#385 / April 6-12, 2009 www.CosmeticNews.com Beauty industry weighs up big pay packets

INSIDE THIS ISSUE vote by the US Congress last financial services, we can predict pay practices will week to rein in salaries and change because their pay level is so much higher INTERVIEW Abonuses paid to employees of than in other industries,” says Lupo. “But financial institutions receiving govern- in areas like the cosmetics industry, pay levels Friedrich Kroos, Jafra ment bailouts has trained the spotlight aren’t necessarily higher than in other industries; page 3 on executive pay, and beauty industry the reasons to change are more subtle.” executives are coming under scrutiny. Jung, who is widely credited with Joaquín Bueno, Notifications filed with the US driving a turnaround at Avon in recent Sephora Spain Securities and Exchange Commission years, saw her total compensation pack- page 9 (SEC) reveal that Fabrizio Freda, the age jump 76% in 2008—a year when the incoming ceo of The Estée Lauder company’s share price dropped 39.2% Companies (ELC), is eligible to receive and which was followed by the February BUSINESS $12.5m in salary, bonuses and stock announcement of up to 3,000 job cuts, Falic sells Urban Decay options in his first year on the job. as well as salary and hiring freezes. page 4 Meanwhile, an analysis of an Avon In the case of P&G chairman and ceo Products proxy statement by The AG Lafley, who received a $3.5m bonus Players react to new Associated Press news agency estimated in February for his role in the 2005 chairman and ceo Andrea Jung’s total acquisition of men’s shaving brand EU rules 2008 compensation package at $19.6m. Gillette, the “onus of the bonus” is more page 4 While such packages may have easily identifiable. “The Gillette deal was seemed unexceptional a year ago, good for P&G from a number of standpoints— CITY FOCUS they now come at a time when both bringing new brands into the fold, adding signif- Johannesburg, South Africa companies are slashing jobs and trad- icant overseas distribution, bringing skills in con- page 5 ing at heavily reduced share prices. sumer trade-up and merchandising,” notes Both ELC and Avon declined to com- Morningstar chief operating officer for ment when contacted by CosmeticNews. equity research Lauren DeSanto. RETAIL According to the Avon SEC filing, “Certainly high payouts now are especially grat- AS Watson grows in 2008 executive compensation at the com- ing to shareholders given the underperformance page 9 pany is reviewed annually and bench- of P&G’s stock. [But] it’s important to recog- marked against a peer group of 12 nize, given the current environment, how well PRODUCTS beauty and consumer goods compa- run and financially sound P&G is.” nies including ELC, P&G and . Lupo believes the current scrutiny of ELC boosts Night Repair Peter Lupo, managing director of US- executive salaries will prompt compa- page 10 based compensation consultants Pete nies to more thoroughly review their pay Pearl Meyer & Partners, tells CosmeticNews structures, but notes: “You really wonder that pay levels in the cosmetic sector what will happen once the economy gets better.” are on a par with other industries. “In Sophie Douez with Laure Guilbault

1• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Business

CosmeticNews Weekly PEOPLE Yes to…global distribution a publication Israeli natural beauty brand Yes to Cosmédias SA US beauty company The Estée Carrots is launching on 11 European 2, rue Maurice Hartmann 92133 Issy-les-Moulineaux Cedex Lauder Companies (ELC) has markets, under an exclusive deal with Tel. 33 (0)1 46 29 46 00 announced that Daniel Yarosh will LVMH-owned Sephora (500 outlets). [email protected] succeed senior vice president of The launch, which includes Turkey, Subscriptions: Tel: 33 (0)3 44 62 43 80 research and development world- Italy, Spain and Greece, will offset the Fax: 33 (0)3 44 12 57 73 ([email protected]) wide Daniel Maes when he retires primacy of the US market, which US$38/€30 per issue July 1. Yarosh will take up the position accounts for 70% of Yes to Carrots’ € One year subscription: US$1,585/ 1,250 of ELC senior vice president, R&D, sales. The new Yes to Tomatoes and Chief Executive Officer and Publisher Antoine Duarte basic science research, and report to Yes to Cucumbers lines are currently Products Managing Director Harvey Gedeon, ELC executive vice being launched in the US, where the Jean-Louis Potier Editorial Director president of global research, devel- brand is widely distributed at François Kermoal Editor-in-Chief opment and product innovation. Walgreens, Safeway, Riteaid and Joëlle Diderich Maes, an ELC veteran with 22 years’ Duane Reade drugstores. The San ([email protected]) Product Editor service at the company, will see his Francisco-based brand began interna- Naomi Marcoulet ([email protected]) functions effectively divided into two tional rollout in 2006 and is now Reporters Courtney Traub roles. Yarosh will oversee new fields available in 25,000 points-of-sale in ([email protected]) of research and overall management 28 countries. “The expansion has been very Sophie Douez ([email protected]) of R&D projects including external quick but we want to keep the special feeling Sarah de Castro ([email protected]) research partnerships in the US, of our brand designed to make people happy,” Contributors Europe and Asia, while ELC executive Yes to Carrots founder Ido Leffler tells Paul Richman Correspondents director of research and development CosmeticNews. A Yes to Babies line is Argentina: Muireann Prendergast Australia: Andrea Ferrari Nadine Pernodet will take over man- set to launch in 2010. CB Austria: Hannelore Hecker Belgium: Laurence Mouton aging several of the group’s laborato- Brazil: Renata Ashcar ries. She will report to Yarosh. Prior to P&G sells Johnson Products Canada: Marjo Johne China/Hong Kong: Serena Cheung joining ELC, Yarosh was president at US consumer goods giant Procter & Germany: Mark Ehrman Italy: Corinne Blanché Applied Genetics Incorporated Gamble (P&G) has sold off its ethnic India: Mayu Saini Dermatics, a company with a com- haircare products business Johnson Japan: Raphaëlle Choël Mexico: Ron Buchanan mercial application of DNA repair Products Company to RCJP Acquisition Middle East: Caroline Zerrini Portugal: Ivan Castano acquired by ELC in 2008. Inc, a newly formed entity comprising Russia: Anna Dycheva South Africa: Nadine Schmal several private-equity firms. California- South Korea: Yoo Soh-jung based Johnson Products Company, Spain: Lola Gavarrón, Ivan Castano Switzerland: Beatriz de Candolle STRATEGY which commercializes around 30 hair- UK: Imogen Matthews US: Kavita Daswani, Laure Guilbault, Lois Pasternak care products catering to African- Travel Retail: Kevin Rozario L’Oréal reshapes Luxury Americans, including the Gentle Suppliers: Laëtitia Bonnet-Mundschau European Legislation: Claire Thévenin Products Division Treatment and Ultra Sheen brands, Finance: Elea Prizzi French beauty group L’Oréal has achieves annual sales of some $23m, Copy Editor: Marie Hawksby Production: Thibaut Lefebvre announced it plans to reorganize according to the company. The newly Advertising its iconic Luxury Products division, formed company will continue to Sales Managing Director Carole Dubourg regrouping production and logistics operate as Johnson Products Int’l Sales Manager: Emanuela Treneva in its northern French plants and Company and will be managed by

