www.bwconfidential.com The inside view on the international beauty industry January 9-22, 2014 #85

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The buzz 2 The year of the… News roundup he year 2014 has begun with analysts expressing even Netwatch 6 Tmore caution over China. The year was ushered in with data showing that manufacturing had slowed in China in December, Beauty blogger review while at the end of 2013, consulting company Bain reported that luxury-goods growth in the country reached just 2% last year Interview 7 and that beauty sales were up 10%, compared with an increase Elizabeth Arden evp & chief of 15% in 2012. marketing officer Kathleen Widmer This slowdown, which has been talked about for almost two years, seems to be having a bigger impact on more companies. Insight 9 French group L’Oréal just revealed that it will stop selling Garnier L’Oréal’s acquisition strategy in China to focus on other brands, namely L’Oréal Paris and Maybelline in the mass channel. In its third-quarter sales report, L’Oréal indicated that growth in the country is Store visit 13 slowing, but still dynamic. Roger & Gallet, The news came just one week after Revlon announced that it will exit China after seeing Rio de Janeiro, Brazil declining sales there last year, a move that market watchers attribute to the company’s problems gaining scale in the country, the tougher economy and strong competition. Other companies have also alluded to less buoyant growth in China. Unilever ceo Paul Polman said at the end of last year that the slowdown seen in emerging markets, such as China, could last for years. This cooling down, combined with the growing cost of doing business in China, may put a damper on some players’ enthusiasm for building business there. The good news, however, is that the Chinese are still traveling and buying abroad, and that the online channel in China is booming, perhaps offering foreign companies a cheaper alternative to Meet the BW Confidential entering and building sales in the country than the traditional brick-and-mortar route. team at: Oonagh Phillips l Elements Showcase, New York, February 4-6 l PCD Paris, February 5-6 Editor in Chief l Duty Free Show of the Americas, Orlando, [email protected] March 9-12 l Make Up in Seoul, March 13-14 l Mondial Spa Beauté, Paris, March 15-17 l Esxence, Milan, March 20-23

News roundup At a glance...

n L’Oréal to stop selling Garnier in China

n Revlon to exit China The buzz n Coty sets up joint venture in UAE, acquires OPI’s UK distributor

n Marionnaud to close Poland business

n Shiseido names new president and ceo

n Galeries Lafayette in talks to purchase House of Fraser Stay informed with our daily news headlines on bwconfidential.com

Strategy French group L’Oréal is to stop selling its Garnier brand in China, to focus on other brands. L’Oréal said that Garnier represents just over 1% of L’Oréal China’s sales, which in 2012 reached €1.5bn. For the mass channel, L’Oréal now plans to concentrate on developing its L’Oréal Paris and Maybelline brands in the country. L’Oréal claims that L’Oréal Paris is the number-one beauty brand in China and that Maybelline New York ranks number one in make-up in the country. China is L’Oréal’s third-biggest market and it has a 17% market share there, according to Euromonitor. Given the slowing economy in China and the increasing cost of doing business there, analysts say other players may re-evaluate their portfolios in the market.

