www.bwconfidential.com The inside view on the international beauty industry March 5 - April 1, 2015 #108

CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

Comment Inside

The buzz 2 Version X News roundup he number of new fragrance launches continues to rise Netwatch 6 Tand stood at 1,620 in 2014, according to the latest edition of fragrance guide Fragrances of the World 2015 Social media monitor by industry expert Michael Edwards. However, the pace of new introductions slowed somewhat last year. In women’s Interview 7 fragrance, the number of launches in 2014 dropped to Gebr Heinemann purchasing & 925 compared with 968 in 2013. The niche category, logistics executive director Kay Spanger which is fast becoming saturated, also saw a slight decline in launches with 448 new products in 2014, against 540 Insight 9 in 2013. European perfumeries But the number of flankers continues to rise—a total of 275 were introduced last year— as brands looked to capitalize on existing ranges rather than take the risk of introducing a Store visit 13 completely new franchise. Yves Rocher, While most bemoan the number of launches, the newness factor is unlikely to go away. No matter what the industry, from mobile phones to tablets, consumers are looking for the latest new thing. The only difference is that in many other sectors the latest product often boasts a new technological feature or interesting update, while in fragrance, consumers will be offered a lighter or more intense version of a scent that came out a year earlier. The question is whether version x of a well-known scent is compelling enough for consumers to part with their cash and make a purchase. Meet the BW Confidential team at:

Oonagh Phillips l Cosmopack, Bologna, March 19-22 Editor in Chief l Cosmoprof Worldwide, Bologna, March 20-23 [email protected] l Duty Free Show of the Americas, Orlando, March 22-25 l Esxence, Milan, March 26-29 l in-cosmetics, Barcelona, April 14-16 l Luxe Pack Shanghai, April 15-16 l MakeUp in Seoul, April 15-16 l BeautyEurasia, Istanbul April 30 - May 2 News headlines daily on www.bwconfidential.com @BWCbeautynews l TFWA Asia Pacific, May 10-14 News roundup At a glance...

n Unilever to acquire Ren

n Brazil exempts some beauty categories from registration The buzz n Advent looks to IPO for Douglas or sale of chain

n Fragrance launches reach 1,620 in 2014 Stay informed with our daily news headlines on www.bwconfidential.com

Strategy

Unilever is to acquire UK-based natural skincare brand Ren. The brand, founded in 2000, is sold in 50 countries, mainly in specialty stores and pharmacies. Unilever says that Ren has potential for further growth, given that the naturals category is one of the fastest growing in skincare globally. The acquisition is to close in May 2015.

Brazil’s national surveillance agency of health, ANVISA, has updated regulations on cosmetics sold in the country. The new regulations mean that a number of cosmetics categories will be exempt from registration. Brands will only be required to notify health authorities that their products will be put on the market. The new regulation aims to simplify and speed up the process of bringing products to market in Brazil. However, the exemption does not apply to what are considered high-risk products, such as hair- straightening items, sunscreen, insect repellent, antiseptic gel and children’s products.

Fragrance house Firmenich has sold its fragrance-themed website Osmoz to French digital agency The Twelve. The agency was in charge of Osmoz’s update two years ago, and has been managing the site since then. Launched in 2001, Osmoz is present in more than 15 countries and has 234,000 active members, according to Firmenich.

Retail

Private-equity company Advent is preparing to list German perfumery chain Douglas on the stock market, says Reuters. Advent is looking to either an IPO towards the end of the year or to selling Douglas, say sources. Advent acquired a majority stake in Douglas in 2012 and took the group private. Douglas has since looked to focus on its perfumery business by buying French retailer Nocibé and selling its jewelry stores Christ and confectionery stores Hussel. It also plans to sell its Thalia book stores division.

Budget brand E.l.f. Cosmetics opened its first standalone store outside of the US last month, in Aix-en-Provence, France. The 50m2 (538ft2) boutique sells the brand’s color cosmetics range and has a make-up artist on staff, in addition to its beauty advisors. The brand also moved into skincare last month. The line, priced between $8-$12, will debut with 11 skus and includes a primer, night cream, exfoliating scrub and BB cream. n n n

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 2 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL News roundup

n n n World Duty Free Group (WDFG) has extended its contract with Kuwait International Airport for five more years, with the option of an additional year. The travel retailer, which works with local partner That Es-Salasil in Kuwait, has held the concession since 2006. WDFG will continue to operate two stores in the departures area, one of

The buzz which is dedicated to beauty and jewelry. The contract took effect on March 1.

Sephora is launching a click-and-collect service in France in May. Shoppers can order and pay online and then pick up their purchase in Sephora stores three hours later.