CosmeticNews.com accelerating the integration of YSL husband and wife team Eric Brown Editor-in-Chief Joëlle Diderich Beauté. The group will build a and Renee Cottrell-Brown, who take Webmaster: Alain Charles Circulation Director 40,000m² global logistics center at on the roles of ceo and executive Nicolas Grob Subscriptions Sales Manager the group’s Roye plant, to be opera- vice president, respectively. Brown Arthur Peys ([email protected]) tional in the second half of 2010. was most recently president of ethnic www.cosmedias.fr Manufacturing of all division brands, haircare firm Pro-Line International CosmeticNews Weekly including Yves Saint Laurent, which (Alberto Culver). Cottrell-Brown also est édité par Cosmédias SA the group acquired last July, will be held executive roles at Pro-Line. CTr 2, rue Maurice Hartmann 92133 Issy-les-Moulineaux Cedex designated to three facilities in RCS Nanterre B.383 160 751 N° de CPPAP 0512 T 79344 Lassigny, Caudry and Gauchy. A RESULTS ISSN 1620-302X fourth unit located in Albesa, Spain Président et directeur de la publication : Antoine Duarte is to be converted into a logistical readjusts forecast Imprimeur : Dupli-Print 2 rue Descartes ZI Sezac 95330 Domont center. As a result of the reorganiza- Japanese beauty company Shiseido Abonnement annuel (42 n°/an) : 1250 € / 1585 US$ tion, 85 employees will be reas- has again adjusted its sales and profit Prix de vente au numéro : 30 € / 38 US$ CosmeticNews Weekly n° 385 signed within the group. SD forecasts for the fiscal year ending daté du 6 au 12 avril 2009

2• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Business

March 31, 2009 “due to an increase in ments on foreign income. Current put US multinationals at a substantial extraordinary losses”, according to a com- US tax regulations allow multination- disadvantage to foreign competitors. pany press release. The forecast for net als to defer paying tax on foreign “It would be like penalizing a winning US income has been revised down by 30% income until it is brought back into Olympic runner by tacking on extra seconds to ¥21bn/$215.9m from a previous fore- the US. Writing as a guest columnist to his time just because he’s American,” cast of ¥30bn/$308.4m issued in late in The Cincinnati Enquirer, Lafley said Lafley wrote. “If the budget proposal to January, when the company released the proposition would have a dra- eliminate tax ‘deferral’ is adopted […] it its third quarter results. Citing contin- matic impact on net income, lead would create an uneven playing field and ued declines in domestic consumer to reduced employment and lower give our foreign competitors an unfair confidence, Shiseido revised its net wages for American workers, and advantage.” SD sales forecast to ¥690bn/$7.09bn, down from the previous forecast of ¥700bn/$7.2bn. Shiseido had already Interview lowered its performance forecasts for the full year in January, in light of Friedrich Kroos Jafra Cosmetics, president & ceo results for the nine months ending 31 December 2008. The company is expected to release definitive full-year Growing Jafra into Europe results in early May. SD art of German direct-sales giant Vorwerk, US beauty company Jafra Cosmetics International is aiming to recapture a strong position in Physicians Formula suffers PEurope after seeing its activity in the region slow for several years. net loss in Q4, full year 2008 Following market leader Avon, Jafra is one of North America’s leading names in Pointing to a rapidly deteriorating direct-sales cosmetics, with a significant brand awareness among US commu- US economy and tight retail invento- nities including Latinos, who tend to be strong patrons of the channel. With ries, US-based beauty brand newly nominated president and ceo Friedrich Kroos at its helm (see Physicians Formula Holdings Inc CNW#379), Jafra, which had sales of $520m in 2007, is also targeting emerging recorded a Q4 net loss of $24.5m markets including Latin America and Asia. Kroos tells CosmeticNews about the compared to net income of $4.9m company’s priorities in 2009. Below are excerpts. in the prior-year period. During the full fiscal year, ended December 31 What are your strategic objectives for Jafra this year? 2008, the group posted a net loss of Key objectives for this year are to focus on growth in the US and in Europe. After $19.8m, down from $8.7m in fiscal [several] years in which we struggled a little bit in Europe, we’ll be coming back 2007. The manufacturer of makeup to growth again. We had some declines in Germany over the last few years, and and skincare products designed for in Switzerland. We have established new strategies and programs for our sales sensitive skin said results were hurt consultants in the past year. There has never been a particular need for product by reduced orders for new products development in Europe [as these are already strong]—the problem was how to from retailers. Physicians Formula support our sales consultants there. We are working to re-establish the kind of saw its net sales slide 16.7% in the growth we had in the past in Europe—10 or 15 years ago it was much stronger. fourth quarter to $28.2m. Full fiscal year sales climbed 2.2% on year to What other markets are you planning to strengthen or enter in the coming year? reach $114m. Citing market In terms of existing markets, we opened Brazil last August and that market has researcher ACNielsen, the company been doing very well, and we expect to develop Russia as well. Russia is a new said it made market share grabs in business for Jafra—we launched there in 2006, and it is a market we’re concen- the masstige category for the 52- trating on. It’s a very young market […] and it has enormous potential. Next week period ended February 21, year we have a plan to enter Asia. Within Asia Pacific, a division [of Vorwerk] is 2009, rising 1.3% to an 8% share. CTr already doing door-to-door sales with high-ticket items. We have to see what approach we’ll take with Jafra. We have some countries in mind but I prefer to NORTH AMERICA wait until plans are more firmed up [to confirm].