US-based Revlon is to pull out of China and cut 1,100 jobs in a bid to reduce costs. The job cuts will mainly be in China and will include 940 BAs retained indirectly through a third-party agency. Revlon’s China business has been suffering for some time, and reported slower sales last year. China accounts for around 2% of Revlon’s sales. The company says the move will result in a pre-tax restructuring and related charge of BW Confidential 4 avenue de la Marne $22m, generating savings of $11m, of which $8m is expected to benefit 2014 results. 92600 Asnières sur Seine, France [email protected] Tel: +33 (0)1 74 63 49 61 Beauty group Coty is to acquire UK-based company Lena White Ltd, the largest global Fax: +33 (0)1 53 01 09 79 www.bwconfidential.com distributor of its nailcare brand OPI. Lena White has been OPI’s distributor in the UK for ISSN: 2104-3302 Publisher: Nicolas Grob the past 30 years and Coty says the deal is an important step in strengthening the brand’s Editorial Director: Oonagh Phillips position in Europe. Coty acquired OPI in 2010 and describes it as one of its power brands. [email protected] Deputy Editor: Alissa Demorest [email protected] Editorial Coordinator & Assistant: Coty has set up a joint venture in the United Arab Emirates (UAE) with distributors Darlene Lim [email protected] Chalhoub Group and Jashanmal. The new entity, Coty Distribution Emirates LLC, is Contributors: Tina Clark, Louise Dury, intended to strengthen Coty’s business in the region. Chalhoub and Jashanmal already Alex Wynne, Renata Ashcar, Mayu Saini, Raphaëlle Choël, Corinne Blanché, distribute Coty’s products in the UAE. Nadia Di Martino Subscriptions 1 year: electronic publication (20 issues) + Shiseido-owned BPI has set up a joint venture with designer and current fragrance print magazine (4 issues): €499 or US$699 [email protected] licensor Narciso Rodriguez, to secure its partnership with the brand. The joint venture Advertising [email protected] will be 70% owned by Narciso Rodriguez Corp and 30% owned by BPI, and will house BW Confidential is published by Noon Media 513 746 297 RCS Nanterre the Narciso Rodriguez trademark in class three, fragrance and cosmetics. The Narciso Copyright © 2013. All rights reserved. Rodriguez trademarks in all other categories will be wholly owned by Narciso Rodriguez Reproduction in whole or in part without permission is strictly prohibited. Corp. BPI signed a license with Narciso Rodriguez more than 10 years ago. n n n

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n n n People Japanese beauty company Shiseido has appointed Masahiko Uotani as its new ceo, effective April 1. Uotani is currently chief executive partner of business consultancy BrandVision Inc and has been outside chief marketing advisor at Shiseido since April The buzz 2013. He will replace Shinzo Maeda, who took over from former Shiseido president and ceo Hisayuki Suekawa on an interim basis when he stepped down in April 2013. Maeda will be chairman (representative director) as of April 1, 2014, then retire from that position to become senior advisor to the company in June.

Retail French department-store retailer Galeries Lafayette is in talks to purchase UK-based retailer House of Fraser, according to news reports. House of Fraser, which operates 61 department stores in the UK and Ireland, is to go public on the London Stock Exchange early this year, and is said to have been scouting potential buyers for two years. The retailer has annual sales of £1.2bn ($1.96bn).

AS-Watson owned perfumery chain Marionnaud is closing its business in Poland in the first quarter of 2014. “This move is part of our plan to consolidate and re-engineer our store portfolio in Central Europe by opening new stores and upgrading existing stores in high-traffic locations, while closing stores that do not fit our criteria,” comments a spokesperson from AS Watson. Marionnaud will focus on growing its business in the Czech Republic, Slovakia, Hungary and Romania, where it claims to have strong market share. The retailer, which operates around 33 stores in Poland, is said to be struggling in the face of competition from rivals Douglas and Sephora, which together control the bulk of the prestige perfumery retail channel in the country, with close to 200 points of sale.

Korea-based travel retailer Shilla Travel Retail has won the cosmetics and fragrance concession at Singapore Changi Airport, which until now has been held by Nuance- Watson Singapore. The contract will run for six years and covers terminals one to three and the new terminal four, which is slated to open in 2017. In October 2014, Shilla will begin operating the beauty concession, which includes 19 stores covering 5,500m2 (59,202ft2) in terminals one to three and 1,800m2 (19,375ft2) in the new terminal four. The news is a coup for Shilla, which is looking to expand globally; but it comes as a major blow to Nuance Watson, and follows the operator’s loss of beauty concessions at Hong Kong International Airport in 2012.

Beauty tool manufacturer Philips Beauty may roll out pop-up stores to international locations like Paris, New York City, Seoul and Buenos Aires. The company opened its first pop-up store in Amsterdam, the Netherlands early December, describing it as an “interactive learning lab for beauty innovation”. Visitors could try and purchase a selection of the brand’s beauty tools, receive personal skin analyses and hairstyling tips, and access digital information via interactive mirrors and hand-free swipe screens. n n n

