Beauty's Most Innovative Execs

AN INSIDER’S GUIDE TO BEING BOUGHT • WHY BANGS ARE THE NEW BROWS & OTHER BACKSTAGE TALES

The Business of !Beauty Beauty’s 2 5 Most Innovative Execs

ALANTHE STRAIGHT-TALKING SCOT WHO’S FIRINGJOPE UP UNILEVER’S BEAUTY BUSINESS

AN ISSUE OF Al! eyes on you.Jennifer Lopez

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PRIMER MASCARA IN THIS ISSUE

Braids gone wild and more key looks from the Spring 2016 shows.

DEPARTMENTS 10 16 20 All That Jazz The Bold Shopper Turning a spotlight and the Stalker 23 on fall’s most se- Beautiful Who’s buying Why the ductive launches. From braids to what—and why— knowing smile? bangs, the key in SoHo. Find out in “The Originals.” 12 hair and makeup Retail Safari: trends from the 38 Berlin spring runway The Stat “The personal-care industry cannot sustain The latest beauty shows. Dept. the cost of their traditional spin and continue hot spots in one of Now that The to disregard the impact we have on health, Europe’s coolest NPD Group has society and on the environment in general.” capitals. expanded the universe of sellers !SHASHI!BATRA,!Credo 14 it surveys, WWD Master Class: Beauty Inc looks FEATURES Marc Rey 18 at the impact on As he takes Balancing the top players in over Shiseido’s Act prestige beauty. 23 North American Former Wall Street The Originals operations, Marc analyst Marisa At a time when innovation is driving the beauty industry, the ability to Rey analyzes the Vara Arredondo combine creative and critical thinking is a competitive advantage. areas of opportu- ventures into pres- Here, our list of the 25 most innovative thinkers in beauty. nity he’s looking to tige skin care with tackle ﬁrst. Phace Bioactive. 28 Don’t Let The Peace Sign Fool You On the Cover: In the last ﬁve years, Unilever’s personal-care business has soared. In an 14 exclusive interview with WWD Beauty Inc, group president Alan Jope shares his Alan Jope, president Marc Rey of Unilever’s personal- strategy on accelerating the business even further. muses on care business, was the U.S. photographed exclusively for WWD market. Beauty Inc by Jude 34 Suits & Start-Ups Edginton at Unilever’s headquarters The last 14 months have been among the most active in M&A deal-making in in London. beauty—but what happens once the deal is done? Here, an insider’s guide to integration from the point of view of both the buyer and the seller.

WWD IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLISHING, LLC. COPYRIGHT ©2015 FAIRCHILD PUBLISHING, LLC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 210, NO. 26. Friday, October 30, 2015. WWD (USPS 689-960, ISSN 0149-5380) is published weekly, with one additional issue in February, March, June, October, November and December, and two additional issues in April and August by Fairchild Publishing, LLC, which is a division of Penske Business Media, LLC. PRINCIPAL OFFICE: 475 Fifth Ave, New York, NY 10017. Peri- odicals postage paid at New York, NY, and at additional mailing o!ces. Canada Post: return undeliverable Canadian addresses to P.O. Box 503, RPO West Beaver Creek, Rich-Hill, ON L4B 4R6. POSTMASTER: SEND ADDRESS CHANGES TO WWD, P.O. Box 6356, Harlan, IA, 51593. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WWD, P.O. Box 6356, Harlan, IA, 51593, call 866-401-7801, or e-mail customer service at wwdPrint@cdsfulﬁllment.com. Please include both new and old addresses as printed on most recent label. For New York Hand Delivery Service address changes or inquiries, please contact Mitchell’s NY at 1-800-662-2275, option 7. Subscribers: If the Post O!ce alerts us that your magazine is undeliverable, we have no further obligation unless we receive a corrected address within one year. If during your subscription term or up to one year after the magazine becomes undeliverable, you are ever dissatisﬁed with your subscription, let us know. You will receive a full refund on all unmailed issues. First copy of new subscription will be mailed within four weeks after receipt of order. We reserve the right to change the number of issues contained in a subscription term and/or the way the product is delivered. Address all editorial, business, and production correspondence to WWD, 475 5th Ave, 15th Floor, New York, NY 10017. For permissions requests, please call 212-630-5656 or fax request to 212-630-5883. For reprints, please e-mail [email protected] or call Wright’s Media 877-652-5295. For reuse permissions, please e-mail [email protected] or call 800-897- 8666. Visit us online at www.wwd.com. To subscribe to other Fairchild Media, LLC magazines on the World Wide Web, visit www.wwd.com/subscriptions. WWD IS NOT RESPONSIBLE FOR THE RETURN OR LOSS OF, OR FOR DAMAGE OR ANY OTHER INJURY TO, UNSOLICITED MANUSCRIPTS, UNSOLICITED ART WORK (INCLUDING, BUT NOT LIMITED TO, DRAWINGS, PHOTOGRAPHS, AND TRANSPARENCIES), OR ANY OTHER UNSOLICITED MATERIALS. THOSE SUBMITTING MANUSCRIPTS, PHOTOGRAPHS, ART WORK, OR OTHER MATERIALS FOR CONSIDERATION SHOULD NOT SEND ORIGINALS, UNLESS SPECIFICALLY REQUESTED TO DO SO BY WWD IN WRITING. MANUSCRIPTS, PHOTOGRAPHS, AND OTHER MATERIALS SUBMITTED MUST BE ACCOMPANIED BY A SELF-ADDRESSED STAMPED ENVELOPE.