A French court has rejected worker unions’ demands to close AS Watson-owned Marionnaud’s flagship store on the Champs-Elysées at 9pm. The store will be allowed to remain open until midnight.

Beauty subscription box player Glossybox turned a profit for the first time last year. The -based company claimed it made a seven-digit profit. Present in more the 10 markets, the company also said that its consumer base increased by 25% last year, while marketing costs were reduced by 33%.

People

The US-based Personal Care Products Council (PCPC) appointed Thia Breen, group president of North America for The Estée Lauder Companies, as board chair last month. Breen was previously vice chair of the council and replaces Elizabeth Arden chairman, president and ceo E. Scott Beattie, who had served as PCPC chair since 2012.

LS Travel Pacific has named Ken Tse as head of operations duty free and luxury. Tse was previously managing director of Nuance-Watson’s Singapore operation.

Sisley has named Jim Maki president of Sisley USA. Maki joined Sisley in 2012 as executive vice president of the US division.

Joy Chen, formerly ceo of skincare brand Yes To Inc, has been named president and ceo of Pola Orbis-owned skincare brand H2O+. New fragrance launches 2014 Faber Castell Cosmetics has named Christina Zech as managing director. Category 2013 2014 Feminine 968 925 Data Masculine 328 353 Unisex 314 342 Last year, 1,620 new fragrances launched on the global market, according to the Niche 540 448 31st edition of fragrance expert Michael Edwards’ Fragrances of the World 2015. Limited editions 245 263 This compares to 1,610 new launches in 2013. Some two categories saw fewer launches in 2014: women’s scents (925 versus Flankers 245 275 968 in 2013) and niche, with 448 new scents in 2014, compared to 540 the Celebrity 58 79 previous year. Despite an ailing celebrity fragrance market, there were 79 new Total 1,610 1,620 fragrance launches in the category last year, compared to 58 in 2013. n n n Source: Fragrances of the World 2015

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 3 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL The buzz (50ml EdT)and €97(90mlEdT). designed thevisualidentityof City Blossom. cedar, ambroxandwhitemusk. freesia andmagnoliaabaseofwhite pepper andcitrus,aheartofosmanthus, Firmenich. Itfeaturestopnotesofpink is awoodyfloralbyAlbertoMorillasof City Blossom,thenewwomen’sscent franchise thismonth.CalledL’Eaud’Issey fragrance forIsseyMiyake’sL’Eaud’Issey BPI islaunchingalimited-editionEdT and bodygelathree-soapcoffret. line includesshowergel,bodylotion,hand (€48), 50ml(€70)and100ml(€100).The worldwide inMarch.TheEdTcomes30ml out todepartmentstoresandperfumeries February inHermèsboutiques,andwillroll trees, jasmineandSzechuanpepperbushes. found inChinesegardens,includingprune Jean-Claude Ellena,wasinspiredbyplants 2003. CalledLeJardindeMonsieurLi,theEdT,createdbyHermèsin-houseperfumer Hermès isaddingafifthfragrancetoitsLesJardinscollection,whichwasintroducedin Launches n country since2008,saysNPDGroup’s decrease overthepreviousyearandlowestlevelofbeautyshoppersin Close tosixmillionfewerwomenboughtbeautyitemslastyearintheUS,a4% 1%, whileinSpainsalesfellby7%. in theUKtheyincreasedby8%.InItaly,however,segmentreportedadecreaseof month ofJanuary,accordingtoNPDGroup.InFranceserumsaleswereupby5%,and 50% claim that price is not the most important factor when buying beauty. 50% claimthatpriceisnotthemostimportantfactorwhenbuyingbeauty. nearly 50%ofwomenpolledsaytheyusuallybuydiscountedproducts,yettheremaining continue tobuytheseproductsbecausetheyboosttheirselfesteem.Intermsofpricing, stop buyingiffinancesweretight,butalmostthesamepercentagesaytheywould the report,majoritysaytheywouldbuymake-uporfragranceitems. special occasions”.Yetifwomenweregivenanextra$100tospendonbeauty,says often asonskincareandhaircare,respondentssaymake-upfragranceare“for News roundup L’Eau d’Issey City Blossom will retail at €69 L’Eau d’IsseyCityBlossomwill retailat€69 Parisian streetartistMademoiselle Maurice Le JardindeMonsieurLilaunchedmid- About half of women say that beauty would be the first product category they would About halfofwomensaythatbeautywouldbethefirstproductcategorythey Consumers reducedtheirspendingonmake-upandfragranceitems1.5timesas saw contrasting results in Europe for the The saleofprestigeskincareserumssawcontrastingresultsinEuropeforthe n Annual Beauty Consumer Economic Indicator Economic Consumer Beauty Annual . Source: NPDGroup*Valuesales % changeJan2015vs2014 Prestige serumsales*inEurope UK France Country % change Jan 2015 % changeJan2015 vs Jan2014 +8% +5% -7% -1% News roundup