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n n n Data

Growth in Mainland China’s luxury-goods market has slowed from 7% in 2012 to around 2% in 2013, totalling Rmb116bn ($19bn) in sales, according to a study by Bain & Co, and the trend is expected to continue in 2014. The cosmetics, fragrance and personal- The buzz care category saw growth of 10% for sales of Rmb32bn ($5.27bn) in 2013, compared with a growth rate of 15% in 2012. Bain said that Chinese shoppers now do two-thirds of their luxury shopping abroad, triggering slowdowns in domestic store openings and store traffic. The Chinese government campaign focusing on corruption has also impacted gifting, which had been one of the major growth engines of the luxury sector. At the same time, consumption in China is shifting, as a result of shoppers becoming more sophisticated. Bain states that consumer segments are more complex, with shoppers in tier-one cities looking for uniqueness and personalization, rather than brands that everyone else buys. As a result, brands need to opt for a more nuanced approach and re-examine their pricing and customer relationships in China, the report states. It adds that store expansion is no longer enough to drive growth. The new focus for most brands is now renovation, relocation and operational improvement for domestic shoppers, as like-for-like sales were negative for many companies in 2013. Marketing and sales channels are changing as well. In Bain’s study, 73% of consumers use the internet to get information about luxury-goods purchases before they buy. In addition, nearly 60% of consumers have made at least some luxury purchases through parallel channels known as “DaiGou” (through overseas contacts, Taobao, or other professional buyer agencies and websites), rather than from brands or department stores. Half of those who have not purchased this way would consider doing so in the future. The Chinese remain the largest nationality of luxury buyers worldwide, with purchases that make up 29% of the global market, a four percentage point increase versus 2012.

Prestige beauty sales in the US came in at $2.2bn for the 12 months ending November 2013, an increase of 23% from the same period last year, according to NPD. Over the past two years, the average price of prestige beauty products has increased, says NPD. Fragrance is the category with the highest average selling price, largest price increase, and most significant increase in unit sales of premium-priced products. The average selling price of fragrance between December 2012 and November 2013 was $68, an increase of 5% from the same period in the previous year. Skincare’s average price was $44 over the period, an increase of 4% from the year before, while in make-up, the average price came in at $26, up 2%.

Launches L’Oréal-owned Lancôme is to unveil a new skincare product this spring that it claims heralds a new category in skin lifting beauty tools. Rénergie French Lift is a night cream composed of two parts: a formula combining resveratrol and oligoside, and a massage disk. The patented massage disk, which fits magnetically onto the lid of the jar, is made of silicone and features small V-shaped grooves. Massaging the face before applying the cream is said to stimulate micro-circulation. Rénergie French Lift will launch in March and retails at €159. n

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Make-up CONFIDENTIAL Beauty insight Facts, figures, trends & innovations

CONFIDENTIAL Netwatch China, Japan, Korea Market watch CONFIDENTIAL Insight: skincare Interview Travel retail:Asia CONFIDENTIA

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What’s instorefor2013? Make-up insight Market watch:US Interview Travel retail Packaging

The views expressed in this section are those of bloggers and do not represent the opinions of BW Confidential Elizabeth Arden evp & chief marketing officer Kathleen Widmer Rethinking Arden

Interview Elizabeth Arden’s Kathleen Widmer talks about the progress of the Arden brand repositioning, which the group embarked on in 2012, and involved revamping the brand’s product portfolio and in-store counters

Projections for the repositioning of Arden were described as ‘overly optimistic’. What needs to be improved and how many counters will you revamp, in addition to the already renovated flagship counters? The repositioning of a brand takes years. When we established our original targets we anticipated that the flagship stores would perform at a better rate than the category, but A handful of great we also expected that the balance of the brand—those counters and geographies where flagship doors, presence we had not invested as deeply—would keep pace with the category, and that is where “ we have re-assessed our expectations. in key geographies, We are satisfied with the performance of the flagships. Just over a year into the strong travel retail and repositioning, our flagship doors in Asia are up 12%, in Europe they are up 13% and in North America they are up 20%. But that said, we would like to have seen a stronger duty free, and strong performance on the base brand. So we are now rapidly expanding to the next round of e-commerce fulfillment doors and in each market are assessing how much and where to invest first to ensure that over the next year we have enough [renovated doors] to impact our overall performance. is a viable business We need to manage our expectations regarding the pace with which this can be ramped model for China to a meaningful level of doors. North America is where we are furthest along in the next round of doors. We have expanded to another 212 doors in the US over the past six months and those doors are Elizabeth Arden evp & up about 8%. They are not up at the rate of the original flagship doors, but they are chief marketing officer behind in terms of some of the elements that need to be implemented, so it is going to Kathleen Widmer” take a bit of time for us to get to that level. The original plan was to double the business over a five-year period, which puts the brand at about number 10 in most of the markets where we compete. I don’t think that it is unreasonable to think that over a five-year horizon we will be in the top 10.

