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Copyright © 2015 HPCi Media. This publication may not be distributed without prior permission. Business Retail Innovation Brands L’Oréal registers growth The Shilla Duty Free Innoderm chooses Illamasqua in every division and region celebrates 19 new stores Yonwoo to package debuts page 2 at Changi Airport new serum brow gel page 6 page 9 page 10

cosmeticsbusiness.com twitter.com/cb_beautynews 23 February 2015 NEWS Issue 6 Lancôme celebrates 80th anniversary

This year marks the 80th anniversary of L’Oréal-owned cosmetics giant Lancôme – and the brand intends to celebrate in true style with a number of promotional tie-ins. To kick off the year, on 20 February Lancôme debuted an online video – a first for the brand – marking the day before the house was founded. C’eci n’est pas une rose was directed by Thomas Tyman and is inspired by surrealism. Following this, next month Lancôme is due to unveil a coffee-table book written by French author Stéphane Guibourgé. Of course, the brand has a number of product tie-ins TAIWAN CRACKS DOWN ON ILLEGAL planned as well; it is due to unveil a limited edition set of COSMETICS AFTER INVESTIGATION products, while for the first time, The country’s Food and Drug Administration put hundreds of cosmetic products Lancôme will sell its first limited under scrutiny, leading to the discovery of a number of regulatory violations edition exclusive to its website, three original colours of he Food and Drug Administration (FDA) official Wang Te-yuan was reported by the Taipei L’Absolu Rouge, inspired in Taiwan is taking steps to improve the Times to have said: “These products were tested by heritage shades. T labelling and formulations of cosmetics for heavy metals such as lead, arsenic, mercury In July, meanwhile, the brand on sale in the country – and remove products that and cadmium, as well as toxic organic solvents has plans for an evening event contain banned substances. including benzene, dichloromethane, methyl, held in Paris, attended by its

The FDA conducted an investigation in June “ambassadresses of yesterday, last year where it put hundreds of cosmetics The FDA has ordered 16 nail today and tomorrow”, along products, including nail polish, lipsticks and polishes to be removed from shelves “ with individuals that the brand products containing essential oils, under scrutiny. “ believes have helped to shape The results revealed 43 items, of 697 tested in after they were found to contain its image. total, to be in violation of regulations concerning excessive levels of formaldehyde Finally, to close the year, labelling, while 21 of 154 items were found to Lancôme will offer two “super- be in violation of Article 23 of the Statute for methylbenzene and formaldehyde.” The FDA has deluxe objects in homage to Control of Cosmetic Hygiene, which aims to ordered 16 polishes, found to contain excessive fine craftsmanship”. The first is protect consumers from dangerous substances. levels of formaldehyde, to be removed from a new interpretation of the Les The violation of Article 23 can result in one year shelves. Wang is reported to have revealed that Jumelés lipstick, from 1958, imprisonment and/or a NT$150,000 fine. among the 16 polishes, were OPI’s Dramatic Duo while the second is slated to be Some of the offending products tested were set, a Sally Hansen and China Glaze polish. a jewelled edition of La Vie Est found to contain either formaldehyde, lead, The FDA is said to be considering revisions Belle L’Absolu de Parfum. methylene chloride, lead or toluene – all banned to the Statute for Control of Cosmetic Hygiene, Lancôme was founded in 1935 or restricted substances in cosmetics in Taiwan. while it is encouraging the Taiwanese public to by Armand Petitjean. At a news conference in Taiwan, FDA inspect labelling before buying and not to buy Watch the video at Northern Center for Regional Administration from unknown sources. cosmeticsbusiness.com

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GROWTH IN EVERY DIVISION FOR L’ORÉAL ’Oréal's latest results are some of its Consumer Products division, boosted by the strongest to date. In its 2014 annual results acquisition of NYX and Magic in 2014, posted L statement, the cosmetics giant saw net sales an increase of 1.6% in sales. Over in the L’Oréal NEWS reach u22.53bn, up 3.7% like-for-like. Luxe division, sales growth rocketed 7.1% like- Meanwhile, operating profit set a new record for for-like, with the make-up and women’s fragrance the company, representing 17.3% of sales and categories being particularly dynamic. Finally, CONTENTS totalling u3.891bn. in the Active Cosmetics division, sales jumped The company registered growth across all up 8.7% like-for-like, with the Vichy brand Business: Chinese market set to bounce back 4 divisions and regions. L’Oréal’s Professional contributing to growth via its major franchises Products division grew 2.6% like-for-like, in a and La Roche-Posay maintaining growth in all Trends: A preview of next month’s market that the company acknowledged remains regions. SkinCeuticals also met with success both market report on male grooming 5 “difficult”. Hair care is the lead contributor in the US and in new markets. Retail: The Shilla Duty Free to sales growth in this division. Meanwhile, the Read more at cosmeticsbusiness.com celebrates Changi Airport openings 6