4 WWD BEAUTY INC

EDWARD NARDOZA EDITOR IN CHIEF, WWD

PETE BORN EXECUTIVE EDITOR, BEAUTY JENNY B. FINE EDITOR JENNIFER WEIL EUROPEAN EDITOR JULIE NAUGHTON SENIOR PRESTIGE MARKET BEAUTY EDITOR MOLLY PRIOR BEAUTY FINANCIAL EDITOR FAYE BROOKMAN CONTRIBUTING EDITOR ELLEN THOMAS EDITORIAL ASSISTANT MAUREEN MORRISON-SHULAS CHIEF COPY EDITOR DANIELLE GILLIARD, DAVID PODGURSKI, MAXINE WALLY COPY EDITORS CONTRIBUTORS EDITOR’S!LETTER JESPER GORANSSON (ART), SAMANTHA CONTI (LONDON), MILES SOCHA (PARIS), CYNTHIA MARTENS (MILAN), MARCY MEDINA (LOS ANGELES), MELISSA DRIER AND SUSAN STONE (BERLIN), AMANDA KAISER (TOKYO) PHOTO JENNA GREENE ASSISTANT PHOTO EDITOR OONA WALLY BOOKINGS AND PRODUCTION EDITOR KATRINA BROWN ASSOCIATE PHOTO EDITOR DARING DO EMILY TAYLOR PHOTO STUDIO ASSISTANT GEORGE CHINSEE, STEVE EICHNER, THOMAS IANNACCONE PHOTOGRAPHERS BEAUTY INC ADVERTISING PAUL JOWDY SENIOR VICE PRESIDENT, GROUP PUBLISHER STEPHANIE GEORGE PRESIDENT AND VICE CHAIRMAN