Have you gained space with retailers as a result of the brand repositioning? We have strong examples, particularly in the US, where we have been able to advance the space and location of the brand. The flipside is that we have doors that are not terribly productive and that we would like to minimize. We are trying to balance driving growth Elizabeth Arden on the overall brand with reducing doors that are a profit drain or not consistent with the l Group net sales fiscal prestige image we want. We have a bottom 10-20% of doors that require examination. 2013*: $1.35bn, +8.6% vs fiscal 2012 What else needs to be tweaked? l Net income fiscal Communications will continue to ramp up and we are underway on a series of initiatives 2013*: $40.7m, focused on targeting a modern, discerning woman. We opened the new The Red Door -29.1% vs fiscal 2012 concept salon and shop in Union Square, New York in November with our partner n n n *Year ending June 30,2013

www.bwconfidential.com - January 9-22, 2014 #85 - Page 7 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Elizabeth Arden evp & chief marketing officer Kathleen Widmer

n n n Red Door Spa Holdings. We have a 30% share [acquired in September 2012] in this business and are interested in linking it more closely with brand. This new concept is similar to The Red Door spas, with the difference being that it is laser targeted to an urban We are satisfied professional. This initiative is important to us as it provides an environment that most strongly reflects the brand. “with the flagships’ Interview performance but How do you see the treatment-to-product sales ratio at The Red Door? Product sales at any spa are important, but I wouldn’t minimize the experience. A visit to would like to have The Red Door is the strongest possible advertising for the brand. While experience doesn’t seen a stronger drive immediate profitability as product sales do, it results in new reconsideration of the brand that cannot be generated through communications or traditional beauty counters. performance on the base brand; we are How many new The Red Door concepts will you roll out and where? Our initial plan is to take six months to assess the concept, to see if we got the balance of now assessing how services versus products right, and then expand it. There are a lot of markets where the much and where to concept is viable, but we don’t have a timeframe right now; it is a question of the speed with which we can execute it. We will probably look at urban markets, where the brand invest first to ensure could use an injection of modern relevance, such as London or Shanghai. Our Asia growth that over the next plan is dependent on The Red Door, so that is likely to be the next place we would go. year we have enough Why focus on The Red Door for Asia? [renovated doors] We have a slightly differently approach to markets, such as Asia, where the brand doesn’t have as much of a history. We can use the The Red Door concept to re-establish the to impact our heritage of the brand, as it is one of the best ways to articulate what we stand for. overall performance In general in Asia, our focus will be urban and we will be careful about the number of tiers we expand to; if necessary, we may also cut doors that are not in keeping with this urban focus. There are parts of Asia where we have broad distribution and it is a Elizabeth Arden evp & challenge to effectively cover a broad number of doors. The flagship focus is working for chief marketing officer Kathleen Widmer us in Asia, but the key will be how we grow beyond the market average in the doors that ” we care about, so we are able to narrow down the presence of the brand. We think that The Red Door will work well beyond what any one counter can deliver in Asia, and so the presence of that type of experience there will allow us to accelerate our plan, rather than just look at an ever-growing flagship-type of model, which works well in the West.

