NEW YORK--(BUSINESS WIRE)--The Estée Lauder Companies Inc. (NYSE:EL) announced today that it would close the global wholesale distribution of its Prescriptives brand by January 31, 2010. The brand plans to continue to sell online for United States shipping at www.prescriptives.com to help service consumers for replenishment of key products, while inventory lasts. Prescriptives products are currently sold in the United States, Canada, the United Kingdom, Ireland and Australia.
A core component of The Estée Lauder Companies’ corporate strategy is to evaluate, and where possible, turn around underperforming brands with the goal of improving return on investment. After a thorough analysis of the Prescriptives brand, management concluded that the brand’s long term business model is no longer viable given the current market environment. The Company is committed to placing as many impacted employees as possible in open positions within the Company.
“We believe that the difficult decision relating to Prescriptives will allow us to redirect our resources to key strategic imperatives where we see the highest growth potential,” said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies. “Ultimately this action allows us to focus on those areas which we expect to benefit the Company, our shareholders and business partners. We intend to work closely with our retail partners and continue to communicate with our consumers to ensure a seamless transition.”
For Prescriptives consumer support, toll free numbers have been set up in North America (1-877-819-2968, English, Spanish and French speaking), the United Kingdom (0800 088 4168) and the Republic of Ireland (1800 936 080).
The Company’s previously disclosed estimated ranges for fiscal 2010 net sales and earnings per share, before charges associated with restructuring activities, remain unchanged as a result of this business decision. The Company also expects to take charges associated with restructuring activities of between $35 million to $40 million in connection with this action. These charges are within the range of overall charges the Company previously estimated it would take in fiscal 2010 in connection with its long-term strategic plan. The recording of charges will depend on when decisions are made and the relevant accounting criteria are met. Such charges are not included in the Company’s fiscal 2010 earnings per share projections for the first quarter or the full year.
The forward-looking statements in this press release, including those in Mr. Freda’s remarks and those relating to the financial impact, involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-looking statements include current economic and other conditions in the global marketplace, actions by retailers and consumers, competition, the Company’s ability to successfully implement its long-term strategic plan, including the changes in the distribution of Prescriptives, and those described in the Company’s annual report on Form 10-K for the year ended June 30, 2009.
The Estée Lauder Companies Inc. is one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The Company’s products are sold in over 140 countries and territories under the following brand names: Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, M•A•C, Bobbi Brown, Tommy Hilfiger, Kiton, La Mer, Donna Karan, Aveda, Jo Malone, Bumble and bumble, Darphin, Michael Kors, American Beauty, Flirt!, Good Skin™, Grassroots Research Labs, Sean John, Missoni, Daisy Fuentes, Tom Ford, Coach and Ojon.
An electronic version of this release can be found at the Company’s Website, www.elcompanies.com.