PAMELA FIRESTONE ASSOCIATE PUBLISHER CARLY GRESH BEAUTY DIRECTOR JILL BIREN WEST COAST DIRECTOR HOCK WAVES REVERBERATED THROUGHOUT MARJORIE THOMAS EUROPEAN SALES REPRESENTATIVE OLGA KOUZNETSOVA ACCOUNT MANAGER, ITALY the beauty industry last June when news came that JOANNA BLOCK SENIOR CLIENTS SERVICES MANAGER EMANUELA ALTIMANI SENIOR SALES COORDINATOR, ITALY Dermalogica was being sold. For one, the professional PASCALE RAJAC ADVERTISING ASSISTANT, FRANCE skin-care brand had reportedly—and repeatedly— ANNIE BELFIELD, RACHAEL DESANTIS, TINA SCHLISSEL CLIENT SERVICES MANAGERS DIGITAL/MARKETING/CREATIVE SERVICES turned away numerous strategic suitors over the years. SHANNON NOBLES MARKETING DIRECTOR CASS SPENCER CREATIVE DIRECTOR, MARKETING Why the change of heart now? But even more stunning CASSIE LEVENTHAL DIGITAL MEDIA STRATEGIST AMY KEISER DIGITAL SALES PLANNER was who the buyer was: Unilever, the personal-care PRODUCTION giant more known for soap and soup than prestige skin care. ¶ At a time KEVIN HURLEY PRODUCTION DIRECTOR PROVIDENCE RAO PRODUCTION MANAGER Swhen the industry is undergoing seismic change, Unilever is leading PREPRESS PRODUCTION ALEX SHARFMAN DIGITAL IMAGING the charge. Not only is it doubling down on personal care during a DAVID LEE CHIN ASSEMBLY period when its largest rival—Procter & Gamble Co.—has sold many of SUMMITS & EVENTS AMBER MUNDINGER VICE PRESIDENT, NEW VENTURES & GM its brands in the category, it’s also focusing on a sector—prestige—that MARY ANN BACHER EXECUTIVE EDITORIAL DIRECTOR KIM MANCUSO DIRECTOR, ATTENDEE SALES it hasn’t been involved with in more than a decade. ALEXIS COYLE SPONSORSHIP DIRECTOR AMELIA EWERT DIRECTOR OF EXPERIENTIAL MARKETING For a journalist who covers beauty, this is One of the challenges that Jope and his CONSUMER MARKETING Unilever colleagues will face is successfully ELLEN DEALY VICE PRESIDENT & SENIOR EXECUTIVE DIRECTOR an irresistible story, so in early September PEGGY PYLE CONSUMER MARKETING DIRECTOR I traveled to London to meet Alan Jope, integrating the indie brands they acquire JANET MENAKER SENIOR DIRECTOR, DIGITAL MARKETING & STRATEGIC DEVELOPMENT into the overall larger corporate fold. While JOHN CROSS PLANNING & OPERATIONS DIRECTOR Unilever’s president of personal care, who has RANDI SEGAL SENIOR DIRECTOR, INSTITUTIONAL SALES been tasked with adding another 10 billion large companies often say they crave the SUZANNE BERARDI SENIOR ONLINE MANAGER kind of entrepreneurial thinking that a brand TAMRA FEBESH SENIOR MARKETING MANAGER euros in sales to the division’s current turnover LAUREN BUSCH ASSOCIATE MARKETING MANAGER of almost 18 billion euros. Jope himself is as founder brings as part of an acquisition, the FAIRCHILD PUBLISHING LLC understated as the goal is audacious—his reality is that it can be difficult to maintain MICHAEL ATMORE EDITORIAL DIRECTOR, FOOTWEAR NEWS & DIRECTOR OF BRAND DEVELOPMENT daily uniform consists of jeans, Nikes and an indie stance in a big company bogged DEVON BEEMER FINANCE DIRECTOR a backpack in lieu of a briefcase—but in the down with bureaucracy. In “Suits & Start- RON WILSON DIRECTOR OF EUROPEAN OPERATIONS 14 months since assuming his position, he Ups” on page 34, writer Rachel Brown speaks has already made strides toward achieving to both buyers and sellers to discover where FAIRCHILD PUBLISHING LLC IS A DIVISION the objective, unleashing a steady stream of the pitfalls lie—and how some of the most OF PENSKE MEDIA CORPORATION acquisitions and a global strategic vision that successful acquirers of indie brands have JAY PENSKE CHAIRMAN & CEO encompasses the changing demographics and avoided them. GERRY BYRNE VICE CHAIRMAN psychographics of women (and men) around Such issues have doubtless occupied the GEORGE GROBAR EXECUTIVE VICE PRESIDENT, STRATEGY AND OPERATIONS the world. minds of many of the people in “The Originals,” PAUL WOOLNOUGH EXECUTIVE VICE PRESIDENT, BUSINESS AFFAIRS “Over the last five years, we’ve been the our first annual list of the most innovative CRAIG PERREAULT SENIOR VICE PRESIDENT, BUSINESS DEVELOPMENT TODD GREENE GENERAL COUNSEL & SVP HUMAN RESOURCES fastest-growing personal-care company in the people in beauty, which starts on page 23. MICHAEL DAVIS CHIEF OF VIDEO STRATEGY industry,” Jope says. “The vision is to keep that From established executives to emerging NELSON ANDERSON VICE PRESIDENT, CREATIVE KEN DELALCAZAR VICE PRESIDENT, FINANCE going. Our starting point is our existing core entrepreneurs, product incubators to retail STACEY FARISH SENIOR VICE PRESIDENT ENTERTAINMENT & PUBLISHER, DEADLINE categories and we are stepping into prestige groundbreakers, these are the people who set GABRIEL KOEN VICE PRESIDENT, ENGINEERING as well. I don’t think there is any kind of end the pace others follow. They not only see the TARIK WEST VICE PRESIDENT, HUMAN RESOURCES LAUREN GULLION DIRECTOR OF HUMAN RESOURCES & CORPORATE COMMUNICATIONS destination in sight—just superior growth future—they seize it. “The next five years will JONI ANTONACCI DIRECTOR OF OPERATIONS and chucking on billions of euros in growth.” bring a consumer-driven marketplace that ROBB RICE GROUP DESIGN DIRECTOR YOUNG KO CONTROLLER Easier said than done, perhaps. For an in- we’ve never quite seen before,” says Francois CHRISTINA YEOH SENIOR PROGRAM MANAGER depth analysis of Jope’s strategy, turn to “Don’t Nars, one of the 25 “Originals.” “Nothing is off EDDIE KO DIRECTOR, ADVERTISING OPERATIONS MATT WILLIAMSON DIRECTOR OF IT OPERATIONS & PRODUCTION Let the Peace Sign Fool You” on page 28. limits.” —Jenny B. Fine DEREK RAMSEY SENIOR PLATFORM MANAGER

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Looking glam at the premiere of Scream Queens in September...

...and at an Entertainment Weekly party in July.