n n n Givenchy (LVMH) is to launch a new men’s scent in its Gentlemen Only franchise this spring. Called Gentlemen Only Casual Chic, the fragrance is the third in the line, following Gentlemen Only in 2013 and Gentlemen Only Intense in 2014. The fresh, spicy, woody fragrance comes in the same shaped bottle as the original, but with a touch of orange. It will be backed by an ad campaign featuring actor Simon Baker. The buzz Gentlemen Only Casual Chic will launch exclusively in France at Sephora in March before rolling out to other distribution. It is priced at €62.50 (50ml EdT) and €87 (100ml EdT).

Italy-based Mavive has come out with a new men’s fragrance for the Police brand called Icon. The scent, aimed at 25- to 40-year-olds, comes in a striking multi-faceted blue-toned glass bottle in the shape of a falcon. Icon is described as a woody, ambery fragrance with fruity and spicy top notes, a woody heart and a base of vanilla and labdanum. It was created by Céline Ripert from Mane. The fragrance will launch internationally in March and at €29 (40ml EdP), €38 (75ml EdP) and €48 (125ml EdP).

Perfume Holding-owned fragrance brand Atkinsons is launching three new fragrances in its Legendary Collection, which are reinterpretations of scents from the brand’s catalog from the 1920’s. The Excelsior Bouquet, a scent for men created by Benoist Lapouza of Drom, features notes of grapefruit, sage, nutmeg, Szechuan pepper and vetiver. Amber Empire, by Maurice Roucel from Symrise, is a unisex EdT with Oolong tea, Chinese magnolia, sandalwood, incense, vanilla and white musk notes. The third fragrance, Love in Idleness, is a women’s EdT with violet, iris, heliotrope and patchouli notes. It was created by Firmenich perfumery Fabrice Pellegrin. The three fragrances each retail for €130. Atkinsons was relaunched in 2012 with a more premium positioning. The brand is sold BW Confidential in 200 doors today, and has a long-term target of 450 points of sale. 4 avenue de la Marne 92600 Asnières sur Seine, France [email protected] French skincare brand Ioma is launching Collagen Renew in March, its first ingestible Tel: +33 (0)1 74 63 49 61 Fax: +33 (0)1 53 01 09 79 anti-aging product. Ioma claims that Collagen Renew is the first encapsulated product www.bwconfidential.com ISSN: 2104-3302 to fight wrinkles by building up collagen in the skin. “Topical products are the traditional Publisher: Nicolas Grob route to anti-aging, but oral products are the more potent route,” comments Ioma ceo Editorial Director: Oonagh Phillips [email protected] Jean Michel Karam. The supplements contain omega 3 extracts, isoflavones, lycopene Deputy Editor: Alissa Demorest [email protected] and vitamins C and E. Editorial Coordinator & Assistant: Collagen Renew targets women 35 and over. The box of 105 pills, for a five-week Katie Nichol [email protected] regimen, costs €89. The brand recommends taking the supplements for 15 weeks. Contributors: Tina Clark, Alex Wynne, Renata Ashcar, Mayu Saini, Raphaëlle Choël, Ioma also launched a feature on its Ioma Amoi app called My Coach. The app illustrates Corinne Blanché Subscriptions the new product’s effect on the skin and puts consumers in touch with a beauty expert to 1 year: electronic publication (20 issues) + answer questions about the treatment. print magazine (4 issues) + daily news: €499 or US$699 [email protected] Advertising Nail brand Ciaté is to launch its first color cosmetics collection this spring. The range will [email protected] include a Skinny Shadow Stick, an eyeshadow stick featuring a washable latex tip, which BW Confidential is published by Noon Media 513 746 297 RCS Nanterre the company claims ensures precise application. Copyright © 2015. All rights reserved. Reproduction in whole or in part without The line-up also features mascaras and eyeliners. In France, the make-up collection will permission is strictly prohibited. launch exclusively at Sephora from mid-April. It ranges in price from €9 to €16.90. n

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 5 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL This document is published by