You are on [online marketplace] Tmall in China. Will online sales play an important role in this market? There is a very strong presence of beauty brands on the web in China and what we like about Tmall is the ability to create a beauty destination where we have control of the image of the brand [on the web]. China isn’t as encumbered as other markets with thousands of beauty doors that require maintenance over very broad geographies, so there is so much business that can be done with a model that is based on a handful of really great flagship doors, the presence of The Red Door in some key geographies, strong travel retail and duty free and then strong fulfillment in s The new Red Door concept will be key to building the e-commerce; this is a very viable business model for China. n brand’s image, especially in Asia

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L’Oréal’s acquisition strategy Wise buys BW Confidential analyzes L’Oréal’s recent spate of acquisitions

rench group L’Oréal’s portfolio was built on acquisitions. Some 95% of its sales are Fmade through 28 brands, all of which, except two, were acquired. One of its recent big buys was the takeover of Yves Saint Laurent Beauté in 2008, which is now positioned as a key global brand in its luxury portfolio. In the past three years, the group has snapped up brands at a rapid clip—it has added Size doesn’t matter. 12 new companies to its portfolio since 2011. Most of its buys have been intended to fill a gap in a product segment or to buy into a region or a distribution channel where it What“ matters is has a limited reach. The majority of its recent acquisitions have also been relatively small. having a strategic fit “Size doesn’t matter,” explains Alain Evrard, director corporate acquisitions, licensing and external business development at L’Oréal. “What matters is having a strategic fit with with our portfolio. our portfolio. Our aim isn’t to chase a quick deal to immediately increase our sales, but to Our aim isn’t to identify ‘nuggets’ that will generate long-term organic growth.” chase a quick deal to New categories, new distribution immediately increase In terms of product categories, perhaps the most notable purchases in the past three years have been that of skincare device manufacturer Pacific Bioscience Laboratories, maker our sales [...] of Clarisonic, in 2011, and edgy make-up brand Urban Decay, purchased in 2012. The Clarisonic deal was widely praised by analysts, as it furnished the group with an entry into the new category of beauty devices, which has seen rapid growth in the past few years. L’Oréal director corporate At the time of the acquisition, L’Oréal ceo Jean Paul Agon forecasted that personal beauty acquisitions, licensing and devices could be a “major cosmetics category in the next 20 to 30 years”. external business” development L’Oréal is working on expanding the US brand into new markets—it launched in China Alain Evrard France and travel retail last year. The group also says that Clarisonic’s sales have doubled since 2011. n n n

www.bwconfidential.com - January 9-22, 2014 #85 - Page 9 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL L’Oréal’s acquisition strategy

n n n Urban Decay was seen as a clever move, as it gives L’Oréal a chance to play in the trendy make-up artist territory, target younger consumers, and grow its presence in specialty retail channels. However, some critics claim that Urban Decay has lost the

Insight cutting-edge cachet it used to have (although the brand has seen widespread success with its Naked palettes), and that it will be difficult for L’Oréal to go head to head with a brand like MAC. There are also questions as to what impact trendy budget brands like Kiko will have on prestige color brands. The announcement that L’Oréal would purchase Decléor and Carita from Shiseido at the end of last year also garnered praise. L’Oréal’s choice to integrate the brands into its Brazil is a big market Professional Products arm will widen the division’s scope beyond just haircare and into skincare. “Carita and Decléor are great brands that have been underutilized by Shiseido “and having a local and, in the professional context, are quite interesting for L’Oréal,” comments UBS head player is really of European health and personal care and luxury products research Eva Quiroga. important from a tax Buying local and pricing perspective Emerging markets have figured strongly in L’Oréal’s recent rash of buys. Its purchase of number-one facial mask brand, China Magic Holdings, provides the group with a strong [...] Natura is a brand position in a major skincare segment in the country and in other parts of Asia. (The that could probably do deal has not yet been finalized and is awaiting approval from the Chinese Ministry of Commerce.) “Magic is currently only present in Mainland China, where there is still solid well outside the direct- potential for growth. Then we can look to Greater China—Hong Kong and Taiwan— sales channel and maybe also the rest of Asia,” notes L’Oréal’s Evrard. Meanwhile, the group’s purchase of Kenya-based company Interconsumer’s health and beauty portfolio is a sign of its ambitions for Africa. The company, which reported sales of around €15m in 2012, manufactures and distributes mass haircare and skincare UBS head of European health and personal care and luxury products in East Africa through brands that include Nice & Lovely, Gold Touch and products research” Eva Quiroga Queen Elizabeth. “The company gives our subsidiary [in Nairobi] immediate access to a certain critical mass, as well as manufacturing facilities within Eastern Africa,” explains Evrard. He adds that when it comes to future buys in the region, “L’Oréal’s radar is going 24/7,” but remarks that there are few local targets and much of the business is in imported brands. Colombian mass make-up brand Vogue, purchased in 2012, has given L’Oréal a chance to more than double its size in the country, providing growth potential in northern Latin America. Also in Latin America, The Body Shop purchased a 51% share of Brazilian beauty franchise retailer Emporio Body Store. The retailer operates 130 points-of-sale in 58 cities across Brazil. After a transition period, the stores will be renamed The Body Shop and will offer products from both Emporio’s and The Body Shop’s catalogs. L’Oréal also aims to develop products specifically conceived for Brazilian consumers in a local R&D hub to sell in the stores.

