Private Sector; A Shaker, Not a Stirrer, at Revlon

ON Day 50 of his life as a chief executive, Jack L. Stahl of Revlon was spending much of his time on a drugstore floor, stacking lipsticks and eye shadow into a new display case he had just assembled.

That April morning, Mr. Stahl and a volunteer army of 250 Revlon employees had fanned out across Manhattan to outfit drugstores with shiny new showcases designed to grab customers' attention. The employees' shirts predicted victory: ''Revlon Takes Manhattan.''

It was an unusually aggressive and expensive campaign for a debt-ridden company stuck in a defensive mode in recent years.

Before Mr. Stahl became chief executive in February, Revlon had focused on cutting losses and costs. Now Mr. Stahl, a former No. 2 at the Coca-Cola Company, says Revlon is past pruning and ready to grow.

''Revlon has a name. It is right now bigger than the business,'' Mr. Stahl said in October in a conference call with securities analysts. ''Our strategy is to make the business as big as the name.''

With only about $59 million in cash and $32 million in unused credit as of Sept. 30, Revlon is spending close to $70 million on display cases, up from $44 million last year, and ''significantly'' more on marketing. In its showiest move, Revlon has created a color collection tied to the James Bond films, notably the latest release, ''Die Another Day,'' which opened on Nov. 22 nationwide. Halle Berry, a Revlon spokeswoman, is a star of the film.

That adds up to a sizable gamble for a business saddled with $1.7 billion in debt and projected interest payments of $156 million this year. Revlon's majority owner, Ronald O. Perelman, has promised to advance Revlon $40 million if necessary, but the company ran that much of a cash deficit in its third quarter alone. Moreover, with no contract binding him to supply the money, Mr. Perelman may leave Revlon to fend for itself in bankruptcy court. Credit analysts warn that Revlon could default in the first quarter of 2003.

But Mr. Stahl has evidently concluded that running risks may be the only way to reverse 16 consecutive quarters of losses and to reclaim market share lost to L'Oréal and Procter & Gamble, which makes the Cover Girl and Max Factor brands.

Mr. Stahl declined to be interviewed, saying through a spokeswoman that he wanted to focus on Revlon instead of himself.

Nevertheless, Mr. Stahl, 49, has tied his fortunes to Revlon's, and the risks he takes with the company could well determine his legacy. He has put himself at the command of Mr. Perelman, who has proved to be controlling and fickle: Mr. Perelman dismissed each of Revlon's last two chief executives in scarcely two years. While pleasing Mr. Perelman, Mr. Stahl must balance Revlon's responsibility to save cash and pay debts, and its competing need to pay for developing and marketing new products. Failure would undermine the reputation that Mr. Stahl built at Coca-Cola during his 21 years there.

At Coke, Mr. Stahl once was on a path to the chief executive suite. He had been named chief financial officer at 36, the youngest person to hold that position at the company. A few years later, he became president of its North America group, responsible for 30 percent of the company's sales and 20 percent of its profits. During Mr. Stahl's six-year reign, the unit's market share increased to 45 percent from 40 percent, and its average annual growth rate tripled.

He became Coca-Cola's president and chief operating officer in 2000 but left in March 2001 in a shake-up. It is unclear whether Mr. Stahl quit or was pushed, but he and Douglas Daft, the chief executive, had different visions for the company.

In February 2002, the news that Mr. Stahl would join Revlon momentarily raised the ailing company's stock price -- and many eyebrows.

Here was a manager who almost certainly had his pick of positions. Furthermore, Coca-Cola had given him $3.5 million in severance and other benefits, so he did not need the work. Nonetheless, he chose to lead a company that others might have considered a losing proposition.

''My first reaction was, 'This is a very talented guy who is moving into a story that is kind of dicey, and I don't know why,' '' said George S. Chalhoub, an analyst at Deutsche Bank. ''It seems he was attracted by the challenge of Revlon. He seems to be very keen on going in and turning the story around.''

As a start, he expanded the rejuvenation of display cases to drugstores nationwide. He carried out the Bond promotion. He lured top executives from Clairol and Coca-Cola and created a management structure more like the decentralized organization he set up while No. 2 at Coke. He began writing a weekly employee newsletter and said he wanted Revlon on lists of the top 100 companies for employees.

''My impression is he's made it quite clear to the people in the organization that they have a lot to accomplish,'' said Gary Charboneau, senior vice president for sales and marketing at Duane Reade, a leading New York area drugstore chain. ''You see a change in attitude among Revlon's people, in how they're responding.''

Mr. Charboneau added: ''Jack absolutely has a presence about him. He has the ability to let you know that you're dealing with someone who's making decisions.''

Mr. Stahl has impressed others by how hard he has worked to understand the company. He has shadowed market researchers into consumers' homes to chat about the brand and made a splash at the annual meeting of the National Association of Chain Drug Stores by seeking advice from seemingly everyone.

Suzanne Grayson, a marketing consultant who worked for Revlon in the 1960's and 70's, sat beside Mr. Stahl at an industry dinner in October. ''He wasn't interested in talking about himself; he was interested in learning,'' Mrs. Grayson said. ''He seemed to be quite interested in what Revlon was like and what made it great and what did I think was missing now.''

She told him to capitalize on Revlon's famous brand with new cosmetics. ''The most important thing Jack can do is put on lipstick,'' she said with a laugh. ''Get into product.''

Revlon is already achieving promising market-share numbers based largely on its 007 Color Collection. Figures from Information Resources Inc. show that Revlon market share in the four weeks ended Nov. 3 rose to 23 percent, from 21 percent a year earlier, putting it ahead of P.& G., which fell to 21 percent from 25 percent, but behind L'Oréal, which remained at 33 percent.

''This is the first month in years that they've really had an increase in market share,'' Mr. Chalhoub said.

In a good omen for Revlon's 007 products, ''Die Another Day'' had the best opening weekend of all 20 Bond films. But Revlon's gains in market share may not offset the money spent promoting the Bond collection.

Whether it sells or bombs, the agent held responsible will be Stahl, Jack Stahl.