Girl of the Moment This Hollywood native gets her Billie talent naturally. LOURD OLLYWOOD IS IN BILLIE LOURD’S DNA — MOM IS Carrie Fisher, grandma is Debbie Reynolds, dad is power agent and managing partner of CAA Bryan Lourd—but her role as Chanel #3 on FOX’s star-stud- ded Scream Queens is the 23-year-old New York University grad’s ﬁrst acting credit. Lourd is a quintessential California cool girl who swears by a tousled bed head and minimal makeup paired with classic Hwhite Vans. “My mom and I are kind of tomboys, and then, on the show, all the girls were like, ‘You need to start doing a [skin-care] routine,’” says the fresh-faced blonde. “Now I’m much better about it.” Lourd, whose go-to products include Aesop Fabulous Face Oil, Lourd in character By Terry Cellularose Hydradiance Eye Counter (it was a gift from Jamie as Chanel #3 in Lee Curtis) and Dior Mascara, isn’t straying completely from mom’s foot- her hit show. steps just yet. In December, she’s slated for a top-secret role alongside Fisher’s Princess Leia in Star Wars: The Force Awakens. —Ellen Thomas PHOTOS BY STEVE DIETL/FOX; MATTHIAS CLAMER/FOX/COURTESY EVERETT COLLECTION; AMANDA EDWARDS/WIREIMAGE; CHELSEA LAUREN/WIREIMAGE CHELSEA EDWARDS/WIREIMAGE; AMANDA COLLECTION; EVERETT CLAMER/FOX/COURTESY MATTHIAS DIETL/FOX; STEVE BY PHOTOS

8 WWD BEAUTY INC brand incubators + beauty retail GAME CHANGERS

HATCHBEAUTY is the leading Strategy + Branding Agency in the beauty space. We provide insight on trend intelligence, business strategy, brand incubation and the creation of innovative retail programs across all channels of distribution. We are the only vertically-integrated beauty company offering turnkey branding, product development and manufacturing in the United States.

THE HATCHBEAUTY GROUP HATCHBEAUTY AGENCY | HATCHBEAUTY PRODUCTS | HATCHBEAUTY LABS

hatchbeauty.com BEAUTY!BULLETIN

1 3

All That Jazz After living for years next to the Moulin Rouge in Paris’ Montmartre, Vilhelm Parfumerie founder Jan Ahlgren is launching a scent inspired by the glittering nightlife of his former neighborhood. “There’s something extremely sexy about it all, especially when you hear stories of how it was in the past,” Ahlgren says. His Fleur Burlesque isn’t the season’s only launch that evokes the ambience of a cabaret—there’s also Chanel’s Vamp Attitude collection, heady scents from Prada, Ex Nihilo and Arquiste and even an extravagant Givenchy face mask in seductive black lace. RéVive Skincare founder Dr. Gregory Bays Brown chose a photograph by Joel Grey for his annual Artbox. “It’s not her entire face…it’s a bit mysterious,” says Brown of the image. “Interestingly enough, my favorite movie of all time is Cabaret.” — ELLEN THOMAS

1. RéVive Skincare Artbox 13, $595; 2. Vilhelm Parfumerie Fleur Burlesque, $245; 3. Arquiste Art Deco Velvet, $85; 4. Prada Olfactories Tainted Love, $300; 5. Givenchy Le Soin Noir, $330; 6. Ex Nihilo Fleur Narcotique, $225; 7. L’Oréal Voluminous Superstar Mascara, $10.99; 8. Chanel Le Top Coat Lame Rouge Noir, $27, Rouge Allure, $36, and Illusion D’Ombre, $36, in Rouge Noir

let every strand shine

Suave Professionals® Moroccan Infusion Infused with authentic Moroccan argan oil — it’s light on your hair for a long-lasting shine

W ORKS AS WELL AS SALO N BRA N DS BEAUTY!BULLETIN Und Gretel LAUNCHED: JANUARY 2015 Encouraged by clients like Julie Delpy, makeup artist Christina Roth created her own line of high- end BDIH-certified natural and organic makeup. Und Gretel’s 11 products come in Bauhaus-inspired packaging, and include Luk cream eye shadow sticks ($39), Ilge invisible Daluma Jacks Beauty Department pressed powder ($47) and OPENED: OCTOBER 2014 OPENED: APRIL 2015 Lieth, a buildable foundation made with avocado oil and The steep wooden stadium benches outside Daluma offer For Miriam Jacks, the opportunity to move her indie boutique, chamomile extract ($54). ringside seats to the Prenzlauer Berg parade of hipsters, Jacks Beauty Department, provided a chance to expand. “You The names come from old trendy moms, language students and online entrepreneurs. can feel our energy and personality here,” she says. Upstairs, German, the colors, from Inside, the café focuses on inner beauty via organic private makeup parties are on tap, plus facials and manicures; high fashion. “Every product superfoods. Vegan and raw selections include cold-pressed down below is a hair salon. There’s a slew of cool brands, too, has a soul, every product is a juices, shakes and mix-and-match bowls. Weinbergsweg 3, including Jacks’ own line of makeup brushes. Kastanienallee character,” says Roth. 10119 (Prenzlauer Berg) +49 (0)30 209 50255 19, 10435 (Prenzlauer Berg) +49 (0)30 442 6906

RETAIL SAFARI Wall-to-Wall BEAUTY IN BERLIN SUSAN STONE explores the German capital’s newest beauty breakthroughs in the edgy East and well-heeled West.

