BW Confidential’’S Next Electronic Issue Is out on January 7, 2016 News Headlines Daily on @Bwcbeautynews News Roundup at a Glance
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www.bwconfidential.com The inside view on the international beauty industry December 17, 2015 - January 6, 2016 #122 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Comment Inside The buzz 2 A year of market shifts News roundup he year 2015 has been a busy one in beauty, marked by a Netwatch 6 Tstring of events likely to have a lasting impact on the market. It was the year that was characterized by major acquisitions. Social media monitor These included what was described as beauty’s biggest deal of the decade: the announcement of Coty’s acquisition of 43 of Interview 7 P&G’s cosmetics and fragrance brands. Another big deal was Lise Watier ceo Pierre Plassard Swiss travel retailer Dufry’s purchase of World Duty Free, hot on the heels of its takeover of Nuance in 2014. Also significant Insight 9 was Unilever’s series of acquisitions in prestige skincare, which Trend outlook included Dermalogica, Kate Somerville Skincare, Ren and Murad. On the retail side, there was private-equity company CVC Capital Partners’ takeover of Store visit 12 German perfumery chain Douglas. Sephora Beauty TIP Workshop, It was also the year that saw beauty players take digital a lot more seriously. L’Oréal San Francisco, US teamed up with US-based General Assembly, a digital training specialist, for the creation of an online learning platform for its marketing employees, while Coty acquired digital marketing firm Beamly. In addition, LVMH appointed former apple executive Ian Rogers as its first chief digital officer. Also in 2015, indie brands continued to see strong growth (partly due to digital initiatives) and more brands—big and small—opened standalone stores. All of this came against a background of a tough economy in key developed markets, slowing growth in emerging countries, turbulence in travel retail and volatile exchange rates. In short, it was a year of much change, and one that illustrates how complex the market has become. We wish you a peaceful and prosperous New Year and we look forward to bringing you more news, commentary and analysis in 2016. Oonagh Phillips Editor in Chief [email protected] BW Confidential’’s next electronic issue is out on January 7, 2016 News headlines daily on www.bwconfidential.com @BWCbeautynews News roundup At a glance... n Troubled times at Avon n Tengram Capital invests in Cos Bar The buzz n Catterton completes Steiner Leisure acquisition n Unilever divests ethnic haircare brands Stay informed with our daily news headlines on www.bwconfidential.com Strategy It has been a busy couple of weeks for Avon. Following news reports that the ailing firm is preparing to sell off its North American business as well as a minority stake in the parent company to Cerberus Capital Management, the company’s chairman received an open letter from a group of activist investors criticizing its recent strategy, management team and reported divestment plans. Avon issued a statement following the publication of the letter from Barington Capital. “We remain focused on taking strategic actions to drive sustainable, profitable growth, address changing and challenging industry dynamics, create opportunity for our representatives and enhance value for all Avon shareholders,” Avon said. “This includes the actions we have taken and continue to take to drive improved performance in the North American business.” In its letter, Barington Capital called for the company’s senior management to be replaced, criticizing current ceo Sheri McCoy as a “poor choice.” It also said it would oppose any sale of Avon’s North American activity, as well as the sale of an equity stake if terms were disadvantageous. Chemical industry leaders DuPont and Dow Chemical have announced they are to combine in what they call a “merger of equals”, creating a joint company called DowDuPont. They then plan to spin the combined firm off into three independent, publicly traded companies specializing in agriculture, material science and specialty products respectively. DuPont’s Performance Materials business, which includes its Surlyn material used in beauty packaging, would become part of the new material science activity. The all-stock merger is expected to close in the second half of 2016, subject to regulatory approval, with the spin off scheduled to take place within two years of completion. Tengram Capital Partners is expanding its presence in the beauty space. The private- equity firm has made an investment in US-based specialty store chain Cos Bar. The high- end retailer, which launched in 1976, has 14 stores in affluent locations offering skincare, make-up, fragrance, bath and body, haircare and men’s products as well as tools and accessories from luxury and niche beauty brands. The investment is expected to help Cos Bar grow its store footprint as well as expand its omnichannel and digital offer. Tengram’s other beauty investments include Laura Geller, Nest Fragrances, DevaCurl and This Works. n n