Missed opportunities? There are still areas where analysts believe the group could invest. L’Oréal has repeatedly denied interest in acquiring a direct-sales company, such as Avon or Natura, despite the fact that a move like this could give the company a major foothold in markets like Brazil, which are costly to do business in for outsiders. It was thought that when Coty made a bid for Avon, L’Oréal was also in the running; however, the French group claimed it n n n

www.bwconfidential.com - January 9-22, 2014 #85 - Page 10 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Insight n L’Oréal’s acquisitionstrategy past fewyears. acquisitions, as it has been doingL’Oréal in the will continue to look for turns out,manyseemconvinced that small for me, it’s business as usual.” in theacquisitionpotential[financially],so Evrard saying: “I have never beento limitedcomment on the Nestlé issue, transaction,” sheexplains.L’Oréalrefused with 18-24 months, so it would be a five-yearonly process 10% of the shares everyand cancel their shares L’Oréal becould a multi-year process. “To buyhappen, back she says, the transactionUBS’ would Quiroga. Even if a buyback whilewere toNestlé has been very quiet,”has saysbeen very much pushed by L’Oréal, to athirdparty. companies canoffertoselltheirshares in April2014,atwhichpointthe shares. However, this agreement L’Oréal,expires includes a provision that gives each party first right its stakeinL’Oréal,asitseekstofocusoncorebusiness. of refusal on the other’s and fragrance company Givaudan hasshare given in L’Oréal,rise to speculationand the recent thatbuy announcement it back would the also stake that divest foodit would company sell Nestlé its 10% holds share in inthe flavor French group. conference lastyear,whenthegroupshowedastockpileof€1.57bnincash. Nestlé has a 29.3% “means and the guts” to make a bigsaid deal. that Thisthe groupwas announced was open atto itsL’Oréal“more annual important may results have acquisitions” made relatively andThe cashconundrum small that dealsit had of the late, but at the beginning of 2013 Agon is theheadacheofmanagingnothundredsorthousandssalesstaff,butmillions. and predict that the same patternsome might markets, begin within Brazil the channel and Latin startingdistribution, thedoor-to-doorchannelbeginstoloseshare.Analystssaythisistruein America. to loseAdded ground to this in Easternbegins Europe to anddevelop, Russia, and infrastructuredirect-sellers starts to have grow momentum with malls when and consumption more modern starts to take off,that couldprobablydowelloutsidethedirect-saleschannel,”shecomments. but when a market player is really important from Brazil’sa tax and Natura pricing could perspective. be an interesting In addition, target. Natura “Brazil is a isbrand a big market and having a local Regardless of how the Nestlé issue “The wholesharebuybackdebate An agreement between Nestlé and the Bettencourt family, who owns 30.5% of However, L’Oréal’s capacity to make major acquisitions may be impacted if it were to Yet L’Oréalexecutivesbelievethatthechannelhasitslimitations.Thereisafear hadn’t made a move for Avon, even after Coty withdrew its bid. For UBS’ Quiroga, hadn’t madeamoveforAvon,evenafterCotywithdrewitsbid.ForUBS’Quiroga, n n n