Lafley blasts Obama tax plans Some suggest direct sales is benefiting from the rough US economy. Do you agree? AG Lafley, chairman and ceo of US The last few years did not provide such an easy environment for Jafra, [but] we consumer-goods giant Procter & started several new programs [in the US] last year and we’ve predicted double- Gamble (P&G), has blasted a budget digit growth for the market [in 2009]. Our programs are focused on gaining more proposal by US President Barack market share and getting more consultants in. We want to double the number Obama’s administration that would of our consultants from more than 50,000 in the US [today]. I strongly believe repeal or limit the ability of US multi- this crisis will give us opportunities. national companies to defer tax pay- Courtney Traub

3• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Business

eration of loyal fragrance lovers for the ride,” STRATEGY president Rochelle Bloom said in a statement. Falic Group sells Urban Decay CTr

rivate-equity firm Castanea Partners has bought a majority stake in US TRADE NEWS niche beauty brand Urban Decay from travel retailer Falic Group. Financial Pterms of the transaction were not disclosed. Urban Decay was bought by French authorities pull stocks Falic in 2003 from French luxury group LVMH. of Bioderma cream Castanea, which is venturing into the beauty sector via the buyout, said in a French beauty group Laboratoire statement it plans to strengthen Urban Decay’s product line and launch the brand Bioderma has seen stocks of one of in new markets. The company’s existing management team, including general its popular anti-stretchmark products manager Tim Warner, co-founder and executive creative director Wende Zomnir, removed from shelves in France by and worldwide retail sales director Eric Jimenez, will remain in place.“Castanea was consumer health and safety authority interested in Urban Decay because of the brand’s potential internationally,” Eric Jimenez tells Afssaps, after the agency received CosmeticNews. “We are not turning over the brand to Castanea; they are in place to support our complaints of minor skin irritation proven efforts and strategy and accelerate them with long-term support financially,” he says, from consumers. Afssaps said it adding that one primary goal is to boost consumer recognition in Asia and Europe. decided to remove all stocks of Steve Berg, partner at Castanea, says Urban Decay was an ideal pick Bioderma’s anti-stretchmark cream because of its distinctive image and loyal consumer base. “We’re not as interested ABCDerm Maman Vergetures with in mainstream brands,” he says. expiration dates prior to October Courtney Traub 2011, as a “measure of precaution” after receiving five complaints from pregnant women who had used TRADE NEWS the cream. The agency said the issue is currently being investigated. Players react to new European Laboratoire Bioderma was not imme- Cosmetics Regulation diately available for comment. CTr I

ollowing the European Parliament’s March 24 vote on the Cosmetics OBITUARY Regulation, which will replace the current Directive (see CNW#384), new Fmeasures on nanomaterials were given widespread press coverage, but Naz Toloui, vice president of sales other aspects are expected to have a strong impact. Many cosmetic players see and education at French beauty the advantage of the new regulation’s uniform application in all 27 Member brand Orlane Paris, died of cancer States—until now each country was responsible for transposing the Cosmetics March 24. She was 44. Toloui, who Directive. “In globalized markets, we can only delight in the adoption of a single European joined Orlane in 1996 as account Regulation, whose provisions will be interpreted in the same way EU-wide,” a spokesperson coordinator, was later promoted from French ingredients supplier Alban Muller tells CosmeticNews. Jean-Louis national training manager, before Pierrisnard, director R&D at Occitane, is also optimistic: “The new Regulation is a being named vice president of sales guarantee of safety for the consumer, as it provides a streamlined, harmonized framework for all.” and education in February 2007. She Consultant Pierre Perrier of Essential Consulting says that while the new was based at Orlane’s California, US Regulation is flawed, it represents progress. “Misgivings aside, it is a well-balanced text office. “Naz was one of the most loyal, that has been improved and updated.” However, “the new safety assessment requirements will dedicated, enthusiastic and successful Orlane compel the industry as a whole to revise all its [product safety] dossiers in 42 months, which employees I had ever met not only for the is a tall order in economic terms,” he warns. “It’s a sound measure, but involves a lot of work.” US, but for the entire world,” Orlane Paris Claire Thévenin general manager of the Americas Luigi Rivetti said in a statement. “She left an incredible impact on everyone with her AWARDS ceremony on May 27 in New York City, energy and professionalism. She will be US. Jacobs won the FiFi Fragrance of the greatly missed.” Toloui, who was born FIFI again lauds Jacobs Year Award last year for bestselling in Iran, was actively involved in US industry body The Fragrance scent Daisy by Mark Jacobs. “Marc’s con- several human and women’s rights Foundation FiFi has selected US fash- tribution to the fragrance industry started with campaigns, notably with association ion designer Mark Jacobs as the recipi- his very first signature fragrance […] He has Afghan Hands. Donations can be sent ent of its annual Hall of Fame award, to built a fragrance brand with a broad appeal to www.afghanhands.org in honor of her be presented at the 2009 FiFi Awards and brought along with him a whole new gen- memory.

4• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com City Focus: Johannesburg

Johannesburg, South Africa As South Africa’s economic powerhouse, Johannesburg is a major hub for beauty retailers