n www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 2 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL News roundup n n n US private-equity firm Catterton Partners has completed its acquisition of beauty and wellness firm Steiner Leisure. Affiliates of Catterton have now acquired all outstanding shares in Bahamas-based Steiner Leisure for approximately $925m, including assumption of debt. Steiner Leisure’s portfolio includes skincare brands Elemis and Bliss. The buzz Anglo-Dutch consumer-goods firm Unilever has sold off its Motions, Just for Me, Consort and Groom & Clean hair care and men’s grooming brands, as well as the TCB brand in Africa, to multicultural haircare specialist Strength of Nature for an undisclosed sum. The company said it remains committed to the ethnic haircare and men’s grooming categories, and believes the brands will be able to fulfil their potential under the new owner. “We will continue to focus on the specific needs of both multicultural and male consumers with our global brands,” said Unilever North America president Kees Kruythoff. US-based flavor and fragrance company IFF has undergone a corporate rebrand, unveiling a new website, visual identity, purpose statement and tone of voice. IFF says that the new branding initiative, which is based on its 126-year history and “commitment to discovery and pioneering firsts,” specifically supports the commercial excellence pillar of its Vision 2020 business strategy. The new branding will flex to include recent acquisitions by IFF, the company said, the latest of which was cosmetics ingredients producer Lucas Meyer Cosmetics. Germany-based Symrise has launched a mobile app for its fine fragrance genealogy tool, which it describes as a “family tree of fragrances.” The app enables users to access details of the most popular fragrances over the past 40 years. Fragrances are grouped into masculine and feminine categories and the nine fragrance families. Consumers can use the alphabetical index or direct search function to find a fragrance, and can add preferred scents to their favorites and share them via email. BW Confidential US-based packaging firm WestRock has announced the acquisition of folded carton and 4 avenue de la Marne litho-laminated display packaging manufacturer Cenveo Packaging. 92600 Asnières sur Seine, France [email protected] Cenveo Packaging, currently owned by Cenveo Inc, has six facilities in North America Tel: +33 (0)1 74 63 49 61 Fax: +33 (0)1 53 01 09 79 and registered revenues of more than $190m over the past 12 months, WestRock said. www.bwconfidential.com The activity will be added to WestRock’s consumer packaging activity to broaden its ISSN: 2104-3302 Publisher: Nicolas Grob offer. The transaction is valued at $105m and is expected to close early in 2016, subject to Editorial Director: Oonagh Phillips [email protected] regulatory approval. Editorial Coordinator & Assistant: Katie Nichol [email protected] Contributors: Sophie Douez, Alex Wynne, Results Renata Ashcar, Mayu Saini, Raphaëlle Choël, Corinne Blanché, Naomi Marcoulet Subscriptions 1 year: electronic publication (20 issues) + US specialty beauty retailer Ulta saw a 22% rise in sales in the third quarter ended print magazine (4 issues) + daily news: €499 or US$699 October 31, to $910.7m. The sales increase was driven by double-digit traffic growth, [email protected] the company said. Comparable store sales rose 12.8%, driven by 10.6% growth in the Advertising [email protected] number of transactions and 2.2% growth in the average ticket size. BW Confidential is published by Noon Media 513 746 297 RCS Nanterre Ulta opened 45 new stores in the quarter, ending the period with 860 branches. Its Copyright © 2015. All rights reserved. e-commerce sales for the period rose 56.3% to $46.2m. Ulta is predicting a sales increase Reproduction in whole or in part without permission is strictly prohibited. of between 15% and 18% for the fourth quarter. n n n www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 3 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL News roundup n n n Retail French fragrance brand Atelier Cologne opened a new boutique in Paris in December 2015, its third in the French capital and its sixth worldwide. Located at 2 2 The buzz 38 Rue du Bac, the 50m (538ft ) shop features the brand’s signature Venetian blue storefront and industrial décor. There is also an engraving workshop, where consumers can have a leather pouch for a travel spray engraved with a name, initials or message. The store stocks Atelier Cologne’s entire product offer. Atelier Cologne also unveiled a new fragrance collection, Collection Orient, which comprises five fragrances and is set to launch in spring 2016. The fragrances are priced at €165 for 100ml and €240 for 200ml, with a coffret comprising a 200ml fragrance, a 30ml rechargeable travel spray and leather case selling for €265. Data Make-up palette sales in Europe % change Nov 2015 vs Nov 2014 Sales of make-up palettes in Europe delivered a mixed performance in November Country % change 2015, according to data from market-research company NPD.