Expert Advice: EX1 Cosmetics’ Farah Naz talks strategy and sales 7 Consumers torn between Digital: Chantecaille teams up with Jamie Beck for campaign 8 simplicity and efficiency Datamonitor has revealed that global skin care Innovation: Animal feedstock has cosmetic applications 9 consumers find themselves torn between simplicity and efficiency when it comes to Brands: La Roche-Posay adds multifunctional products such as BB creams. to Anthelios sun care line 10 The report disclosed despite the fact that People: Eastwood for Davidoff 11 the multifunctional trend has a firm place in the The Final Word: John Hamilton market, providing convenient and cost effective explores trust in organic brands 12 solutions, consumers can also regard this simplicity to come at a cost to efficiency. ARDEN NET SALES PLUMMET Jamie Mills, Associate Analyst at Datamonitor, News Editor Lucy Copp Prestige beauty company Elizabeth Arden said: “According to Datamonitor Consumer’s 2014 Reporter Georgia Seago recorded a net sales decrease of 17.2% during the global consumer survey, just over 60% of Freelance correspondents Sarah Cohen, Patricia Mansfield-Devine fiscal quarter ended 31 December. consumers identified the simplicity of using a Production Designer Ross Murdoch On an adjusted basis, net sales totalled single product and better value for money to be the greatest benefits of using a multifunctional Art Editor Sibylla Duffy $346.2m. The net loss per diluted share beauty and grooming product compared with Digital Production Nita Salem was $1.90. only 14% who mentioned efficacy as a key Editorial Director Erika Hatva E Scott Beattie, Chairman, President and Chief benefit.” Commenting upon how this puts Managing Director Colin Bailey-Wood Executive Officer, identified that the company's Chinese and celebrity fragrances businesses additional pressure on brands to reinforce the HPCi Media Limited contributed to the poor results. product credentials of multifunctional products, Unit 1, Vogans Mill Wharf, 17 Mill Street, He said: “Our management team, with the full Mills continued: “As consumers become London SE1 2BZ, UK engagement of our Board of Directors and Rhone increasingly efficacy driven in their purchasing +44 20 7193 1279 Capital, is focused on repositioning our brand decisions, they may be less willing to make this portfolio and cost structure to return our business compromise. Many brands are trying to give Editorial +44 20 7193 9502 [email protected] to sustainable growth and profitability. Fiscal consumers the best of both worlds by Subscriptions +44 20 7193 1279 2015, as we have stated, is a transitional year incorporating active ingredients such as [email protected] as we work to set a strong foundation for the hyaluronic acid, collagen and peptides, which can future. In China, we are making tough decisions assist in enhancing product efficacy credentials in support of a new distribution strategy to drive through their association with the clinical space. a healthier and more profitable business. Premium brands have an advantage through Subscription Details “Aside from this market and the continued being much more established in terms of their The subscription includes full digital access to the decline in sales of our celebrity fragrances, the efficacy credentials and therefore consumers may cosmeticsbusiness.com website, remainder of our business, by and large, perceive it less likely that they will have to as well as the weekly Cosmetics performed as expected during the quarter. Our compromise between efficacy and convenience.” Business News and monthly balance sheet and cash flow metrics continue Interestingly, Mills does not believe that the Cosmetics Business Markets to improve, resulting in $37m in operating cash same pre-conceptions apply when it comes to print magazines. flow for the first half of our fiscal year. Our make-up: “I do think that it’s slightly easier for performance improvement plans continue multifunctional make-up solutions to be perceived ©HPCi Media Limited to drive down costs and improve efficiencies as effective given they are generally used to Articles published in this newsletter may only in our business. Indirect overhead savings remain temporarily conceal imperfections, whereas be reproduced with permission. The publisher accepts no responsibility for any statements ahead of budget through the second quarter, and innovations in skin care have increased consumer made in signed contributions or in those we remain committed to achieving a total expectations of product efficacy, with many reproduce from any other of $40m to $50m of annualised savings.” products positioned as ‘treatments’, ‘cures’ source. HPCi ISSN 2057-1984 media Read more at cosmeticsbusiness.com and claiming long-term beauty benefits.”

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AVON SHAKES OFF POOR Q4 RESULTS NEWS IN BRIEF t was another set of disappointing results for The company also announced its full-year L’Oréal’s acquisition of Niely Avon in its latest statement. The company’s 2014 results at the same time. Total revenue Cosmetics, which was IQ4 revenue slid 12% to $2.3bn, while total declined 11% to $8.9bn, while total units announced in September units fell 3%. Price/mix was up 8%. decreased 5%. Price/mix was up 5%. Overall, last year, has been approved And its workforce took a hit too – active Avon Avon representatives were down 5%, although by the Brazilian regulatory representatives were seen to drop, down 4%, average order grew 5%. authorities and is currently although it seems those buying were stocking up Staying positive, Sheri McCoy, Chief undergoing finalisation. on more, with average order increasing 9%. Executive Officer of Avon Products, said: “While Niely Cosmetics is the Looking specifically at its beauty results, sales progress against our financial goals in 2014 was largest independent hair colour and hair care declined a hefty 14%, but increased 5% in slower than I would have liked, I am pleased with company in Brazil, with a net constant dollars. the sequential improvements we made in several revenue of w140m in 2013. key categories in the second half of the year. We have stronger management teams across our key Swedish direct-seller Oriflame markets and better discipline in executing has announced it has scrapped consistently against Avon’s core processes.” its dividend payment for the Looking ahead, she added: “Going into 2015, remainder of the year, as we intend to build on that momentum. However, a result of its net profits falling to u3.3m from u25m the year based on strengthening of the US dollar, we prior. The company has cited expect the impact of foreign currency on our geopolitical instability in Russia reported results to be significant. We are and Ukraine – two of its core working to mitigate as much of the impact as markets – as a factor behind possible. Avon has weathered emerging market the situation Oriflame finds itself cycles in the past and I’m confident we will do in. The company is said to so again.” be focusing on reducing debt.