L’Oréal’s acquisition strategy n n n L’Oréal’s acquisitions 2010-2013 2013 • Decléor & Carita: L’Oréal has made an offer to acquire the Decléor and Carita Insight brands from Japanese group Shiseido for €230m. The brands reported sales of €100m in 2012, ranking them number-two in the professional skincare market in beauty institutes, spas and hair salons. They would be managed by L’Oréal’s professional division. • Magic Holdings: L’Oréal announced it would buy Chinese facial mask brand Magic Holdings. The company claims to be the number-one brand in the mask category in China. Magic Holdings reported sales of around €150m in 2012. The deal is subject to approval by Chinese authorities. • Emporio Body Store: L’Oréal’s The Body Shop bought a 51% share of Brazilian beauty franchise retailer Emporio Body Store, with an option to increase its share to 80% in 2019. The retailer operates 130 points-of-sale in 58 cities across Brazil. Its product offer includes soaps, creams, essential oils, fragrance and body butters. Emporio Body Store reported sales of R$20m (US$9.16m) in 2012. • Cheryl’s Cosmeceuticals: The Mumbai-based professional skincare company is L’Oréal’s first acquisition in India. It markets skincare and treatment services in more than 10,000 beauty salons in India and reported sales of around €3m in 2012. • Interconsumer Products Ltd: Proof of L’Oréal’s focus on the Africa region, Interconsumer manufactures and distributes mass haircare and skincare products in East Africa through brands like Nice & Lovely, Gold Touch and Queen Elizabeth. The company reported sales of around €15m in 2012. • Nickel: L’Oréal bought the prestige men’s skincare brand from Interparfums. In addition to product, Nickel operates two spas, one in Paris and one in New York.

2012 • Urban Decay: Urban Decay joined L’Oréal’s Luxe division. The brand reported sales of $130m in fiscal 2012. • Vogue: The Colombian brand is a leader in mass make-up in Colombia and reported sales of €30m in 2011. L’Oréal says there are opportunities to grow the brand in northern Latin America. • Cadum: The French brand, which offers babycare, bodycare for women and men, and an organic bath and body range, is now part of the Consumer Products division. The brand saw €58m in sales in 2011, €49m of which came from the French market.

2011 • Pacific Bioscience Laboratories: L’Oréal USA acquired the US-based maker of the Clarisonic skincare device. L’Oréal’s first priority was to expand international business, which at the time of the purchase accounted for just 3% of sales. Clarisonic is now sold in travel retail and in France, China, Japan, the UK and Hong Kong.

2010 • Essie: L’Oréal USA bought New York-based nailcare brand Essie Cosmetics, which did an estimated $28m in sales before the acquisition. Today, Essie is said to have annual sales in excess of $100m. At the time of the acquisition, it was thought that L’Oréal would expand the brand into other color categories. n

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Brave new world Roger & Gallet opens its first standalone store in the Americas

’Oréal-owned brand Roger & Gallet opened a standalone store in Rio de Janeiro, Brazil L last November, its first boutique in the Americas region. Covering 31m² (334ft2), the store, which is modeled after the brand’s Paris flagship that opened in June, aims to marry contemporary design with the brand’s heritage, while paying homage to its Parisian origins. Products are merchandised on white units and there is a soap wall, where the brand’s paper-wrapped soaps are displayed in side-by-side columns. There is also a gift bar where consumers can personalize gifts with a selection of colored papers and satin ribbons. The store sells 77 exclusive products that cannot be found in other points of sale, among them, the fragrances Vanille, Amande Persane and Bouquet Imperial, as well as scented wipes with the fragrance Jean Marie Farina, body oils and creams, and candles. Roger & Gallet Roger & Gallet has ambitious plans for the store. “In the first year, this store will become l Opened: the biggest for us in terms of sales in Brazil. However, the most important objective for the November 2013 store is to be able to convey the sensorial aspect of the brand to Brazilian consumers,” com- l Location: Rio de ments Roger & Gallet brand director Brazil Beatriz Campos. Janeiro, Brazil In 2012, Roger & Gallet began launching personalized in-store boutiques inside pharmacies l Size: 31m2 (1,291ft2) in Brazil, such as Drograria Venancio in Rio de Janeiro, for example. The brand is sold in more l Special features: than 550 pharmacies across Brazil. n Gift bar, exclusive items

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s The store aims to marry contemporary design with the brand’s Parisian heritage

s The soap wall features products in side-by-side s A gift bar with wrapping paper and a selection of satin ribbons is columns and adds a touch of color to the store available for personalizing purchases

www.bwconfidential.com - January 9-22, 2014 #85 - Page 14 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Get the latest news, analysis and commentary on the international beauty industry

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