Shan’s True Beauty Hotel Zoo Urban Scents/ OPENED: MARCH 2015 OPENED: NOVEMBER 2014 Backerstrasse-Berlin Iranian-born, Berlin-based celebrity hairstylist Shan Hotel Zoo offers a walk on the wild side, starting OPENED: DECEMBER 2014 Rahimkhan has his own line of hair-care products and two with entry onto a leaping leopard carpet by In Paris, ISIPCA-trained Marie Le Febvre worked in fragrance salons here. But his latest venture could be the hottest yet. Diane von Furstenberg. Each of its rooms and marketing, but longed to make her own scents. She fell in “Fast, easy, sexy,” is how he describes Shan’s True Beauty, suites are unique; amenities include sleepwear love with Alexander Urban, who dreamt of his own art gallery. the first of his planned line of appointment-free blow-dry bars from Maison Margiela, and hair and body They realized their goals in Berlin, with her Urban Scents line serving up quick looks in powder pink retro-style boudoir products by Berlin natural perfumer April of five fragrances ($201) and three candles ($73) produced interiors. The menu includes five styles, as well as quick Aromatics ($20 to 24). These treats, along in the back of his Bäckerstrasse-Berlin gallery. Le Febvre’s manicures, makeup and waxing. There’s also a small but well- with a special edition of Uslu Airlines nail polish scents include Lost Paradise, an homage to the Eighties, curated cosmetics selection, with brands like Youngblood, ($24), can be purchased en suite, or ordered and she also creates conceptual aromas to complement the Lipstick Queen and Kure Bazaar. Kurfürstendamm 195/196, online. Kurfürstendamm 25 (Charlottenburg) gallery’s exhibitions. Eisenacher Straße 57 (Schöneberg) +49 (0)30 884 37 730 10707 (Charlottenburg) +49 (0)30 887 1790 500 +49 (0)159 0104 9818 AILINE LIEFELD BY DALUMA ALEXANDER RENTSCH; BY PHOTO DEPARTMENT BEAUTY JACKS CHINSEE; GEORGE BY PRODUCTS

ILLUSTRATION BY BRETT AFFRUNTI

BEAUTY!BULLETIN

MASTER CLASS Writing a NEW CHAPTER Marc Rey reﬂects on the North American beauty landscape as he assumes a leading role at Shiseido.

By PETE BORN

ARC REY IS A PERSISTENT MOTIVATOR What is your assessment big here. Digital is more with a touch of the poet. ¶ The recently named of the beauty market in developed here than in any North America? other country. Outlet stores president and chief executive officer of Shi- It’s probably the most exist in a few countries, but seido Americas has an offbeat way of using his fascinating place to work, and not to this extent. Depart- idle time on airplanes and in out-of-town hotel the most challenging. It may ment stores to this level exist rooms. While others are fiddling with remote not be the biggest per capita in some countries, but in market for all of the catego- Europe they’re almost noth- controls, trying to snag a tolerable movie, Rey ries, but it’s certainly the ing. And you have self-service is busy crafting fiction—in French. ¶ “I don’t biggest market. So all of the with Ulta and Sephora. It watch movies in planes, I write. To be able to big guys want to be here. means that you cannot grow even start writing you probably need two hours of nonstop time.” Once That creates competition your brands with only one and a lot of visibility because channel of distribution. he’s on the ground and checked into a hotel, jet lag provides oodles of what you do in the U.S. is vis- The significant brands Msleepless writing time in the middle of the night. ¶ “I have an almost ible to everybody. So people that have been generated in religious belief in books,” he admits. “It’s the ultimate form of art…not are very nervous about it. the last 20 years have come only a description of the world, but it’s a description of the inner world of The competition is extremely from the U.S. Obviously fierce. It’s tough to make you have a few brands from people.” ¶ Rey has finished four novels. All of them are unpublished but money in this market. Korea, but the big European he’s in contact with a publisher about one of them, which he describes The second characteristic brands have been here for 30 as political fiction. It opens on Election Day on November 2016, when is the channels of distribu- years. All the newness, like a woman is elected president. ¶ “I like human personality,” he observes. tion. This is the largest and Urban Decay and Nars, have the biggest variety of distri- come from the U.S. “I like misunderstanding among human beings, I like provocation and bution channels in the world. What is amazing here and I like a total absence of political correctness.” ¶ Then morning comes None of them are small. For doesn’t exist in any other mar- and it’s time for business. example, TV retailing only ket is the scope of price and exists in a few countries—it’s promotion coverage. When a