New Zealand’s Green MP Mojo Mathers joined forces ESTÉE LAUDER RESULTS SIGNAL with the #BeCrueltyFree “SOLID DEMAND FOR BRANDS” New Zealand campaign Estée Lauder has revealed a 1% increase in to launch a Supplementary net sales for its second quarter ended 31 Order Paper (SOP 044) December, 2014. to ban animal testing The extra 1% saw net sales rise to $3.04bn, of cosmetics through compared with $3.02bn in the prior-year quarter. an amendment to the Animal Welfare Act. Mathers Net earnings for the quarter were $435.7m, while introduced an SOP last diluted EPS increased 3% to $1.13, compared March; however, the ban with $1.09 the year before. was not brought forward Looking at category breakdowns in more to parliament. detail, Lauder performed well in the make-up segment, up 4% on a reported basis to Tanning products for men are the next big Beiersdorf saw organic group $1,176.2m, while hair care and skin care both trend in China, according to Datamonitor. A sales rise 4.7% in the past registered 1% growth, reaching $137.1m and report revealed that Chinese male toiletries financial year, with sales grew at a CAGR of 12.13% compared with increasing 2.3% in nominal $1,274.4m respectively. u 8.44% from 2008-2013. Jamie Mills, Associate terms from 6.141bn However, fragrance was seen to decline, down u Analyst at Datamonitor, said: “Chinese men to 6.285bn. Both business 8% on a reported basis, to $439.7m. In a are following global grooming trends. There segments, consumer and tesa, statement, the company cited lower sales of has been a shift from metrosexuals to the are said to have contributed “certain Estée Lauder fragrances”, as well newly-coined ‘spornosexual’, leading to to the results. Looking ahead, as “certain designer fragrances” as factors behind demands for men to have a hyper-masculine Beiersdorf expects to deliver the dip. However, it said this was partially offset appearance, such as having the physique sales growth of 3-5% in 2015. by the recent launches of Jo Malone Wood Sage of sportsmen or athletes... the belief that Air Products, a US industrial & Sea Salt, DKNY MYNY and Tom Ford Velvet darkening the skin can assist in visually gases company, has Orchid. Fabrizio Freda, President and Chief emphasising the body and muscles is therefore driving interest by men in new announced changes in its Executive Officer, said: “Our successful grooming approaches such as self-tanning network for distributors performance this quarter reflected solid global solutions.” These figures reveal an supporting its active demand for our brands, including a strong opportunity for brands to capitalise on the ingredients and speciality holiday season. Our results further demonstrate trend. However, with skin whitening being polymers business for the our ability to grow despite currency headwinds so firmly ingrained within Asian culture, personal care market. Horn and softness in several countries... Key drivers the concept of darkening the skin may has been named distributor in the southwest, including of our performance were the UK and emerging not appeal to all; but this could create Texas, while Pride Solvents markets, our make-up and luxury brands, and opportunities for other products such as temporary highlighters. Read more & Chemical Co is to be online, speciality-multi and free-standing at cosmeticsbusiness.com distributor in the mid-Atlantic store channels.” and New England states. Read more at cosmeticsbusiness.com

NEWS IN BRIEF CHINESE MARKET SET TO BOUNCE BACK arking the lowest growth rate since 2005, But the Chinese market does not just have to Unilever-owned TIGI has China’s cosmetic market registered a vie with homegrown competition. Approximately entered into a global licensing agreement with Mretail sales volume of ¥172.4bn in 2014. 86% of retail sales volume came from foreign- Texas-based Naterra The figure was revealed in a report by Market funded enterprises. L’Oréal, Estée Lauder and International, to produce, Research Reports, which said the influence P&G were identified as key players that have market and distribute TIGI of factors including the economic slowdown “constantly adjusted brand strategies and Cosmetics. Naterra and TIGI contributed to the decline. intensified the building of channels” in the market. will collaborate on the However, there was an air of optimism among Despite this, there are still some strong domestic development, design and the results: due to an “unceasing release players too; Chinese companies Jahwa and Marubi distribution of its range, of demand from second- and third-tier cities are two examples of those that have embarked which currently comprises products for face, eyes and in China” the cosmetics market is predicted on new projects and readjusted strategies in order lips, as well as tools. to continue to maintain steady growth – to gain ground in the market. it is projected to reach ¥245.3bn by 2017. Shanghai Jahwa embarked on the Qingpu Base A report commissioned by The report went on to provide insight into Removal Project at the start of this year, said RealSelf, an online community specific sectors. Skin care and make-up continue to be worth ¥1.355bn. It is anticipated to be put concerning elective cosmetic to account for the lion’s share of consumption into production in 2018. procedures, has found more in China, with a combined share of 61.2% Meanwhile, Marubi, which focuses on facial skin than 90% of women aged 18-24 of retail sales in 2013. Skin care takes the majority care, is taking great strides after it received are unhappy with at least one body part, compared with 85% of this share, with a proportion of 48%. It appears LCapitalAsia investment from LVMH in 2013. among the 55-64 age range. that the market for male grooming products In 2014 the company announced a cosmetics In addition, the report found that is also on an upwards trajectory, with total retail production and construction project. those wanting to seek help from sales accounting for 4.6% of the market. Read more at cosmeticsbusiness.com a plastic surgeon is on the rise, with one in five saying they are currently pursuing or planning ASEAN ORGANIC MARKET to pursue plastic surgery. TO REACH $4.41BN BY 2020 Coty has announced its Q2 The global organic cosmetics market is estimated results for fiscal year 2015, to grow at a double digit CAGR of 10.4% ended 31 December 2014. by 2020, says a recent report by Future Market Net revenue was flat like-for- Insights, ASEAN Organic Cosmetics – Market like, coming in at $1,259.6m, Analysis and Opportunity Assessment 2014-2020. and decreased 5% on a The ASEAN organic cosmetics market reported basis. Adjusted accounted for US$2.56bn in 2014, and operating income grew to is expected to reach $4.41bn by 2020. The $200.9m, up from $183.3m Avon is to cease operations across 16 in the prior-year period. countries covered in the report are Thailand, Malaysia, Indonesia, Singapore, Philippines and Caribbean nations and will instead focus its Meanwhile, reported net resources on improving its US business. Vietnam. In terms of individual country income was $125.4m, up A spokeswoman from the direct selling from $82.5m in the prior-year. contributions, Thailand represents the biggest giant told The Associated Press that the market potential, followed by Indonesia and then company will no longer accept orders Glass and plastic the Philippines. from places including Jamaica, Haiti and manufacturing company A boom in engagement with digital marketing the Bahamas. Gerresheimer made solid techniques for distribution, building awareness Spokeswoman Lindsay Fox said that the ground in 2014. In its latest through websites and blogs, and high product company will continue to serve eight financial statement, revenues islands, including Puerto Rico and the US u visibility coupled with easy reach out for grew 1.9% to 1,290m, while Virgin Islands. She declined to say how u consumers are expected to fuel market demand. EPS rose 6.6% to 2.11. CEO many sales representatives would Uwe Röhrhoff said the company According to the report, the major factors be affected by the action. hit all of its targets for 2014 and, driving market growth include rapid Avon has been affected by ongoing as a result, “is very well urbanisation, rising disposable income and the financial troubles, but hopes to make positioned for the future”. growing preference of consumers towards health $400m in cost savings by next year. and hygiene products. It also cites increasing The company has cut more than The Indian paper and board awareness about natural products and the 1,500 jobs in various different locations packaging industry was worldwide. However, at the end of last worth Rs584bn in 2014, with growing male consumer segment as expected to influence the demand for organic cosmetic year, Avon still employed more than an annual production of 36,000 employees. 12 million tons, a Canadean products in the region. But it is not all bad news for Avon. At the report revealed. Plastic It highlights that the organic hair care segment end of 2014, it opened its first standalone packaging constituted more is expected to contribute $1.24bn in terms store in Warsaw, Poland, called The Avon than 43% of the total Indian of revenue to the overall ASEAN organic Studio. Katarzyna Szczepa ska, Head of packaging market, worth ń cosmetics market, accounting for 28.2% of the Avon Business Centre Development, told Rs715bn, while metal CBN the store was part of a “multichannel packaging accounted for the total market by 2020. Key companies included in the report are Estée Lauder, L’Oréal, strategy” that it had been building for the third largest share of the past few years in central Europe. Indian packaging market. Weleda and W.S. Badger Company. Read more at cosmeticsbusiness.com