The views expressed in this section are those of bloggers and do not represent the opinions of BW Confidential Netwatch the skin,isaparticularfavoriteincollection. types. ThehighlightingandcontouringMulti-Stick,formulatedtohaveacoolingeffecton said tohavesoldoutonline.Bloggerssaytheproductsaresuitableforallskincolorsand The newSephora+Pantonecollection,basedonPantone’sMarsalacolorfor2015,is expected tolaunchsimilarinitiatives. is avideochatthatlasts15-20minutes,likedforitsconvenience.Moreretailersare connect consumerswithbeautybloggersviaGoogle+hangouts.Thefreeservice,which Bloggers areapplaudingUKretailerTesco’sonlinebeautyconsultationsessionsthat bloggers. Theypraisethefairytaleconceptandvisuals,aswellshadespacks. film, includingrangesfromMACandnailbrandMorganTaylor,havestruckachordwith Cinderella-themed colorcollectionsinspiredbytheupcomingremakeofDisney is nowreferredtoasthego-tosourceforlatestmake-uptrends. launched byfashionbloggers,#EOTDinvolvespostingeyemake-uplooksonthesite,and has beentakingthesocialmediaworldbystorm.Inspired#OOTD(outfitofday) A newphenomenononInstagramcalled#EOTD,anabbreviationofeyetheday, Social mediamonitor BW Confidential BW reportsonwhat’sbeingsaidaboutbeautysocialnetworks Gebr Heinemann purchasing & logistics executive director Kay Spanger Hard talk

Interview Travel retailer Gebr Heinemann has cemented its growing international reach. This year it captured the contract for all airside retail space at Istanbul New Airport with Unifree Duty Free, and started operations at Sydney airport. But Heinemann‘s Spanger sees a lack of innovation in the beauty segment and says improvements are needed to drive growth

How is beauty performing at Gebr Heinemann? Over the past few years, the perfume and cosmetics category has been developing in line with or slightly below the average trend at Gebr Heinemann. Only three years ago it was a totally different picture as it had always been above average. One reason for this is the change in the passenger structure. For example, Asian consumers have been traveling less for a couple of years now, and buy fewer products from this category as gifts because of With travel exclusives, new regulations and restrictions in Asia. Another factor within the past 12 to 18 months has been the decrease in the number of Russian customers due to the political situation, “[the beauty as well as the enormous depreciation of the Russian ruble. The impact of these factors is industry] is not very massive as the buying power of these two groups is significantly higher than that of other nationalities. innovative. [....] Generally, skincare and make-up develop and perform better than fragrance. However, The industry should luxury fragrance brands or luxury niche brands (for example, Hermès, Tom Ford and Elie Saab) are performing well, as are trendy make-up brands such as MAC and Urban not underestimate Decay as well as new brands like Kérastase for haircare and Vichy for dermaceuticals, its customers—a which should keep the perfumes and cosmetics category at its level. Having said that, it is essential to be patient; results will not come on a short-term basis. Other fragrance with a positive contributors to the segment are special lines from brands, such as Chanel Les shower gel is not a Exclusifs, Armani Privé and the Oriental Collection by YSL. We still see good results with travel exclusives, but beauty is not very innovative here. The liquor segment has now travel exclusive, it is created more attractive travel exclusives and limited editions. The industry should not nothing other than a underestimate its customers—a fragrance with a shower gel is not a travel exclusive, it is nothing other than a simple package of two products. simple package of two products Which stores are performing best for you in terms of beauty? What are you doing to improve the in-store experience? There is no specific store that performs better than any other; it always depends on the Gebr Heinemann purchasing mix of passengers. We know that success comes as a result of well-trained and highly & logistics executive director motivated staff, and these values create our top-level service. We now expect more Kay Spanger innovative ‘retailtainment’ initiatives from the industry, which are not only designed for the ” brand; there has to be something special in it for the customer. A good example was our Carousel of Beauty promotion with L’Oréal in Copenhagen airport, where n n n

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 7 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Gebr Heinemann purchasing & logistics executive director Kay Spanger

n n n different fragrances decorated a Christmas tree. We also expect the industry to do more cross-category promotions to attract the customer with segments such as confectionery or accessories. Our cross-category promotion with Gucci in Istanbul, for example, presented fragrances and sunglasses We expect the together. The perfume and cosmetics industry is quite inflexible—everyone talks about industry to do more Interview having understood the message, but due to their own complicated structures they don’t “ offer more innovations. We expect more ideas for promotions in the category, especially cross-category with brands that can easily combine the three pillars of fragrance, skincare and make-up. promotions [....]