14 WWD BEAUTY INC PHOTOGRAPHED BY MARK MANN top designer does one of those that always comes back is retail store and fascinating LIMITED TIME OFFER crazy expensive fragrances the U.S. There are probably [in] makeup, while Shiseido and only wants 40 doors in three channels that are going knows skin care better, so all the world, there’s always 20 to emerge as faster-growing. those things can be shared. If in the U.S. At the same time Digital, for sure. People are you generate more resources, WE’RE one of the faster segments in spending more time on their you can better allocate those makeup is the dollar mascara phones than talking to other resources and you can push UNLOCKNG business at Wal-Mart. If you people or watching TV. It’s success more. go to France, you’re probably not digital, it’s life. So life ACCESS TO not going to sell the top price, is going to be the biggest How do you acclimate so but you’re not going to sell for channel of distribution. This agilely [to businesses] and $1. You’re going to be more is going to grow enormously, go about putting your in the middle. The combina- particularly in skin care. imprint on a business? tion of fierce competition and Also, digital in terms of I grow talent. I motivate extreme visibility of what you information. Whatever I say in them to go with [their] strong do in the U.S., and the scope my advertising is going to be mind. I create successes, I of price coverage, makes the ignored by the consumer, who test new things. The Ameri- market extremely unique. prefers to look at a comment can market is very forgiving Finally, the U.S. is not the by a user whom she doesn’t [when it comes to] testing. U.S. The U.S. is the world. know than listen to what I say. And I fully respect brands You have such a variety of The second channel which and consumers. The most ethnicities, and you can’t only is going to keep growing is important thing is to moti- say, “I’m only going to target the directly operated store. vate talent to go the extra this group.” When you launch Consumers like them because mile. I try to push successes FOR NON-MEMBERS a foundation here you better it’s direct contact. to the limit. I believe very have all the shades to cover In the U.S., because we much in a model based on all the types of skin. used to have a very strong successes. The impact goes presence of assisted sales of beyond the sales and profits, Is the payoff department store, self-service it can move and change com- correspondingly greater is going to develop more. If pletely an organization. than in other markets? you see the growth of compa- I think so. If you know nies like Ulta, the consumer In terms of encouraging how to extract the learning of today wants to be able to test, talent, how would all that then you can explode try, compare; she wants to you describe your with learning in Europe and have her phone and get infor- management style? Asia and many places. That’s mation and most customers It is challenging in the one of the things [Shiseido don’t want to be cornered. good sense of the term. ceo Masahiko] Uotani is put- Self-service is probably going Contemplate the thing we ting in place. The other area to win. haven’t been contemplating. where the U.S. is interesting Test. Make choices. I hate the is social media and digital. Switching gears, in what absence of choices. Get special access to these The American woman is area of this vast company For the rest I tend to be a extremely connected and is you find yourself in now chameleon. With somebody member-only bene!ts: evolving rapidly. I don’t think do you think you can have who needs guidance, even if s Top business, marketplace we as an industry are evolv- the biggest impact? I need to get into the service ing at the same speed. I can very much change level in supply chain, I’ll do & retail news The only thing that the the status quo. When you it. If I’m with somebody I U.S. beauty market doesn’t do come in as a newcomer, you need to have a coffee with s Industry leader interviews well is fragrance. By having can play the usual game of and talk about what’s going no barrier to entry and focus- challenging everything that to be the next frontier for a s Proprietary beauty ing on promotion, you are is done and seeing where we brand, I’m going to do it this making that exactly the oppo- can do different. way. I work on trust, and I trend reports site of a luxury category. It In the Americas regions, like to “inspirate.” becomes almost a commodity. I can increase the synergies We make choices together. LIMITED TIME ACCESS between the different brands. And if we have successes, Where do you think The brands used to work a lit- we celebrate them, we push CLOSES 12.18.15 the big opportunity is? tle bit in silos, but there are a them to the maximum. Some There are a lot of oppor- lot of synergies. For example, people get a lot of comfort tunities, because Americans when you talk to retailers you with routine and repetition. Become a member today! consume and spend much have more weight with all the I am not one of them. I love more than [those in] any brands around you. In terms change situations. I’m not the country in the world. In peri- of knowledge, Bare Escen- best manager, I’m the best ods of crisis the first country tuals is a very well-known leader. ■ CEW.org/BeautyInsider BEAUTY!BULLETIN

EYE CANDY The Bold and the Beautiful At the spring collections, the hair and makeup looks weren’t for the faint of heart.

1 2 1 2 3 Bangs Braids A forehead-grazing Twists and plaits fringe was a major gave hair textural focal point for drama. spring.

3 4 From punk rock Often more Blade (Saint Laurent) to Runner than princess (Duchess of schoolgirl, braids Cambridge), bangs ranged from edgy are the new brows. and eclectic to They were blunt, chic and simple. At bobbed, ﬂattened to 4 Haider Ackermann, the forehead here, Tokyo-based stylist soft and voluminous Katsuya Kamo used there, and seen on small braids as well some of the hottest as strands of silk models of the and brightly colored season. hair pieces to create fantastical looks. 5

1. Acne Studios 2. Sacai 1. Public School 2. Desigual 3. Christian Siriano NO 4. Wes Gordon 3. Esteban Cortázar 5. Saint Laurent 4. Haider Ackermann

1 1 2 Curls Red Sexy and insouciant, curls captured the Bye-bye blue. spirit of individualism Red was rampant for the season. on the runway.