MARKET REPORT PREVIEW

MARKETS FEEL BURN OF SHAVING SALES SLUMP

This week’s Trends page provides a preview of the third issue of Cosmetics Business Markets, which will focus on men's lines. HOW MANY MEN USE MOISTURISING PRODUCTS? The global men’s lines market was worth an estimated US$20.3bn Men in Germany and Spain are more likely to use moisturisers, in 2014, up 5.5% on 2013 (source: Statistica), and Cosmetics creams or lotions than elsewhere in Europe, used by 31% and 28% Business Markets research reveals that countries including China respectively. Only 12% of Russian men use moisturising products. and Brazil have experienced a grooming boom over the past couple 54 of years. Meanwhile, South Korea’s male skin care market has 52 shone brighter than any other. Korean men spend the most per head 47 47 46 in the world on skin care, a collective $635m in 2013, nearly a fifth of 41 the global figure, according to Euromonitor. 37 Even razors and blades rose by 7% throughout both 2013 and 31 2014 in South Korea (source: Canadean), a segment that has 28 declined throughout the US and Europe due to factors such as 22 21 20 rising razor prices and the mainstream ubiquity of the beard. In fact, in many of the same markets that experienced falling sales 12 12 of shaving products – France, UK, Spain, Italy – men’s skin care also declined. Even in Germany, which has the highest usage level of moisturisers in Europe among men, face care only managed to rise by 0.3% in 2014 as shaving preps sank 4.1%, whereas in 2013 face Total France Germany Italy Spain GB Russia care was up 2.5% (source: IRI Germany). Simon Duffy, Founder of Total Male Bulldog, believes the two are connected: “Shaving is an anchor action for the whole sector: if a man shaves he might go on to use % penetration for the 12 months ending September 2014. Includes moisturisers, creams and lotions. a moisturiser. If razors and blades struggle, it has a ripple effect around the rest of the market.” Source: Kantar Worldpanel

NEWS IN BRIEF

Online sales of non-food products in the UK grew 11.7% in January, according to the British Retail Consortium. In January, online sales represented 18.4% of total non-food sales, compared with 16.8% in January 2014. Helen Dickinson, Director General of the British Retail Consortium, noted that the use of mobile devices and stock being listed online helped bolster e-sales.

LS Travel Retail, which operates in more than 30 countries throughout Europe, North America, Asia and the Pacific, revealed that sales increased 11% compared with 2013. The South Korea’s The Shilla Duty Free recently held a grand opening company said 2014 was a year of its 19 new Cosmetics & Perfumes stores across Singapore’s of “strong, rapid expansion” Changi Airport terminals. driven by passenger traffic, the The duty free stores, which opened across the airport’s three integration of acquisitions, and terminals over four months ago, are said to stock 182 brands. the modernisation and roll-out Approximately 80 of these brands are completely new to the airport, of new store concepts. while 26 are reported to be exclusive and unavailable anywhere else in Singapore. Among the brands exclusive to Singapore Avon has identified a new are Aromatica and Jean Louis Scherrer Perfume. Shilla has also breed of UK shopper dubbed introduced more than 35 Korean brands to cater for the increasing ‘the LION’, which stands for demand of such products among Asian shoppers. Approximately Leaders, In-the-know, On- half of these brands are exclusive to Changi, including It’s Skin, the-ball, No-compromise. Whoo and Hera. The offering is said to be the largest collection Avon carried out research of Korean cosmetics brands outside of South Korea. into 2,000 UK shoppers and To accompany and celebrate the official opening of the stores, Shilla is offering special discounts found they are a nation of and free gifts to airport shoppers. In line with the ongoing retail trend for beauty services on the bargain-hunters, who refuse shop floor, Shilla also announced that by June a double-storey outlet in terminal 3 will provide to compromise on quality. facials and beauty consultations. The data showed 76% said Changi Airport saw 54.1 million passengers pass through its doors in 2014, setting a new record. they are quick to pass on their savings tips. US skin care and colour WALGREENS AND MAESA JOIN Missha steps into Germany cosmetics brand Merle Norman FORCES WITH EVA MENDES Cosmetics is due to open US retailer Walgreens and cosmetics South Korean budget cosmetics brand Missha has a refurbished bricks and mortar store in the Oxmoor Center manufacturer Maesa have collaborated with opened its first European store in Ingolstadt, in Louisville, Kentucky, actress Eva Mendes on a range of colour Germany. The new venture is part of the on 6 March, according to The cosmetics called Circa. company’s plans to reduce domestic operations Courier-Journal. Shoppers who The products have been created to appeal and focus instead on European markets. stop by between 6-8 March to the varying needs of a multicultural market, Speaking to The Korea Herald, Kim Hong-tae, will be offered a free steam with shades designed to work across the lightest a PR official at Able C&C, Missha’s parent facial and gift with purchase, and darkest of skin tones together with high- company, said: “The budget cosmetics market alongside the spring collection. performance formulations, rich pigments and in Korea is overly competitive, and has hit the Retailer Neiman Marcus has innovative technologies, at mass market price ceiling. We are going to open several stores debuted interactive retail points, ranging from $8-15. The product portfolio in three European countries, including Germany. tables in its Austin, Chicago encompasses eyes, lips and face, with 133 skus. The store opened early this month, with price and Topanga stores. So far, According to an official statement, the launch points for products including the brand’s popular the tables, which allow users “supports Walgreens’ desire to increase BB Cream at around u10. to browse products, are only accessibility to well-priced, diverse, specialty The move into Germany comes after a rough in use in the store’s shoe beauty offerings”. The range boasts ‘custom start to the year for Missha: in January the brand salon. However, the long architectural packaging with an extensive range unexpectedly shuttered all of its Hong Kong and term vision for the tables is to be able to conduct of both trend-driven and timeless shades’. Circa Macau stores. It then transpired that the transactions, operating as an will launch in top-selling Walgreens beauty doors company owes ‘millions of dollars’ in unpaid additional point of sale. across the US, as well as Walgreens.com wages to more than 100 employees, reported Read more at cosmeticsbusiness.com Hong Kong’s The Standard.