What are the main challenges for the beauty category? with segments such We have been telling the industry for years that they should try to bring back luxury and as confectionery quality to domestic markets, mainly in Europe. Gebr Heinemann and all retailers have constantly improved the quality and visibility of the beauty category over the past five or accessories. The to eight years, but the customer does not seem to notice it. This is a shame, but quite beauty industry is understandable as these efforts have not been seen in domestic markets; in general, it is the opposite—quality and visibility have deteriorated there. This is a problem for the quite inflexible— whole category. everyone talks about The young generation no longer sees perfume as a luxury item; it isn’t number one on the wish list anymore. Bags, sunglasses and watches seem to be more attractive to the having understood the consumer. The erosion in perception of luxury is a result of far too many products on the message, but due to market. It is a shame that no one tries to further develop ‘classics’ and create more classic fragrances out of novelty scents. Lack of innovation is one of the main challenges. their own complicated structures they don’t How can you compete with the domestic market in light of discounting on the high street? offer more innovations Permanent discounts in most European countries are a huge problem, and we will not stop counter-attacking these discounts with our own price offers like -30 %, Special offers Gebr Heinemann purchasing for Heinemann Retail Brands, special prices like €29.90 or €39.90 and duo sets (2x50ml & logistics executive director and 2x30ml). Nevertheless, we can’t compete with discounts on the domestic market, Kay Spanger which have obviously increased in the past few years, especially due to e-commerce. ”

What digital initiatives are you putting in place to better target consumers? E-business is quite a challenge. We have already implemented a lot of ideas where we offer fantastic possibilities to our customers outside our shops. A couple of years ago, our business was limited to the stores, but today we are already connected to 250,000 customers online and we will surely create additional business on top of that. For every retailer, and for travel-retailers, e-business is crucial for the future. Overall, we have never stopped improving our performance and despite our positive results, sometimes challenge is good because it keeps s Gebr Heinemann is looking to more retailtainment, like the Carousel you on your toes and opens your mind to of Beauty promotion with L’Oréal in Copenhagen airport, where different new paths. n fragrances decorated a Christmas tree

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 8 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Insight

s Douglas is testing a new store format focusing on younger, trendy brands European perfumeries Time for renewal Fresh retail concepts and a renewed focus on service both online and offline may help to turn the European perfumery market around

he European perfumery landscape was marked by another round of consolidation Tlast year when Germany-based Douglas Holding acquired French chain Nocibé. The deal, which was finalized in June 2014, created the largest perfumery network in France in store numbers. When the deal was announced, Douglas had 179 stores in France and Nocibé operated 466 doors. In January, Douglas sold 13 doors to retailer Athénaïs. In terms of sales ranking, Nocibé/Douglas now is second only to Sephora in France, while AS Watson-owned Marionnaud takes third place. Douglas Perfumeries ceo Dr Henning Kreke told BW Confidential last month that all Douglas stores in France have now taken on the Nocibé nameplate. Beauty company Groupe Bogart fragrance marketing manager Fanny Alexandre Aimetti comments: “It was necessary for Nocibé and Douglas to get together to have sufficient weight to compete with Sephora in France. While Nocibé is more geared towards alternative product offers and lower price points, I think they can be quite successful by clearly differentiating their product mix from what Sephora offers.” The Douglas acquisition has forced other players to partner up to gain scale. In October 2014, French perfumery franchise retailer Beauty Success signed an alliance with Passion Beauté, a group of independent perfumeries. The new structure, Beauty European retailers by store numbers Alliance France, is 50% owned by each player, and will allow the two entities Douglas 1,070 to negotiate more favorable terms. The alliance takes fourth position in the Marionnaud 1,000 perfumery market with 450 perfumeries and an 11% market share. It aims to Sephora 929 have a 15% market share by 2019. Nocibé more than 600 Industry watchers are expecting further consolidation in Europe. Italian retail chain Limoni, which was bought by private-equity company Orlando Italy in Limoni 370 2012, is expected to change hands again after this year. Advent is also said to be Ici Paris XL more than 290 either looking to list Douglas on the stock market, or sell the chain before n n n The Pefume Shop more than 260

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 9 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL European perfumeries