Model Mica In a season rife with Arganaraz’s Spanish inﬂuences, e"ortless tousled red was a recurring ’do catapulted her theme for fashion to model-of-the- and beauty. A bare moment status this face with a bold season, and she cherry lip reemerged 4 wasn’t the only girl as a go-to look, and with curls who was many makeup artists front-and-center. A also took liberty with more pronounced the hue, sweeping it emphasis on texture on eyes and cheeks was one of the main as well. directions for spring. 2 3 4 5

1. Jason Wu 1. Alexander Wang 2. Stella McCartney 2. Chloé 3. Giambattista Valli 3. Diane von Furstenberg 4. Céline

4. Sophie Theallet 5. Nina Ricci DOMINIQUE GIOVANNI GIANNONI,BY PHOTOS GEORGE MAÎTRE, CHINSEE,RUNWAY DELPHINE TODD MATARAZZO, KYLE ACHARD, ERICKSEN, JOHN AQUI

16 WWD BEAUTY INC

BEAUTY!BULLETIN

ENTREPRENEURIAL EDGE Balancing Oils are still red-hot—growing 22 percent in the prestige market according to The NPD ACT Group. But are powders the next big thing? This fall, there’s a host of both for hair and skin. Battles with acne led former Wall Streeter Here, a lineup of the latest innovations—wet and dry. By ELLEN THOMAS Marisa Vara Arredondo to start Phace SHELF LIFE Bioactive, her new skin-care line.

ARISA VARA ARREDONDO strug- gled with acne throughout her teens Slick vs. Sec and well into adulthood. “I was pre- Alterna Haircare Moisture Shu Uemura Straight- Kevin Murphy Doo.Over Dry Rodin Olio Lusso Facial scribed everything,” she says, tick- Intense Caviar Oil Crème forward Blowdry Oil Powder Finishing Spray Cleansing Powder ing off Accutane, antibiotics, steroid Pre-Shampoo Treatment A combination of gliding Kevin Murphy’s new styling Linda Rodin may be the injections and more. “I’d run the gamut on horrific Abyssinian oil, rich in agents found in foundation product performs double queen of skin-care oils, M omega 9 fatty acids, gives and antioxidant-rich-black duty, designed for reviv- but this granular cleansing experiences.” But it wasn’t until years later, when dry, coarse hair a moisture cumin oil coats hair for a ing flat styles or restyling powder that exfoliates when she was working as a Wall Street analyst research- boost in this pre-shampoo flatiron-mimicking e"ect second-day blowouts, with mixed with water marks a ing biotechnology stocks, that the Harvard Busi- treatment. $30 and halves styling time.$39 a fine powder spray that move for her brand into new provides volume, texture territory. $45 ness school grad had a breakthrough while meet- René Furterer 5 Sens Remington Triple and hold. $27.50 ing with scientists from Merck, who taught her Enhancing Dry Oil Infusion Straightener Living Proof Perfect Hair about the skin’s pH levels. From her research, she This blend of plant oils A proprietary blend of oils Carol’s Daughter Monoi Day Dry Shampoo for skin and hair is said to is infused directly into the Repairing System Condi- Living Proof developed a discovered that the products she was using were capture the fast absorption porous ceramic plates, and tioning Dry Shampoo proprietary technology stripping her skin’s acid e"ects of dry oil without reinforced with micro-condi- This utilizes the brand’s for its first foray into dry mantle, rather than pro- sacrificing the nourishing tioners designed to transfer signature repairing hair shampoo, a powder-based benefits of a regular ver- onto hair during the flat-iron ingredient, monoi oil, for a formula said to eradicate— tecting it. Thus was born sion. $52 process without leaving be- dry shampoo formula said not just absorb—oil, sweat Phace Bioactive, a seven- hind a greasy residue. $38 to strengthen and condition and odor. $22 item line formulated with as it cleanses. $22 optimal pH levels to keep skin conditions in check.