sprawling metropolis with a comprise over 50,000m² of retail space, changing, however, as previously dis- population of over nine million 200,000m² of office space, not to advantaged communities join the Apeople, Johannesburg is South mention five hotels, including the chic ranks of the middle class and the Africa’s financial capital and the single- Melrose Arch Hotel, and hundreds of affluent. In fact, the business gener- largest contributor to the gross domes- luxury apartments. With retail space ated by South Africa’s emerging black tic product at 16%, according to market- leasing at an average of R550 per middle class has become a very research firm Statistics SA. As an square meter, Melrose Arch is already important market in all retail sectors, undisputed African economic power- 95% leased out. Anchor tenants including beauty. house, shopping here is serious busi- include domestic department-store ness, as evidenced by the city’s many giants Woolworths and Edgars, who are Niche trend set to break through monolithic malls, as well as the smaller introducing completely new flagship Kerry Evans, brand manager for ELC- strip shopping centers that dot the concepts, according to Borsato. MAC owned brands Jo Malone, Bobbi Brown urban landscape—some still under Cosmetics, Metropolitain Cosmetics and La Mer, says the beauty market construction or undergoing expansion. and L’Occitane are among the beauty here is evolving. There is the distinct retailers who opened doors in Melrose presence of tried and trusted brands, Secure open-air retail areas prosper Arch last month. but niche brands are also on the rise as Though the city generally boasts beau- consumers get ever-savvier. “The tiful weather, there is very little street- High-end retail makes its mark Johannesburg shopper is globally knowledgeable, level shopping. With rising rates of The preponderance of malls attests to informed of new product lines, product innovation violent crime that show little signs of the diversity of the many metropoli- and technology and seasonal makeup trends. abating, shoppers tend to feel safer in tan areas that make up Johannesburg. She demands to be served according to her closed-in malls guarded by armed The Johannesburg city center itself is international expectations.” Evans says. security. “In most places one talks about loca- chaotic and congested. Efforts are Even in these economically uncer- tion,” says Wilfrid Moulin, founder underway to restore it to its former tain times—in the last six months of South-Africa based beauty distribu- glory, but in the meantime, action has alone the rand has dropped more tor Metropolitain Cosmetics. “In moved to what is known as the than 40% against the dollar, surging Johannesburg, however, it’s all about security. Northern Suburbs, epitomized by past R11/$1 at one point—cosmetics The Sandton City mall in suburb Sandton. Residents in these areas do is expected to weather the storm rel- Sandton’s business district, built in the their shopping at Sandton City mall atively well in Johannesburg. “I feel 1970s, as well as Hyde Park, Eastgate, and at Nelson Mandela Square, where women will always shop cosmetics, in good or Cresta and the new Maponya mall in practically all the major chains, includ- bad times. It is the ‘feel-good’ they are after, Soweto, are examples of shopping cen- ing Edgars, Clicks and Woolworths, and they will expect to find this in the service ters designed with what Moulin calls have flagships. Luxury standalones ethic of the consultant, their product knowl- “bunker mentality”. In contrast, Nelson including Gucci, Bally and Patek edge and their recognition of the customer’s Mandela Square, adjacent to Sandton Philippe can also also be found at worth,” Evans comments. City, and Rosebank, a cluster of shop- NMS. The smaller, compact Hyde Park Bambina Wise ping centers, have indoor and outdoor Shopping Centre nearby is home to retail areas. Melrose Arch, a new more exclusive multibrand boutiques secured urban development scheme, purveying high-end designer CONTENTS* which includes the Piazza retail area, such as A2 and Wizards, and beauty is • The city at a glance: promises an open-air, pedestrian- represented at luxury retailer Aspley An overview of beauty friendly approach to shopping. House and pharmacy Galleon. distribution in Johannesburg “Melrose Arch is a completely secure Although black Africans account • Retail tour: A closer environment, a city-within-a-city, multi-pur- for 73% of the population, the legacy look at the retail scene pose and vibrant,” says Donovan Borsato, of apartheid in South Africa means • Key retail contacts leasing agent for Retail Africa, which that the white minority continues to * Log on to CosmeticNews.com for oversees the Melrose Arch develop- enjoy a much greater percentage of the full Johannesburg City Focus ment. When completed in 2012, it will wealth in the country. That is rapidly

5• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com City Focus: Johannesburg

KEY CONTACTS Retail tour RETAILERS: (Check out our Selective Retailers Guide Online) lthough Johannesburg’s beauty retail landscape is dominated by the big department store groups, smaller players have emerged in the last few Edcon Department Stores Division Ayears and their approach to retail in terms of offer, display and service Edgardale, 1 Press Avenue have revitalized the market, prompting chains to up their game. Crown Mines, Johannesburg 2092

Contact: Hugues Witvoet, ceo L Tel: +27 11 4956911 The Establishment [email protected] www.edcon.co.za Holt Edgars, Sandton City Mall, Rivonia corner 5th Street, Sandton Atmosphere: Classic department store setup—spacious, clean and well-lit Edgars Sandton Standout feature: With 380m² of floor space, the beauty department at Edgars is Sandton City Mall, Sandton easily the largest in town. Bobbi Brown and MAC exclusives. Contact: Dragana Kurozovic, Offer: Strong lineup of luxury and prestige brands, including La Mer, , Dior, cosmetics supervisor , Clarins, Issey Miyake, , , . Tel: +27 11 6857000 Positioning: Luxury and prestige, with some masstige www.edgars.co.za Bestselling item: In fragrances, D&G Light Blue for Women, Life for Men; in skincare, Clinique DDML and Resilience Lift Extreme from Estée Lauder. Red Square Sandton What they say: “I think what we really do as the market leader is bring innovation, freshness Sandton City Mall, Sandton and newness to the market with our offer,” says Edgars ceo Hugues Witvoet. Contact: Cindy Murugan, manager Tel: +27 11 6857131 Website: www.edgars.co.za www.redsquare.co.za E-commerce: Yes

Woolworths L Cape Town Head Office The Upstart Woolworths House Woolworths, Melrose Arch, Corlett Drive and Atholl-Oaklands Road, Melrose North 93 Longmarket Street Atmosphere: Contemporary self-service beauty bar environment. Cape Town 8001 Standout feature: Famed for its accessible, value-for-money offerings, this chain Contact: Andrew Jennings store’s new beauty department boasts a hip range of premium-branded interna- managing director, retail tional lines like Sisley, Benefit, Freeze 24/7 and Ren. It also carries its own private- Tel: +27 21 4079111 label beauty range formulated with natural plant extracts and has an excellent [email protected] www.woolworths.co.za selection of niche haircare products like Frederic Fekkai and Philip Kingsley. Offer: Includes La Prairie, Korres, John Allen, Elemis, Dr Hauschka, Sisley, Stuttafords Smashbox, Burt’s Bees, Kiehl’s, Benefit, Ren, Freeze 24/7, Bloom. 5/F Eastgate Office Towers Positioning: Premium and niche, with good-value private label range Bradford Road, Bedfordview What they say: “Innovation, exclusive brands, uncompromising quality and excellent value con- Contact: Liz Ferrett, tinue to be the key drivers of the Woolworths difference. Woolworths has dedicated and professional cosmetics buyer staff in our beauty department who work hard to offer quality service which our customers have Tel: +27 11 8791000 come to expect,” says Woolworths managing director, retail Andrew Jennings. www.stuttafords.co.za Website: www.woolworths.co.za E-commerce: Yes Foschini