23 February 2015 cosmetics business news 6 Copyright © 2015 HPCi Media. This publication may not be distributed without prior permission. expert advice SETTING A NEW FOUNDATION EX1 Cosmetics has found a niche in the market catering for olive skin tones. Founder Farah Naz talks markets, sales and strategy

What were the business It can be hard highlights for EX1 in 2014? to effectively forecast

We’ve seen excellent growth “ in sales, which were up 1000% production schedules. from the previous year. We have Positive reviews in the also gone from being a new national press can “ often brand to the no.1 selling make- result in sales that are up product with The Hut Group, Europe’s largest online beauty retailer, outselling a number unprecedented of leading International brands. Our sales in Farah Naz, Founder, BeautyMART outlets in Topshop and Harvey EX1 Cosmetics Nichols have also remained very strong. In terms pigments, which I specifically created with olive- of online retail, we have recently entered an skinned women in mind. Make-up is something exciting new partnership with Amazon UK as most women use daily and until now women with part of their overall expansion strategy in the olive skin tones often have to spend three times as beauty sector. Publicity-wise, this year we’ve been much for a simple cosmetics purchase. I wanted everywhere from being included within some to develop a premium quality product but price of the biggest national newspapers and glossies, it affordably for all. We’re delighted that this to being featured on the UK’s most watched approach has proved successful, being reflected daytime TV show. in very strong, continually growing sales and confirming the need for a brand such as EX1. Where is the brand performing best? Internationally, the US is our leading consumer How have competitors reacted? group and accounts for 40% of our overall I do not believe we have any direct competitors online sales. Australia is the next largest region, that offer similar products at this price point. contributing to 5% of our total online sales. This is driven, in What are the brand’s biggest challenges? part, by EX1 Cosmetics’ With a brand that is so fast growing, it can be popularity with beauty YouTubers hard to effectively forecast production schedules. in these countries. Positive reviews in the national press can often result in sales which are completely What strategy do you use to set unprecedented. This can make it difficult to keep the brand apart from others? pace with consumer demand and at times, we What separates EX1 foundations have totally sold out. from other brands are our unique What methods of generating publicity have you found most successful? We run outdoor advertising campaigns using bus shelters and billboards, as well as participating in 1000% various beauty exhibitions and events. However, The percentage sales growth we have found that word of mouth marketing is for EX1 last year the biggest influencer of product sales. I am a strong believer in creating the highest quality products possible, which really do speak for 6 TOP 5 themselves. The number of beauty awards and shortlists EX1 Cosmetics’ top selling What does 2015 hold? gained since the brand’s launch products: As part of our retail expansion strategy this year, 1 Liquid Foundation we will be rolling out into more bricks and 2 Delete Concealer mortar stores across the UK. We also intend to 40% 3 Mineral Powder appoint distributors selectively and progressively The percentage of EX1 online sales 4 Blusher in certain key international markets, where made in the US 5 Compact Powder demand for our products is high. Source:EX1 Cosmetics Read more at cosmeticsbusiness.com

