Kimberly-Clark vows to keep up advertising spend

by Anna Clarke, Brand Republic 24-Apr-01

Domestic goods giant Kimberly-Clark has sworn to keep up its advertising spend and new product development, in a effort to claw marketshare away from struggling rivals.

LONDON (Brand Republic) - Domestic goods giant Kimberly-Clark has sworn to keep up its advertising spend and new product development, in a effort to claw marketshare away from struggling rivals.

Despite strong sales growth, the maker of Kleenex tissues, Huggies nappies and Andrex toilet tissue has been hit by a $21.4m (£14.88m) restructuring charge for its North American feminine and adult care business. Reported net income fell 7.8% to $433m (£301.07m), or 81 cents a share. Before the one-off charge, earnings rose 5% to 84 cents (58p) a share.

Wayne Sanders, chairman and chief executive, vowed to “aggressively invest in future growth” despite external pressures. The company will today release plans for the launch of its Cottonelle Fresh roll-wipes, a moistened toilet tissue dispenser.

Marketing for Cottonelle’s launch has contributed to an increased research spend of 12.3% to $68.7m (£47.77m) in the first quarter, while advertising and promotional spend has steadied at $555m (£385.90m). The company has invested heavily in innovations such as Cottonelle to help reduce its exposure to the vagaries of pulp prices and to distinguish it from own-label products.

It uses new products like Cottonelle to allow it to increase prices by 4% and the company expects a return to double-digit earnings growth in 2002.