n n n the end of the year. This recent round of retail consolidation, and forecasts of more to come, are a worry for suppliers, given the spectre of dwindling negotiating power and further pressure on Insight margins. There is also the issue of where retailers will make cuts to fund their expansion and pay the costs of integrating new businesses. Brands worry that training budgets, Perfumery retail generally the first item to go when cuts need to be made, will be sacrificed, and that they will have to shoulder more of these costs. buyers“ generally come It is also feared that more consolidation will mean that retailers will be more focused from mass retail and on integration and cost-cutting than on the shopping experience and the consumer. According to sources, since private-equity company Advent International acquired Douglas they have that mass in 2012, there have been a significant number of staff departures and morale is said to be mindset. In other low as management looks to further cut costs. words, they don’t The traffic challenge look at what the The consolidation trend is unlikely to help perfumeries with one of their biggest problems: the decline in store traffic. According to a study by Kantar Worldpanel published last year, consumer might be in France the selective channel has lost 1.6 million shoppers since 2011. Industry watchers interested in, but at attribute some of this to the growth of online shopping, which now accounts for between 5 and 10% of retailers’ sales depending on the market. But it is also due to poor service what flies off the and a shopping experience that is in need of renewal. shelf today. The result Analysts say escalating prices are a key reason why consumers are not visiting perfumeries and are looking to other channels or retailers, especially given the fragile is an increasingly economic context in many European markets. “Consumers could be visiting stores less banal retail offer, because retailers are asking for more investment from brands, which means that we have to raise our prices. But this kind of policy only alienates consumers and creates which doesn’t help an open door for budget brands like Kiko,” bemoans French brand Black Up general build traffic manager Lionel Durand. This is especially tough for smaller brands, which don’t have the negotiating power of large beauty groups. Price hikes also provide more of an incentive for retailers to discount. Perfume Holding vice president of Service is another issue. “Retailers have clearly slacked on service. They need to look marketing Brigitte Wormser closely at what is working in beauty retail, such as online sales or vertically integrated ” players like Yves Rocher, where service is a much more of a priority,” says Durand. Industry players say retailers need to make an effort to offer what their consumer wants. “Perfumery retail buyers in Europe generally come from mass retail and they have that mass mindset. In other words, they don’t look at what the consumer might be interested in, but at what flies off the shelf today. The result is an increasingly banal retail offer, which doesn’t help build traffic in the store,” says Perfume Holding vice president of marketing Brigitte Wormser. French brand Sisley ceo Philippe d’Ornano agrees. “The main problem facing perfumeries is how they are approaching their consumer. Are retailers looking at the consumer as a short-term sale to meet budgets or are they working to build a long-term relationship? If they don’t put the consumer at the center of their strategies, they’ll lose her to other sectors,” he comments. s Marionnaud is looking to improve its service with its 4Skin To reverse the decline in traffic, brands say they are n n n program in Italy, which focuses on specialist skincare advice

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 10 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL European perfumeries

n n n having to do all the work. “The bottom line is that perfumeries are losing traffic. To counter this trend, some brands propose animations or new offers that will drive consumers into stores, but they aren’t always accepted by the retailer, and if they are, In-house brands Insight often they are at the brand’s expense,” says Wormser. “are and will remain Retailers embark on new projects an important factor However, retailers are looking at various strategies to up their game. One idea is to shake up the product mix in perfumeries with more niche brands, given the pull this category for success for has with today’s consumer. Sephora has been doing this for some time and other retailers perfumery retailers. have followed suit. Some retailers are now even considering dedicated spaces for the category, but lack of space remains an obstacle. And retailers are unlikely to want to cut […] However, our space given to brands that generate more sales than small niche players. customers also One interesting initiative is AS Watson-owned Marionnaud 4Skin Program, which launched in Italy this year. The program aims to offer consumers personalized skincare expect attractive advice both in-store and online. The program will focus on four segments: eye-contour, products from major bodycare, facial skincare and suncare between March and July of this year. Each Marionnaud store in Italy will have a dedicated skincare specialist and the retailer also brands. Our challenge launched a 4Skin Program website. The site includes video tutorials and a forum where is to find the right four specialists are on hand to answer questions. “More than 500 hours of training for our staff has allowed us to select a skincare specialist for each store in Italy. She is able balance between to offer custom advice on skin problems, the perfect mix of products and their best use,” these two categories comments a Marionnaud spokesperson. This initiative, says the company, will make Marionnaud a venue dedicated not only to beauty, but also to prevention, health and wellbeing. In France, Marionnaud is currently Douglas Holding president & ceo and ceo of Douglas revamping its store network. The new concept includes two tables dedicated to product Perfumeries Dr Henning Kreke discovery, as well as spaces for services, such as quick make-up application and skincare ” diagnoses. Marionnaud also wants to personalize the stores by offering a “story” or theme for Going omnichannel different areas. “The concept is meant to be Retailers are looking to create more links between physical and more cozy, and less cold. The layout is more online stores. Douglas’ Kreke says that the company is intensifying spacious and consumers can easily find what its e-commerce activity for both Douglas and Nocibé. “We are they are looking for,” comments Marionnaud accelerating the links between distribution channels—online and France ceo Eileen Yeo. As of early March, bricks-and-mortar—to be as flexible as possible,” he says. 10 stores had been refitted and 60 more Douglas launched a Click & Collect service for its stores in will be revamped this year, followed by 60 Germany and now allows consumers to book their appointments locations in 2016. for beauty services online. Sephora, too, plans to launch a Click & Douglas, meanwhile, is innovating with new Collect service at its French stores this spring. Meanwhile, Ici Paris retail formats. It launched a new concept in XL, owned by AS Watson, launched its Click & Collect initiative four November 2014 at two stores, in Dusseldorf years ago. The retailer says that although the service was meant to and in Warsaw, . The boutiques have a drive traffic to its stores, feedback from the chain’s beauty advisors stronger Douglas identity in terms of visual show that it is not always easy to upsell to these customers, as merchandising and a focus on younger, trendy when they pick up their purchases they often are not in the frame brands, such as Urban Decay. The new concept of mind to spend time looking for new products. Some 5% of the also includes a feature called Catwalk, an retailer’s customers who buy online select this delivery method, area where new launches, promotions and according to the retailer. UK-based The Perfume Shop, meanwhile, special offers are prominently displayed, the has launched its same-day delivery service in 90 minutes or less. retailer says. n n n

