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Unilever Launches Clear in US

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The Dutch consumer goods maker Unilever NV (UN) has launched its hair care product ‘Clear’ in the US markets intending to focus on the ends of hair rather than the root.

Unilever’s brand Clear is an anti-dandruff shampoo, which gives protection from dandruff and prevents it from coming back with regular use. In addition, Clear has patented vita-ace technology that nourishes the scalp, besides conditioning the hair and keeping it soft. Clear has four variants designed for specific needs to consumers and is sold in 42 countries.

Unilever has offered three different variants of Clear targeting men, women and African-Americans and insisted that its brand Clear nourishes the hair from its ends, unlike other hair care products. Clear will be available in the stores of Target Corp. (TGT) and Wal-Mart Stores, Inc. (WMT) from May 20, 2012.

Unilever became the world's leading company in hair conditioning, the second largest in shampoo and the third largest in styling after the acquisition of Chicago-based Alberto Culver in May 2011. The company has significant hair care presence in the US, Canada, the UK, Mexico, Australia and Asia.

Likewise, the company has been strengthening its Personal Care portfolio and expanding in international markets through a number of acquisitions. With the acquisition of the Personal Care business of Sara Lee Corporation (:SLE) in the fourth quarter of 2010, Unilever added leading brands like Radox, Duschdas and Neutral to the company’s portfolio in Western Europe. The recent acquisition of an 82% stake in the Russian brand of Concern Kalina expects to strengthen Unilever’s portfolio in the Russian personal care market. We believe that Unilever’s acquisitions will drive continuous improvement in its businesses and strengthen its capabilities.

Currently, we have a Zacks #3 Rank (a short-term ‘Hold’ rating) on the stock. The company has witnessed input costs and a difficult economic environment  in 2011 which is expected to persist in 2012. The European debt crisis, intense competition from other established players and exposure to unfavorable foreign currency translations undermine the company’s future growth prospects and profitability. Moreover, investments in emerging markets also expose the company to the social, political and economic volatility of these countries.

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