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 23 February 2015 cosmetics business news 1 Copyright © 2015 HPCi Media. This publication may not be distributed without prior permission. business 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.