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 11 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL DemiPage-210x148NEW.indd 1 Insight (37m n shop conceptwithinadepartmentstoreinGermany.InJanuary,itopened400ft pressure onbrands,whicharealreadypayingforthespacetheyoccupyinstore. owned byLVMHstablemateKendoBrands. retailer isalsodevelopingthepresenceofFormulaXandKatVonDbrands,whichare with jewelrybrandShouroukthisspring.Althoughnotstrictlyprivatelabel,inEurope,the the rightbalancebetweenthesetwocategories,”Kreketells our customersalsoexpectattractiveproductsfrommajorbrands.Ourchallengeistofind Douglas aspecificprofilethatsetsusapartandcontributestoconsumerloyalty.However, will remainanimportantfactorforsuccessperfumeryretailers.Theseoffersgive Germany, whereitopenedonestoreattheendoflastyear.“In-housebrandsareand Two doorsopenedinFrance2014andDouglasiscurrentlytestingtheconcept its private-labelofferandwalk-inbeautyserviceslastyear,calledLesBellistabyNocibé. private-label lines.Nocibéopenedwhatismeanttobecomeachainofstoresdevoted and fashionretailstores. range ofproductsandservices.Itplanstoexpandtheconceptotherdepartmentstores European perfumeries Private labels’ lower prices may bring consumers to the stores, but it also puts more Private labels’lowerpricesmaybringconsumerstothestores,butitalsoputsmore Sephora hascreatednewpartnershipswithinitsprivate-labelbusiness,suchasatie-up In addition to new concepts, the major perfumery chains continue to focus on their In additiontonewconcepts,themajorperfumerychainscontinuefocusontheir Distribution atallthe major international events In-depth coverage of the global beauty market Douglas isalsolookingtopartnerwithotherretailersandlauncheditsfirstshop-in- 2 ) store in Ahrens department store in Marburg, north of Frankfurt, which offers a full ) storeinAhrensdepartmentMarburg,northofFrankfurt,whichoffersafull Boost your international business with BW Confidential Worldwide Bologna Elements Showcase NewYork ...TFWA WorldExhibitionCannes Free ShowoftheAmericas Orlando New York • BeyondBeautyParis • CosmoprofAsiaHongKong > [email protected] • ChinaBeautyExpoShanghai • MondialSpaBeauté Paris • • BeautyWorldMiddleEastDubai LuxePackShanghai • IntercharmMoscow • PittiFragranzeFlorence BW Confidential. BW beauty industry on theinternational The insideview • HBAGlobalExpoNewYork Duty • • InCosmeticsParisLuxePack TFWAAsiaPacific Singapore... • BWCONF_oct2013-def2.indd 1 Global market analysis Insight: Fragrance the CIVETs Data, digital& Travel retail business inthecountry The ins&outs ofdoing Market watch:Brazil Interview Michele Scannavini Coty ceo www.bwconfidential.com luxury trendsfor2014 Sector outlook& Packaging ExsenceMilanLuxePack n 2 The insideviewontheinternationalbeautyindustry • N°16 November-December 2013 PCDParisCosmoprof ISSN: 2104-3302 24/09/13 18:00 • BWCONF_fev2014.indd 1 MakeUpinParis Doing colorbetter Insight: Make-up to reachthem How theyshop&how Brazilian travelers Travel retail: Argentina &Colombia? What’s nextforMexico, Market watch: Interview Laurent Boillot Guerlain ceo www.bwconfidential.com & trends Decoration techniques Packaging The insideviewontheinternationalbeautyindustry N°17 March-April 2014 ISSN: 2104-3302 06/02/14 15:16 BWCONF_septembre2014.indd 1 What’s nextfortheindustry? Insight: fragrancecreation Travel retail:Europe The potential&challenges Market watch:Africa the continent’s topairports How theregionisfaring& the nextbigregionforbeauty Interview Luciano Bertinelli Ferragamo Parfums ceo www.bwconfidential.com are evolving How make-up packs Packaging of The insideviewontheinternationalbeautyindustry N°19 September-October 2014 ISSN: 2104-3302 22/07/14 12:04