NEWS IN BRIEF CHANTECAILLE TEAMS UP WITH JAMIE BECK ew York-based make-up and skin and cinemagraphics, focusing on a young female Condé Nast Entertainment (CNE) has named Claudia care brand Chantecaille has teamed model with roses in her hair (pictured). The Sulewski as the host of Teen Nup with fashion photographer Jamie product, which launches in the US this Vogue’s official YouTube Beck of Ann Street Studio to create a month, contains rose di mai extract, channel. Sulewski has a big rose-themed campaign for the debut of paracress, winged kelp and Chilean presence on YouTube with its Rose de Mai Face Oil. tree bark, which work together to her blog BeyondBeautyStar The campaign, created to help fight ageing, even skin tone and firm and has made a name for portray the brand in a modern light, will the skin. “It’s meant to work (on all herself among the digital be rolled out across the brand’s website, types of skin)” Chantecaille communities in beauty, newsletter and social media channels fashion and lifestyle. explained. “We have a large business Sulewski is the second including Facebook, Twitter and Instagram. in Asia, so it was very important that person to be an official CNE It will also be used by retailers such it worked on Asian skin.” Chantecaille host, following Kandee as Neiman Marcus, which is featuring explained that despite growth across Hong Johnson’s appointment. the campaign’s graphics in-store. Kong, the UK and New York, the brand are Speaking to WWD, the brand’s keen to expand further. “We need to Brazilian e-commerce is on the founder Sylvie Chantecaille said: “We get our brand to a wider growth path, up 24% compared wanted to create something that could audience,” noted Chantecaille. with 2013, according to a report be used on our social media channel. The oil will be sold on by E-bit. E-commerce revenue in the country reached $35.8bn, Not just for our Instagram, but chantecaille.com, and at with 103.4 million orders, 17% for our website and our Barneys New York, Bergdorf higher than 2013. Overall, Brazil retailers.” Goodman, Neiman Marcus, totals 61.6 million one-time e- The whimsically Space NK, selected consumers who have made at designed campaign Bloomingdales, Saks Fifth least one purchase over the consists of stills, videos Avenue and Nordstrom. internet. In 2014, 51.5 million were active and, of these, 10.2 million were newcomers. Origins launches product YouTube marketing company Grapevine has secured $1.1m app #Quarterlifecrisis in seed funding. Grapevine’s Skin care brand Origins is set to be the latest on-demand platform allows beauty brand to launch a product app. brands to promote products The free #Quarterlifecrisis app has been made with YouTube stars. It has a to reinforce the brand’s campaign aimed at network of more than 4,000 millennial consumers, whose life and skin are in stars. Its click-through rate is said to be 50 times higher a stage of transitioning. than traditional display for The app will be launched in conjunction with beauty, fashion and lifestyle the brand’s Original Skin Renewal Serum with clients, such as NYX Willowherb, a product that has been formulated Cosmetics and Remington. to appeal to the skin concerns of post university consumers in their early 20s. The UK Society of Cosmetic Origins cited this consumer group as “the most Scientists has developed a stressed out demographic in history” and created website for schools designed to Ardency Inn, a cosmetics brand originating the high performance serum specifically to target inspire tomorrow’s scientists, from the New York music scene, has debuted scrubuponscience.co.uk. The an online entertainment network, Ardency quarter-life crisis skin concerns such as enlarged resource for teachers and Inn TV. The network aims to combine both pores, loss of radiance and rough texture. pupils uses cosmetics and make-up and music-based content inspired The app allows consumers to share information personal care products as by the downtown streets of New York. The through an interactive platform; they can also examples for learning science. brand, which is known for its edgy character, illustrate photographs using freelance illustrator said the editorial direction of the channel and graphic designer Bee Stanton’s unique For Valentine’s Day, Revlon will be “unconventional, uncensored and graphic illustrations. In a further bid to appeal teamed up with Google unapologetic”. When viewers tune in, they to the millenial audience, Origins has also named to create an animated, will be able to view one-off videos and shareable e-card in line weekly series, including: NYC Street Style three ‘social influencers’ to act as brand with the brand’s Love Is On Makeup, which features looks from the ambassadors: English fashion, beauty and lifestyle campaign. Consumers were streets of New York; Ardency Inn Lab, where vlogger Tanya Burr; Jenn Chae, a US designer able to select a Revlon Ultra the brand’s products are put to the test in and freelance make-up artist turned blogger; and HD Lipstick colour, upload real life situations; Ardency Inn Sessions, finally Stanton herself. an image of themselves or which showcase music from female artists in Additionally, the brand has also partnered with their valentine, and watch as New York; and Stone Broke Beauty, make-up over 500 further influencers to co-create content a kiss in the shade chosen tutorials for the time-poor and those on a across millennial hotspots such as Twitter, was placed on their cheek budget. Watch the video at via a GIF, which could be cosmeticsbusiness.com Pinterest, Facebook, Instagram and Youtube. shared on social media. The #Quarterlifecrisis by Origins app is due to launch in the UK in early March.

ANIMAL FEEDSTOCK HAS SUPPLIERS NEWS

COSMETIC APPLICATIONS MANGO GOES PREMIUM common animal feedstock is offering possibilities as a raw Ingredients supplier Natural material for cosmetic ingredients, according to new research Sourcing has added premium Abeing conducted in Europe. mango butter to its line of Extracts from rapeseed press cakes, normally used as cattle ingredients. Its Indian fodder, contain high levels of sinapine and sinapic acid – phenolic Mangifera indica, or mango compounds that have a number of useful cosmetic properties, seed butter, is solvent extracted including anti-inflammatory, anti-ageing, bacteriostatic, antioxidant and fully refined, with a shelf and antimicrobial. The extracts processed from sinapine can be life of two years. It has similar very effective in preventing the oxidation of emulsions and oils. properties to cocoa and shea between Unilever Canada’s The teams undertaking the research come under the aegis of the butter, offering a soft, semi- men’s personal care brands Apropos project, a collaborative research project financed by the solid, creamy texture with and the Toronto Raptors. European Union and involving companies based worldwide. a mild aroma that will not In 2015, Lowry will act However, commercialisation of any extracts might take some compete with any added as a brand spokesperson time, according to Raija Lantto, Head of Research at VTT and fragrances, according promoting the Degree, Axe, coordinator of the Apropos project. “The technology is ready to the company. Vaseline Men and Dove to produce extracts from rapeseed press cake (presently used as Men+Care brands. feed) to be used as cosmetic components,” Lantto told CBN. “But at the present time there is no company to use the EYES ON THE GAME technology and produce said extracts. In addition to the production Innoderm has technology, this necessitates, as far as I know, standardisation of the launched its new extracts and testing them in various ways to make them acceptable Hyalu Serum 2.3 Eye to the regulatory framework in the EU and beyond.” Contour Serum and VTT Technical Research Centre of Finland, which is involved SAFE AND SECURE Cream packaged in the project, has developed bio-mechanical methods to extract M&H Plastics has added a new in Yonwoo’s phenols from rapeseed along with an enzymatic, water-saving tube design to its porfolio for Ampoule Program treatment to improve the extraction of proteins. brands that require tamper vials, created by The extracts that result have then been developed by two evidence and enhanced Quadpack. The laboratories in Catalonia, Spain, which have developed security. The new tubes, vials use airless an ultrasound-based encapsulation technique that removes the available in 35, 45 and technology, while natural yellow-brown colour of the phenolic compounds. The 50mm diameters, feature they also feature resulting white emulsion is suitable for use in cold creams and a tear-strip design that, once a metal roller ball topical medical applications. removed, provides a practical applicator. lip to open the cap. The tubes Read more at can undergo full-sleeve printing cosmeticsbusiness.com SCIENTISTS DISCOVER HOW TO GROW and can provide a ‘sight glass’ ‘SOAP’ FROM STRAINS OF BACTERIA window to see when the EVEN BRIGHTER SMILES Most people consider soap to be an effective means of removing product is running out. Hello products, an oral care bacteria from their skin. However, a group of scientists has flipped Read more at products maker, has given its this concept on its head by discovering a type of bacteria that can cosmeticsbusiness.com toothpaste line a packaging itself be used to create a form of soap. revamp, along with the addition TeeGene Biotech, a Teesside University venture, has developed of a number of new flavours. a way to create biosurfactants, which act like soap and help The colours of the new tubes to emulsify different liquids, from strains of bacteria. reflect the flavours inside and The biosurfactants created can be manufactured in a lab and include: Supermint, Pink are said to be fully biodegradable, with minimal impact on the Grapefruit Mint and Mojito Mint. environment – an attractive option for the eco-conscious. The newest flavour, Peach As a result of its innovative discovery, TeeGene Biotech was Mango Mint, which comes named runner up at the Industrial Biotechnology Leadership in a bright orange tube, will Forum awards, held on 11 and 12 February. launch exclusively at Target Dr Pattanathu Rahman, Founding Director of TeeGene Biotech, and target.com. is a Senior Lecturer in Process Engineering and Biotechnology ALL-STAR AEROSOLS at Teesside University. He said: “ The levels of purity needed for Unilever Canada debuted its biosurfactants in the industries in which they’re used is extremely new Dry Spray Antiperspirant high. Because of this, they can be very expensive. However, the technology with the help of methods we have of producing them make it much more 2015 NBA All-Star Kyle Lowry. economical and cost efficient. It’s a very exciting technology with The antiperspirant is said to be tremendous potential for applications in a range of industries.” “a revolutionary formulation” Other uses include oil recovery, reducing pollution and food that goes on instantly dry. processing. TeeGene Biotech was formed in December 2014 and The launch strengthened ties is based in the Wilton Centre at Redcar.