Stanley Lewis Centre L 340 Voortrekker Road Parisian flair Parow East 7500 Contact: Sue Ann van der Metropolitain Cosmetics, Hyde Park Shopping Centre, 6th Road, Hyde Park Westhuizen, senior buyer Atmosphere: Minimalist with a hint of French sophistication. Tel: +27 21 9391911 Standout features: An exclusive array of specialist dermatologist skincare www.foschini.co.za brands with a focus on anti-aging. Highly trained beauty consultants offer customers a personalized experience. Truworths Offer: Includes Dr Brandt, Dr Murad, Dr Sebagh, Veld’s, T LeClerc, Talika, Stila, PO Box 600 Make Up Forever, Cinq Mondes, Borba, Zirh, The Art of Shaving, La Colline, Cape Town 8000 Leonor Greyl, Serge Lutens, Smiley, Wellbox, Poiray, Recipe for Men, Nobilis Contact: Micheal Mark, ceo 1942, Parfums DelRae, Patika, Etat Libres d’Orange. Tel: +27 21 4607911 [email protected] Positioning: Niche, cult and high-performance www.truworths.co.za Website: www.metropolitaincosmetics.co.za E-commerce: Yes

6• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com City Focus: Johannesburg

KEY CONTACTS

LLL Metropolitain Cosmetics Gentleman’s club Level 3, North Block Croft & Co, 66 Tyrone Avenue, Parkview Hyde Park Corner, Office Towers Atmosphere: Genteel and so British. Jan Smuts Avenue, Hyde Park, Standout features: A unique gentleman’s purveyor, the only one of its kind in Johannesburg Contact: Wilfrid Moulin, founder, Johannesburg. Service is extremely personalized, often extending to home Tel: +27 11 3256198 deliveries and opening off-hours for preferred customers. wilfrid@metropolitain Offer: Lorenzo Villoresi, Hierbas de Ibiza, Acqua di Biella, Truefitt & Hill, The Art cosmetics.com of Shaving, Santa Maria Novella, D.R. Harris and L’Artisan Parfumeur, all displayed alongside luxury men’s clothing and accessories like Vilbrequin swimwear, Jack Dis-Chem Spade bags and Cohiba cigars. 3 Ohm Street Positioning: Luxury and niche Kya Sands 2164 Bestselling item: Lorenzo Villoresi Contact: Tammy Saltzman, What they say: ““Our business is personal and will stay personal. Our customer is cosmetics area buyer and manager moneyed but low-key, sophisticated and educated when it comes to fragrances and grooming. Tel: +27 11 7089500 He looks for scents that are not easily recognizable, yet recognizably ‘him’,” says Croft & Co www.dischem.co.za owner Grant Ravenscroft. WHOLESALERS /DISTRIBUTORS Website: www.croftandco.co.za E-commerce: No Prestige Cosmetics Group (Chanel, Guerlain, La Prairie, Dior, Gaultier, Issey Miyake, Bvlgari, Steeped in tradition Van Cleef & Arpels) Apsley House, Hyde Park Shopping Centre, Hyde Park Marlboro Gate, Hyde Park Lane Atmosphere: Sumptuous, rarefied, with a strong European sensibility. Hyde Park 2196 Standout features: A big four-poster bed dressed in linen adds to Contact: Stuart Ireland, managing Apsley House’s country estate-feel decor. Shelves flankthe walls brimming with director, Johannesburg Office Acqua di Parma and Floris beauty products Tel: +27 11 3250481 / +27 82 3755190 Offer: Acqua di Parma, La Côté Bastide, Penhaligons, L’Artisan Parfumeur, Etro [email protected] and Cire Trudon candles sold alongside homeware and accessories such as William Yeoward crystal and china and sleepwear by Little Joe. R&R Marketing Positioning: Luxury and niche (Bloom, REN, Freeze 24/7) What they say: “What we have is an extremely exclusive offer sourced directly from the Unit 3, Island Bridge Park European fashion capitals,” says Apsley House owner and buyer Lauren Abelheim. 23 Island Circle, Riverhorse Valley Website: None Business Estate 4017, Kwa-Zulu Natal Contact: Andy Grobler, managing Bold and bright director cosmetics Red Square, Sandton City Mall, Rivonia corner 5th Street, Sandton Tel: +27 31 5696789 [email protected] Atmosphere: Compact and contemporary. www.rrmkt.co.za Standout feature: Although it is an offshoot of its parent store Edgars, Red Square has forged its own distinct identity. International prestige and masstige ASSOCIATIONS brands are well-represented, be it in skincare, cosmetics or makeup. A new service has just launched, called Color You Right, in which customers are assisted Cosmetics, Toiletry & Fragrance by specially trained beauty consultants to find the combination of skincare and Association of South Africa makeup that best suits them. Microtek Business Park Offer: Skincare, makeup and fragrances from Estée Lauder, Clinique, Dior, Clarins, 86 John Vorster Avenue Trind, Revlon, Yardley, L’Oréal and Coty. Randpark Ridge Positioning: Prestige and masstige Contact: Pam Dillon, executive Bestselling item: Dolce & Gabbana Light Blue director Tel: +27 11 7954272 What they say: “As the largest distributor of cosmetics and fragrances in South Africa and, [email protected] for some products, on the continent, Edgars and Red Square offer brand choice and a range of www.cfta.co.za price points for our customers. We have exclusive distribution rights for many popular offerings and our focus is on service,” says Edgars ceo Hugues Witvoet. Log on to CosmeticNews.com for the full Website: www.redsquare.co.za list of Johannesburg contacts E-commerce: Yes

7• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Suppliers

STRATEGY net sales climbed 5.5% on year to bottles, as the aluminium pumps can reach €3bn. The Care Chemicals divi- be thrown away separately—which is NatureWorks eyes new plant sion, which includes specialty chemi- not possible with the usual crimped or Anticipating rising global demand for cals for the cosmetics and personal- snapped ones. The screw-on pumps alternatives to petroleum-derived care segment, reached €1.68bn, are available in different diameters, plastics, US-based biopolymer manu- primarily driven by growth in the with two existing Valois motors (VP4 facturer NatureWorks is eyeing loca- performance ingredients and primary and Replica). “We wanted to offer a pump tions to open a second manufacturing surfactant businesses, Cognis said. that was both luxurious and environmentally unit within the next three years. The The division also benefited from responsible. We have good feedback from company produces Ingeo, a natural increased demand for “green” and nat- brands—which are not necessarily nature- plastic resin made from plants that can ural-based solutions for personal-care focused ones—and commercial projects on be used for a range of packaging appli- and home products. The company nar- hand,” Valois product marketing and cations. Possible locations will be rowed its overall net loss from €120m innovation manager Patrick Bousquel evaluated on projected growth in the in fiscal 2007 to €63m in 2008. CTr tells CosmeticNews. LBM I region and the availability of plant- based feedstock required for Ingeo PEOPLE processing. NatureWorks currently has PRODUCTS one plant in Blair, Nebraska (US). LBM Swiss flavor and fragrance group Valois promotes sustainability has recruited former Mane RESULTS with screw-on pumps Carmita Magalhães as a French dispensing-systems manufac- nose on the company’s Brazilian Care Chemicals boosted by turer Valois (Aptar Group) has team. Magalhães graduated from “green” solutions at Cognis expanded its range of screw-on pumps France’s ISIPCA perfumery academy. German specialty chemicals supplier to offer brands a sustainable develop- At Mane she specialized in men’s fra- Cognis saw sales for its Care Chemicals ment approach. The system allows grances and fruity notes. The appoint- division grow 7.1% in 2008, as global consumers to better recycle their glass ment was effective in December.

PCN385

8• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Retail

RESULTS home, rather than in a beauty depart- location within the complex. “Our ment, he says. Gorgeous already oper- chief standalone in Patio Olmos […] is now AS Watson grows 8% in 2008 ates five standalone boutiques in in a larger site of 400m2, whereas before Despite reporting “worse than expected” Australia. AF it was 120m2,” Juleriaque marketing results in the UK and France, Hong- manager Candela Zamarguilea tells Kong based conglomerate Hutchison SOUTH AMERICA CosmeticNews. The new store features Whampoa registered an 8% increase in five brand-operated treatment cabins. sales for retail division AS Watson in Juleriaque reopens Cordoba Christian Dior, Sisley and Lancôme fiscal 2008. AS Watson, which owns flagship each have their cabin with Estée beauty chains including Marionnaud Argentine perfumery chain Juleriaque Lauder and Clinique, and Givenchy, and The Shop and drugstore relaunched its domestic flagship store Guerlain and Kenzoki sharing two chain Rossmann, reported full-year on April 1 in Patio Olmos, one of the others. The store’s beauty lineup sales of HK$118.49bn/$15.29bn. country’s chief shopping malls in the includes ranges by Helena Rubin- Outside the UK and France, the interior city of Cordoba, in a larger stein, Biotherm and L’Occitane. MP I division saw “improved results” for the year in markets including Western and Interview Eastern Europe, Asia and mainland China, Hutchison Whampoa said. Sephora Spain, general manager Global sales for the group were up 13% Joaquín Bueno on year at HK$348.37bn/$45bn. CTr Selling Sephora in Spain MIDDLE EAST VMH-owned perfumery chain Sephora first entered the Spanish market in 1998. Joaquín Bueno, appointed general manager in April 2008, joined Boots heads to Bahrain Lthe chain in 2004 as director of operations for Sephora Spain and Leading UK health and beauty retailer Sephora Portugal. In his first year as general manager, he has seen sales jump Boots opened its first store in Bahrain 18%, which he believes justifies an optimistic outlook for the year ahead. Below in February at Bahrain City Centre, a are excerpts of a conversation he had with CosmeticNews. prominent shopping mall in the Kingdom. The move into the new How did Sephora Spain perform in 2008? market highlights the retailer’s growing Quite well on the whole, with a particularly good first half. Then, from September regional presence—Boots already has on, sales fell substantially. The Christmas season was worse than in previous years. numerous doors in the neighboring However, we are satisfied with overall sales, which hit €74m, up 18% over 2007. United Arab Emirates. Occupying 180m², Boots Bahrain has a mall-side How many doors are you in? and an outdoor entrance. “The distin- We’ve got 50 Sephora stores and 25 corners in El Corte Inglés department stores. guished store layout furthers our strategy We opened 16 stores and seven El Corte Inglés corners in 2008. We will be oper- and strategic positioning,” says Della Pass, ating a more conservative new store locations policy in 2009. We are looking to a Boots spokesperson. The store offers open up in Granada and La Coruña and boost our presence in Bilbão and promotions and a retail mix tailored to Valencia. We recently closed a store in Marbella because it was outmoded. the Bahraini market, she says. CZ What do you believe are Sephora Spain’s primary assets? OCEANIA All the doctor brands. [In addition], the Benefit Brow Bar is doing well, [as are] two buoyant brands, Bare Minerals and Make Up For Ever. Benefit rolled out in 2006 David Jones gets gorgeous and is faring very well indeed. The brand isn’t stocked in the El Corté Inglés Australian makeup artist brand corners because it has its own counters, but it is in great demand in Sephora Gorgeous Cosmetics has opened its doors. We are confident too that [Israeli natural brand] Yes to Carrots, which is first department-store counter at launching [this month], will be successful because it’s just the sort of stylish, Australia’s David Jones in Sydney. The good-value line our customers expect. 19m² unit is on the lower ground floor of David Jones’ Elizabeth Street store. Do you see many differences between Sephora Spain and Sephora France? Founder and ceo McConnell describes Sephora is the market leader in France, which gives its initiatives greater [media] the new space as “more than a counter”. coverage [there]. In Spain, we’re in third place in terms of doors and sales after “It is an interactive environment that is private Marionnaud and Douglas. To be specific, we are third in the sector, which also and opulent, giving the consumer an exclusive includes Gala and Perfumerías Julia. Bodybell and If are much bigger than us, but experience rather than a sterile one,” he says. offer a mix of selective and mass. 2009 will be a tough year, no matter what, as there Furniture plays a key part in the space are too many perfumeries in Spain. Most are bearing up, however. and allows the consumer to feel at Lola Gavarrón

9• CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Products

able in 17,000 to 20,000 mid-selective SKINCARE doors worldwide. An advertising campaign supporting the launch ELC boosts Night Repair features print visuals shot by Ruud Baan and a television spot which S beauty group The Estée Lauder Companies (ELC) is introducing was directed by Alex Smith. SdC Estée Lauder Advanced Night Repair Synchronized Recovery UComplex, in a major revamp that ELC hopes will lead to a doubling in MAKEUP sales for its biggest skincare franchise. “The new Advanced Night Repair is our biggest launch of the year. It is the centerpiece Freeze 24/7 enters makeup of our skincare strategy,” Estée Lauder worldwide president Thia Breen tells US high-tech anti-aging brand Freeze CosmeticNews. 24/7 will diversify into makeup with First launched in 1982, Night Repair was the first lightweight serum on the the launch of the Freeze 24/7 market. The company since boosted the offer with Advanced Night Repair in Minerals range. The category debut 1991, and with the latest addition ELC is incorporating a new DNA technology will kick off with a makeup kit called called Chronolux which is said to boost the skin’s natural repair and protection The Freeze 24/7 & Glow Basics, processes at exactly the right time. The revamp comes after ELC acquired available in three tones: light, AGI Dermatics in 2008, a company focusing on commercial applications of medium and medium tan. The kit, DNA repair. which retails for $85, contains two The product is slated to launch in July worldwide. It will reach around 2,200 Age-Less Mineral Foundations doors in the US and 15,600 doors internationally, the brand’s full distribution. SPF18, one Bronze-to-Glow bronzing Advanced Night Repair is priced $47.50 for 30ml and $74.50 for 50ml. powder, one Cheeky Highlighter An ad campaign will roll out worldwide from August consisting of print adver- blusher, and two application brushes. tising featuring Estée Lauder face Hilary Rhoda. A TV campaign featuring Rhoda The products are based on Vita- as a “sleeping beauty” and an online campaign are also planned. Nutriplex technology which is said Laure Guilbault to “provide a protective elastic film that holds moisture intact”, according to the company. The Freeze 24/7 & Glow Pupa diversifies skincare offers Basics kits will be available from April at selective points-of-sale in talian beauty brand Pupa Milano (Micys Company) is boosting its skincare the US and Canada. SdC business on both the domestic and international markets. The brand is Icurrently launching three anti-age night facial care products on the Italian HAIRCARE market, as part of its Milk Therapy range which is formulated with milk proteins. In Italy three products will be included in the brand’s newly launched Schwarzkopf introduces new Love Price discounting operation with the new skus retailing at a 20% reduc- home haircolor line tion. The products are usually priced from €20 to €23.50. “The aim is to win Haircare brand Schwarzkopf (Henkel) market share and offer high-quality products at ‘democratic’ prices,” Pupa marketing will launch a new permanent home director Cristina Penso tells CosmeticNews. haircolor line for its mass distribution In other news, Pupa, encouraged by the success in Italy of its Breast Enhancer network, called Essential Color. The cream launched in May 2008, will roll out the product to international markets product is said to include up to 80% starting in Spring 2009. The brand is developing the “volumizing” concept with two ingredients derived from nature. new products: Buttock Enhancer gel and Cheekbone Enhancer cream—priced at Available in 10 shades, Essential €32 each, which will hit the Italian market in April, and international points-of- Color will be available from April sale in spring 2010. “The aim is to make Pupa an all-inclusive cosmetics brand able to meet worldwide, priced at €11.24. Free even the most specific beauty requirements for all women,” Penso explains. from ammonium hydroxide, the Corinne Blanche product includes lychee extract and features berry notes. Also in April, Schwarzkopf Professional, FRAGRANCES tangy citrus women’s juice, while the German manufacturer’s salon collaborated on the men’s sub-brand, is set to globally relaunch Puma launches Urban Motion minty, herbal concoction. The prod- the “core” lines of its salon specific BC Procter and Gamble (P&G) is launch- uct lines each include four EdTs, Bonacure range with new packaging ing a new fragrance duo in April priced from €16 to €42, as well as and new formulas. The revamped called Urban Motion for its sport deodorants, shower gels, an after- lines include Repair Rescue, Color fashion license Puma. P&G worked shave for men and a body lotion for Save, Moisture Kick, Volume Boost with to create the sparkly, women. The products will be avail- and Hair & Scalp Expert. SdC I

10 • CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Product launches

Brand / Product Olfactory family / Function Size Price Launch date Channel MAKEUP FREEZE 24/7 Freeze 24/7 Minerals: April 2009 (US, Canada) Selective The Freeze 24/7 & Glow Basics Kit mineral powder makeup SFP18/multi-product kit with 2 kit $85 foundations 1 bronzer, 1 blusher and 2 brushes/in 3 harmonies

FACIAL CARE ESTÉE LAUDER Advanced Night Repair: with Chronolux technology July 2009 (Worldwide) Selective Advanced Night Repair Synchronized Recovery Complex 30ml $47.50 50ml $74.50 ISSEY MIYAKE L’Eau by Issey Miyake: May 2009 (Worldwide) Selective Le Fluide de L'Eau by Issey Miyake anti-aging face lotion/with kirishima water 30ml €110

HAIRCARE SCHWARZKOPF Essential Color: April 2009 (Worldwide) Mass Essential Color permanent home hair dye without ammonium/in 10 shades 170ml €11.24

WOMEN'S FRAGRANCES CHRISTIAN DIOR J'adore: floral April 2009 (Worldwide) Selective L'Eau J'adore EdC 75ml €71.03 125ml €97.25 L'Eau J'adore Dry Silky Body Oil 100ml €48 L'Eau J'adore Hair Mist 30ml €31.03 ELIZABETH ARDEN Green Tea Exotic: floral, lush April 2009 (US); May (Worldwide) Mid-selective Green Tea Exotic EdT 50ml $27 100ml $37 KENZO PARFUMS Kenzoamour: floral May 2009 (Worldwide) Selective Kenzoamour EdT Floral 40ml €53 85ml €75 MARIAH CAREY Luscious Pink: floral February 2009 (US) April (Worldwide) Selective Mariah Carey's Luscious Pink Deluxe Edition limited edition 50ml $75