07/08/14 11:34 Store visit

Yves Rocher opens Botanical Beauty Lab The brand is testing new features and designs in its latest retail concept

rench brand Yves Rocher opened a new store concept in Boulogne, a suburb of Paris, Fin January. Called Botanical Beauty Lab, the store is conceived as a test bed for new retail features and services and was designed by French agency Workshop. “This store is a way for us to experiment with new concepts that we can then integrate into our retail network, but it won’t necessarily be replicated in its actual form,” an Yves Rocher spokesperson tells BW Confidential. The store was designed to reflect the company’s natural roots, with materials including cork, glass and birch wood. The brand name is also a central part of the design, which features Y-shaped furnishings and lighting fixtures. In the center of the store is the Trylab, a Y-shaped table where shoppers can test and play with new products, or receive a quick makeover or skincare diagnosis from a sales advisor. Make-up takes a central space in the store, with a large mural on the right-hand wall, at the end of which a Beauty Bar offers manicures and other hand-care services. Yves Rocher’s fragrance heritage is also highlighted; a perfume organ presents 12 vintage-looking glass vials containing the ingredients most used in the brand’s fragrances, including essence of bergamot, vanilla absolute and patchouli. Consumers can sample Botanical Beauty Lab each ingredient and learn more about which ingredients are used in each of the l Opened: brand’s fragrances. January 2015 Personalization is also part of the Botanical Beauty Lab concept. A gift bar is placed near l Location: Boulogne, France the cash register and shoppers can either choose from ready-made gift baskets, or create l Services: Skincare their own sets and wrap them in the gift paper of their choice. treatments, quick makeovers, As well as makeovers and manicures, the store houses a beauty institute whose manicures, hand-care services treatments are displayed in the front window in a light box highlighting the services l Special features: currently on offer. In addition to traditional cash registers, Botanical Beauty Lab is testing Trylab for testing products, mobile checkout. n perfume organ, gift bar

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 13 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Store visit

s Make-up has a central position in the store. At the end of the color mural, a Beauty Bar offers hand-care services

s Trylab, a Y-shaped table (left), is meant for testing new products. Yves Rocher is highlighting its fragrance heritage through a perfume organ where consumers can sample raw fragrance materials (right)

www.bwconfidential.com - March 5 - April 1, 2015 #108 - Page 14 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL BW Confidential The inside view on the international beauty industry

The print magazine The electronic publication

bwconfidential.com

Four times a year Every two weeks News headlines every day

# Subscription order form Please complete this form and return it: • by post: BW Confidential - Subscription Department Subscribe for 2 years and save 20% 4 avenue de la Marne - 92600 ASNIERES France Yes, I want to subscribe to BW Confidential • by fax: +33 (0) 1 53 01 09 79 r 2 year subscription r 2 year subscription with thematic guide • by email: [email protected] €799 or US$1,099 €879 or US$1,199 • the electronic publication (40 issues) • the electronic publication (40 issues) • daily news on www.bwconfidential.com • daily news on www.bwconfidential.com • the print magazine (8 issues) • the print magazine (8 issues) Contact information • the thematic guide (1 issue per year) Company:...... r 1 year subscription r 1 year subscription with thematic guide First name:...... €499 or US$699 €549 or US$769 Last name:...... • the electronic publication (20 issues) • the electronic publication (20 issues) Job title:...... • daily news on www.bwconfidential.com • daily news on www.bwconfidential.com • the print magazine (4 issues) • the print magazine (4 issues) Address:...... • the thematic guide (1 issue) Postal code:...... + Free: each subscription includes full access to the entire contents of BW Confidential’s City:...... archives on www.bwconfidential.com Country:...... Payment method r € r US$ Email (required):...... r CB, Visa, Mastercard/Eurocard l_l_l_l_l l_l_l_l_l l_l_l_l_l l_l_l_l_l VAT number (required for European Union):...... Expiration date: l_l_l_l_l Security code l_l_l_l r American Express l_l_l_l_l_l l_l_l_l_l_l_l l_l_l_l_l Signature & date: 2015 August 31, until 2015 - Offer valid Expiration date: l_l_l_l_l Security code l_l_l_l_l r Please bill me