brands

NEW PRODUCTS

1 LA ROCHE-POSAY has added said to double up as a shaving 4 ILLAMASQUA has unveiled mountain woods to help the user four products (£11-£15.50) to its cream. The range was created its Precision Brow Gel (£18.50), feel more relaxed. Anthelios sun care line. These after Kanebo Beauty Research a water-resistant, cream-gel Launch: out now include: Comfort Cream SPF30 Laboratories identified a “striking formulation, available in a range and SPF50+; BB Tinted Comfort resemblance” between male and of shades for multiple skin and 6 NIVEA has added a Q10 Cream SPF50+; and Dermo- female skin care concerns hair tones. The gel can be used Firming variant to its In-Shower Paediatrics Baby Lotion SPF50+. in Japan, with skin dryness, to create naturally defined Body Moisturiser range (£5.10). The comfort cream has an extra- spots and freckles being among brows, according to the brand, The product contains coenzyme moisturising formula for dry skin, the top worries for men. The and is different to other brow Q10, a substance found naturally while the tinted cream is made range is said to be designed for powders and pencils as it can in the skin. The coenzyme to illuminate and unify skin while men in their thirties and forties. be used to draw finer hairs for is contained inside massage providing protection. Although The packaging was created by a more realistic result, using its beads in the formula, which melt the products in the range already designer Kashiwa Sato. Fine Liner Brush or Angled and penetrate into the skin provide UVA protection twice Launch: out now Brush. Shades include: Awe, under hot water. The in-shower as strict as European standards, Read more at for blonde brows; Glimpse, moisturiser also contains the brand has now added cosmeticsbusiness.com for auburn brows; Stare for refreshing menthol for a slight protection against long UVA rays ebony brows; and Strike, for cooling sensation. The product to its formulations in the form 3 ELEMIS is soon to launch brunette brows. is said to help replenish skin’s of its first antioxidant active Jasmine and Rose Hand and Launch: out now Q10 levels – an essential part of ingredient, baicalin. It is clinically Nail Cream (£18). The cream has the skin’s metabolic process for proven to provide reinforced been specially formulated with 5 DECIEM has launched energy production – supporting protection against the effects a combination of omega rich oils Overnight to Gorgeous Hair surface skin cell renewal and of UV rays including long UVA. to deliver rich moisturisation Masque (£22). The mask is improving the appearance Launch: out now to the hands. Key ingredients intended to work overnight of skin, according to Nivea. Like Read more at include nourishing argan oil, so that the user wakes with its other in-shower moisturisers, cosmeticsbusiness.com rich in vitamin E and omega-6; glossy, more manageable hair. the product is applied in the protective abyssinian oil According to the brand, the shower after a wash, and the 2 KANEBO has launched its to replace lost lipids; jasmine treatment has more time user can dress themselves first prestige men’s skin care and white lotus flower milks to penetrate the hair overnight. immediately after towelling dry, line on the Japanese market. to soften and calm dry skin; and The formula delivers active unlike a traditional moisturiser The Lissage Men range absolutes of jasmine and ingredients – a blend which takes time to dry. (¥2,000-3,000) rose to provide of hyaluronic acid, tamarind Launch: out now comprises a an uplifting, derivatives, acai and palm oils – Read more at moisturising comforting scent. into the cortex to nourish hair cosmeticsbusiness.com beauty essence and Launch: March and provide intense hydration. a foaming soap, the The mask also contains an latter of which is aroma of Bulgarian lavender and

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Coty has signed Scott Eastwood as the face of the Davidoff Cool Water fragrance advertising campaign starting worldwide this summer, when the first TV commercial and print ad will appear. The American actor has featured in over 20 films, his latest being Fury. Born and raised by the sea in California and Hawaii, Eastwood is a “lifelong ocean lover” and surfer – fitting for the face of Cool Water. “The ocean has been a huge part of my life for as long as I can remember, and I’m proud to be the face of the fragrance that is synonymous with that lifestyle,” said Eastwood. “Scott Eastwood is a rising star in Hollywood who has always been committed to the ocean and to nature. He represents a new kind of man: a man who is outdoorsy, adventurous and cares about the environment but doesn’t take himself too seriously. He truly embodies the spirit of Davidoff Cool Water,” added Steve Mormoris, Coty’s Chief Marketing Officer for Fragrances.

