It Teaches Old Brands New Tricks; Chattem Inc.; Chattanooga, Tenn. chattem.com.(HEALTH & MEDICINE)(UNDER THE MICROSCOPE)

Byline: Amy Reeves

When it comes to growing brands, you can go two ways. You can create new ones and try to build them into household names. Or you can take familiar brands and extend the heck out of them.

Chattem has taken the latter route. It owns such well-known drugstore brands as Gold Bond, Dexatrim and Selsun Blue. The company picked up nearly all of them by acquisition once they were established on the market.

Though each of the lines has solid sales, Chattem looks to kick growth into higher gear by developing products or scouting out new markets.

For instance, Gold Bond has grown beyond its famous athlete's-foot powder to include baby powder, anti-itch cream, antibiotic ointment and, most recently, body lotion. Selsun Blue is growing fastest in emerging markets such as the Middle East.

Another brand, Icy Hot pain reliever, has gotten a sales lift from a TV ad campaign featuring basketball star Shaquille O'Neal.

Chattem President and Chief Operating Officer Alec Taylor says the firm buys brands opportunistically. But it's not into big risks.