store News, Nov 17, 1997 by Peter Malbin

After spending most of 1996 in Chapter 11, Dep, the company that invented styling gels, has emerged stronger and more confident and is introducing two new prestige lines to drug stores: Theorie, a salon-quality hair care line, and Le Systeme Simplified Skin Care treatments.

Dep, the company's value-priced hair care brand, will not appear on the products as the company name. Instead, the new line is being positioned as part of Salon Beaute Labs, a division of Dep.

Rite Aid, Arbor Drugs and Longs are among retailers carrying Le Systeme now, and Theorie has just shipped to CVS and Rite Aid. Longs and Genovese are also carrying the hair care line.

"We've had some verbal commitments from other drug chains. We hope they will be adding the two lines after the first of the year when they reset their schematics," said Bob Berglass, chairman and president of Dep. This is Dep's first major skin care launch, although the company has brought out several skin items in the past.

"As a small manufacturer, we are trying to bring the retailer new profit opportunities by picking up the customer who might go to a department store and a beauty salon for these types of products." he said.

Working women don't have the time to roam the aisles of department stores, Berglass said. "Convenience is very important to them. Drug stores price their merchandise very competitively and offer better value than department stores. They also have a higher level of visitation," Berglass said.

Theorie hair care products retail between $5 and $7, while the equivalent beauty salon product retails for between $8 and $18, Berglass said.

Le Systeme cleansers and toners are priced between $6 and $8, and moisturizers range from $11 to $14.

Retailers will make anywhere from 37 percent to 40-plus percent margins on the two lines, Berglass said. "We have found that mass merchandisers will be pricing their merchandise close to drug stores. No one is going to be killing the category," he said.

The products are being introduced in drug stores with department store panache.

Dep representatives will provide store-level demonstrations of the nine-SKU Le Systeme (three cleansers, two toners and four moisturizers). Rite Aid will be doing close to 1,000 demonstrations in its stores introducing Le Systeme to customers, Berglass said.

In conjunction with the demonstrations, consumers will get a gift-with-purchase, similar to a department store, Berglass said. Customers have to spend $10 on Le Systeme merchandise to get a gift bag containing additional Le Systeme product, valued at $7.

The three-step Le Systeme (cleanse, tone, moisturize) can be merchandised in a display unit that Dep calls a beauty consultant. The unit has an educational wheel, where consumers can "dial up their skin type and find out which products will be compatible," Berglass said.

"Part of the problem in selling skin care is that at retail the consumer just sees this mass display of products. We've tried to make it easy and friendly for the consumer to make a selection without the help of store personnel," he added.

Meanwhile, the 10-SKU salon-quality Theorie hair care line (six styling products, two shampoos and two conditioners) can be displayed on an organizer unit that describes the individual products. Each SKU also has more information on hang tags.

Each Theorie product was also blind-tested by professional stylists against comparable salon products that claimed similar performance, Berglass said. "Theorie was comparable or better."

Le Systeme items contain natural botanical ingredients, are hypoallergenic and have no artificial ingredients. The treatments have been tested by dermatologists, independent laboratories and universities in California.

Dep has been doing cooperative advertising for its two new lines in newspapers and circulars in the various regional markets where the chains' drug stores are located. It also does comparison newspaper and magazine advertising for Le Systeme that contrasts it with Clinique.

Advertising for Theorie and Le Systeme kicked off in September issues of People magazine and will continue through this y ear and 1998. Ads will follow in magazines such as Cosmopolitan, Glamour and Seventeen.