THE LATEST APPOINTMENTS

SALLY BEAUTY has appointed CHRIS REVLON has announced that BENJAMIN L’ORÉAL PROFESSIONNEL has named BRICKMAN as President and Chief KARSCH will join the company as iconic model Twiggy as its new UK Brand Operating Officer. Brickman has been Executive Vice President, Chief Marketing Ambassador. Twiggy will feature in salon a member of Sally Beauty’s Board of Officer, Revlon Consumer. Karsch is said windows nationwide, while she will also Directors since September 2012 and has to be “an expert in consumer-facing brands promote the launch of Majirel High Lift, served as the company’s President and and packaged goods”. He recently worked L’Oréal Professionnel’s new blonde COO since June last year. Prior to joining as Cigna’s Chief Marketing Officer. He formula, which launches this month. Sally Holdings, he was President of has also held positions at Las Vegas Sands, Read more at cosmeticsbusiness.com Kimberly-Clark International. P&G and Johnson & Johnson. Read more at cosmeticsbusiness.com P&G has appointed FRANCIS BLAKE OLIVER BOTTRIE, ESTÉE LAUDER’S to its Board of Directors. Previously, Blake COMEXI GROUP, a supplier of solutions President of Travel Retail Worldwide and was Chairman of the Board and Chief for the packaging industry, has named Co-Founder of the non-profit organisation, Executive Officer of The Home Depot. He DAVID CENTELLES as Corporate Hand in Hand for Haiti, has been appointed held this role from 2007 until he decided Marketing Director. Centelles was the to the French National Order of Merit, to step down as Chief Executive Officer company’s Director of the Manel Xifra after being nominated by Laurent Fabius, in November 2014. He retired as Chairman Boada Technological Centre, prior to his French Minister of Foreign Affairs. Bottrie on 2 February. Blake will serve on the Audit new role. Centelles joined the Comexi was recognised for his philanthropic work and Governance & Public Responsibility Group in 2006. following the earthquake in Haiti in 2010. committees of the Board at P&G.

criticised 15 years ago. Why have they not HOW CAN I BUILD UP changed? Because it’s an attitude. If a brand had Q to change its name or packaging, it would be TRUST IN MY ORGANIC done instantaneously. They say about 80p in every pound is spent on branding and marketing. AND NATURAL BRAND? So 20p of it is spent on the formulation. It should Gain the right kind of accreditation, question long standing attitudes be the other way round. and don’t cut corners, says Essentially Yours Founder John Hamilton Many brands don’t show an attitude that they care about what’s in the ingredients. They don’t Trust is vital. If I go They say about care what the ingredients do to the environment,

into a garage with 80p in every pound or to their customer base. Even a lot of natural,

A a fault with my car, “ organic brands, especially here in the UK, have I’ve got to be is spent on branding. only taken out parabens because of the demands confident the mechanic isn’t So 20p is spent“ on the of the consumer. going to rip me off. It’s the actual formulation. same with the beauty industry – It should be the other Invest in your product, honestly consumers have to build up trust with a brand An organic product can mean a poor product – whose attitude is only to make chemical-free or way round it doesn’t necessarily contain what’s good for you. organic products. But it’s very easy to mislead the John Hamilton, Cosmetology Conversely, there are products that are good for consumer: put an image of fruit, vegetables or Dermatologist, Biogerontologist you, but they’re not available from certified and Founder of the Essentially trees on the front of a bottle and give the product Yours Institute for Natural Skincare organic sources. It all comes back to trust. a name that conjures up something natural in the When a manufacturer makes cosmetics, they consumer’s mind and they think that it’s a safe often think: how can I make it as cheap as possible product. At Essentially Yours, we research and and give maximum return to the people we’re develop products and formulations, and then making it for? How long is its shelf life? These either sell those formulations or the knowledge are all contributors to the synthetic chemical behind them to be mass produced. But, when we industry we’re in. You can’t just put natural first started, there wasn’t a huge demand for products in any container – you have to make natural products, so we created our own brands. sure the natural ingredients aren’t going to make the plastic jar bleed into the product. But you can Look into accreditation avoid creating products that contain parabens, Organic is an area where people get lost. The sodium sulphates, DEAs, MEAs or TEAs. Soil Association is one of the UK’s largest Read more at cosmeticsbusiness.com certifying bodies of organic products, following rules laid down by European law. However, that law is intended to cover consumable products, CHECKLIST: HOW TO GAIN so for non-consumables, like health and beauty products, you have companies making claims that ORGANIC CERTIFICATION their products are organic when perhaps only The Soil Association requires five key steps: 1% of the ingredients are. The Soil Association ❒ Enquire Make an initial enquiry by calling has developed its own standards in the area, the Beauty Team on 01179142406 or emailing requiring 95% of a product’s agro-ingredients [email protected] and 20% of the entire product to be organic ❒ Apply Submit an application and send through in order to get their stamp of approval. product information. There are different forms required for single and multiple ingredient But just because something is organic doesn’t products, so be sure to fill in the right one mean that it doesn’t contain chemicals. Take ❒ Review Your application will be reviewed and organic wine, for instance. The crops may not you will be allocated a Certification Officer who be sprayed with pesticides, but sulphates are 37% will guide you through the rest of the process still added to preserve the wine. The percentage of shoppers who ❒ Inspection An inspector will phone you to only buy from brands they trust arrange a visit to your premises to review your manufacturing process, equipment Question the status quo and procedures A long time ago, I went to a debate in London, ❒ Follow up After your inspection you will need being held by several hundred women who had % to fill in an Action Summary Form (ASF). The had cancer. They invited along representatives of 13 Soil Association will also need to approve at The growth of health food shops least one product specification and label. All big companies, like Tesco and Boots, and asked in London selling natural skin care them: why do you have all these chemicals and being well, you will be issued a certificate parabens in your products? How can we change For more details, visit www.sacert.org this? One of the big manufacturers said: “You need to buy more of the products without them 30% Submit your questions for the next in and then my shareholders and my directors The percentage of consumers The Final Word column by tweeting will tell me to make products without them.” looking for paraben and Cosmetics Business @cb_beautynews Having been in the industry for so long, it’s quite harsh-chemical-free products* using #TheFinalWord frightening that we still have the same products *compared with less than 1% ten with the same harsh chemicals in now that were years ago

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