PUMA Urban Motion: citrus Urban Motion EdT 20ml €16 April 2009 (Worldwide) Mid-selective 40ml €22 60ml €32 90ml €42 Urban Motion Shower Gel 200ml €12.50 Urban Motion Body Lotion 200ml €13.50 Urban Motion Deodorant Vaporizer 150ml €12.50

MEN'S FRAGRANCES PUMA Urban Motion: fruity, minty April 2009 (Worldwide) Mid-selective Urban Motion EdT 25ml €16 40ml €23 60ml €33 90ml €38 Urban Motion After Shave Lotion 60ml €19.50 Urban Motion Deodorant Vaporizer 150ml €12.50 Urban Motion After Shower Gel 200ml €12.50 UNISEX FRAGRANCES DIPTYQUE L'Eau de Tarocco: orange May 2009 (Worldwide) Selective L'Eau de Tarocco EdC 200ml €90 100ml €70 L'OCCITANE EN PROVENCE Bergamote Tea: bergamot June 2009 (Worldwide) Mid-selective Bergamote Tea EdT 20ml €18 100ml €39

11 • CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com Looking ahead

APRIL 21-23 MAY 17-19 In-Cosmetics Global Spa Summit 2009 SPOTLIGHT Munich, Germany Interlaken, Switzerland Tel: +44 20 8910 7959 Tel: +1 212 716 1199 [email protected] [email protected] Fake tan gets clever www.in-cosmetics.com www.globalspasummit.org ith self-tanning makers investing heavily in APRIL 23-25 MAY 18-20 innovation and achieving better-performing for- Intercharm Professional China Beauty Expo Wmulas, the category is finally breaking away from Moscow, Russia Shanghai, China the “orange streaks” syndrome. With an increasingly sophisti- Tel: +7 495 995 2880 Tel: +49 711 490 890 121 cated offer, combined with growing awareness of the dangers [email protected] beauty@businessmedia of UV exposure and an economic crisis favoring home appli- china.com www.intercharm.net cation, self-tanning has unprecedented potential. www.chinabeautyexpo.biz APRIL 23-25 A dynamic segment CosmoBeauté Vietnam MAY 20-21 “Fake tan” products generated combined sales of €205m in Ho Chi Minh City, Vietnam Luxe Pack New York 2008 in the European markets of France, Spain, Germany, Tel: +603 8023 0820 New York City, US Italy and the UK, according to market researchers Mintel. [email protected] Tel: +1 212 274 8508 Growth was in double digits from 2006 in all markets except www.cosmobeautevietnam.com [email protected] www.luxepacknewyork.com Germany, which saw sales drop, and in France, where APRIL 26-28 growth was flat. The US is also a boon market, accounting for International Beauty MAY 26-28 23% of self-tan launches in 2008. The recession should only Show New York FCE Cosmetique boost the category, Mintel senior analyst Alexandra New York City, US São Paulo, Brazil Richmond says. “We’ve seen people bringing self-treatments into the Tel: +1 212 895 8259 Tel:+55 11 4613 2015 home and with self-tanning it should be the same,” she notes. [email protected] Fax:+55 11 4613 2001 www.ibsnewyork.com [email protected] Apply more liberally www.fcecosmetique.com.br Self-tanners have evolved to offer a host of combined MAY 7-8 benefits like anti-aging and moisturizing, in addition to less Natural Beauty Summit MAY 28 messy application and a more attractive result. Brands like America 2009 FiFi Awards US-based Purminerals are introducing mineral-based self- New York City, US New York City, US tanners, while certified-organic self-tanning lotions are Tel: Tel : +1 646 278 5614 Tel: +1 212 725 2755 appearing on the market from brands including French Fax: +1 212 779 9058 amacino@promo brand H2bio. The category also spans distribution channels, [email protected] salonsusa.com from mass to prestige and medical: Hollywood star Lindsay www.fragrance.org www.naturalbeautysummit.com Lohan is launching a self-tanner called Sevin Nyne at Sephora, while Australian firm Clinuvel Pharmaceuticals is JUNE 3-4 MAY 8-10 developing a drug which it claims stimulates melanin Cosmofarma 2009 Pack & Gift Paris, France production and protects photosensitive, immune- Bologna, Italy suppressed patients from skin cancer. Some expect the drug Tel: +39 2 454 708 208 Tel: +33 4 74 73 42 33 to be embraced for cosmetic purposes if it passes regulatory vanny.ternezi@ Fax: + 49 711 490 890 110 muster. But despite this trend toward diversification for the cosmofarma.com [email protected] self-tanning segment, Richmond says only 5% of products www.cosmofarma.com www.packandgift.com launched in 2008 offered UV protection—an insufficient per- centage given that many are marketed promising a “safe” tan. MAY 11-14 JUNE 7-9 TFWA Asia Pacific Beautyworld Middle East Singapore Dubai, UAE Tackling odorific offenses Tel: +65 6549 7721 Tel: + 971 4 3380 102 Addressing foul smells is another area of innovation. CPL Fax: +65 6549 7566 Fax: + 971 4 3380 041 Aromas has developed patented technology, AromaGuard, [email protected] [email protected] that has been used in products including St Tropez’s refor- www.tfwa.com www.messefrankfurtme.com mulated self-tan range. It claims to effectively remove strong odors associated with traditional products. “AromaGuard MAY 15-18 JUNE 18-19 doesn’t just disguise the odor, but interacts with the chemicals responsible International Beauty Expo Cosmetic Business 2009 for the foul smell to eliminate it,” CPL Aromas group marketing and Kuala Lumpur, Malaysia Munich, Germany brand director Francis Pickthall tells CosmeticNews. Tel: +603 9058 8772 Tel: +49 89 35 40 47 40 Consumers are more willing than ever to self-tan, but they [email protected] [email protected] want to enjoy doing it—and see perfect results. www.elite.com.my www.cosmetic-business.com Courtney Traub

12 • CosmeticNews Weekly #385 / April 6-12, 2009 • www.CosmeticNews.com