1. Drew Barrymore The range launched on THURSDAY, SEPT. 24 (CIPRIANI 42ND STREET) THE DREAM BALL 2. Gina Boswell its own Web site in Janu- Tra !c may have been a nightmare because of the pope’s visit in New York, but that didn’t 3. Lesley Seymour ary, on saks.com in June stop the leaders of the beauty industry from turning out in full force for the 31st annual 4. Pamela Baxter Dream Ball, honoring Gina Boswell, executive vice president and general manager of Unilever 5. Thia Breen and is rolling out to select Phace in the U.K. and Ireland, and Lesley Jane Seymour, editor in chief of More and executive 6. Marc Rey Saks doors this fall; prices Bioactive director of Meredith Corp.’s Beauty Center of Excellence. Three-hundred-seventy-ﬁve people 7. Carlotta Jacobson range from $38 to $104 for attended dinner and another 300 the after party; all told, the evening raised $1.5 million for 8. Terry Darland Prices range the Look Good…Feel Better program that provides emotional support for cancer patients. 9. Patrice Louvet the Rejuvenating Décolleté from $38 10. Alex Keith Cream. Star items include to $104 the Illuminating Serum, $92, a vitamin C-based dark spot corrector that is said to ﬁrm skin. “The concept of pH balance is a dense topic to explain, so I 5 launched with a clear Web site,” says Arredondo, who wants to expand into television, too. Going 4 forward, Arredondo envisions a broad scope 1 6 3 for the brand, including hair, body and supplements. “I take a holistic view of skin 7 2 care,” she says. “There’s so much that

8 9 goes into living a balanced life.” — E.T. CHINSEE GEORGE BY PHOTOS 10 MARCH 2016 17 TH - 20TH COSMOPACK 18 TH - 21ST COSMOPROF BOLOGNA (ITALY) FAIR DISTRICT www.cosmoprof.com

Organiser - BolognaFiere Cosmoprof S.p.a. - Milan - Italy ph. +39.02.796.420 - fax +39.02.795.036 - [email protected] - company of in cooperation with BEAUTY!BULLETIN

SHOPPER STALKER The Buy Side “I have a friend NYX Soft Matte ELLEN THOMAS heads to SoHo’s bustling Broadway “This makes who uses this Lip Cream in my skin color, and I Cannes, $6 to ﬁnd out who’s buying what—and why. look really, wanted to try it,” really good,” Lopez says. Liu says.

“These are really cheap Yves Saint Laurent and really Rouge Pur Couture L.A. Girl Semi- good.” Fullips Lip Kiss & Love Edition Permanent Enhancer in in Le Orange, $36 Endless Auto Small Oval, Lipliner in $20 Natural, $5 A salesperson Josie Maran recommended Nirvana Hydrating Givenchy Lopez’s sister Treatment Mist, $38 Photo’Perfexion start with the Fluid Foundation in smallest size. A sales Perfect Vanilla, $50 associate told Liu that “I always carry lipstick in this is more my bag, and this is a good Liu was out of nail hydrating everyday color,” says Liu. polish remover, so and natural she snapped this up “I needed than the at the cash wrap. a color Fresh toner to match she’d been the NYX lip using. color,” says Make Up For Ever the shopper. “I will carry this around Invisible Cover in my bag,” Stick Foundation says Lopez. in Flesh, $43 Morphe Pointed Bu!er, $12.99, Japonesque HD and Flat Eyelash Curler, $14 Bu!er, $15.99 Sephora Instant Nail Polish Ardell Natural Remover, $9.50 Eyelashes Wispies, $3.99

Lopez says “The sales she prefers associate said a natural it was more What’s in makeup What’s in moisturizing, look. which I need,” Katherine’s bag? Zoey’s bag? she says. TOTAL SPENT: TOTAL SPENT: $84.89 $192.16

SEPT. 18, 4:42 P.M. MISSION: SEPT. 18, 12:45 P.M. MISSION: Ricky’s IMPROMPTU Sephora REFILL HER FAVE 590 BROADWAY SHOPPING TRIP 555 BROADWAY FOUNDATION

HEN IT COMES TO BEAUTY, 24-year-old Best Buy employee Kath- OEY LIU, A 25-YEAR-OLD graphic designer from Jersey City, popped erine Lopez is always prepared for an impromptu shopping trip. into Sephora for a refill of her favorite Givenchy foundation. “I look for W“My sister and I follow Kathleen Lights on Instagram and YouTube, Z quality, and I really like Givenchy makeup,” she says. With the help of and I read product reviews online,” she says. “I keep a running list of what I a sales associate, Liu also picked up a few impulse buys, including a Make Up want.” After completing an errand nearby, Lopez, who spends $1,000 each year For Ever foundation stick to pair with her go-to formula. “He recommended I on beauty, couldn’t resist stopping by Ricky’s to cross a few items off her list. combine the two on my T-zone for lighter coverage,” she says. Liu, who spends Though she admits to shopping more regularly at Sephora, Lopez heads to about $2,000 annually on skin care and makeup, eschews advice from magazines Ricky’s for makeup brands like NYX and L.A. Girl. “It’s hard to find NYX at a in favor of recommendations from knowledgeable friends and online product CVS,” she says. Lopez, who says she’s the beauty guru in her family, also picked reviews. She also doesn’t shy away from in-store assistance. “I like being helped up a Fullips Lip Enhancer for her 21-year-old sister. “If anyone needs makeup and introduced to new things,” she says. “If I find something better than what

for a special event, they’ll come to me,” she says proudly. I’m using, I’ll switch. I can always shop for more beauty stuff!” CHINSEE GEORGE BY PHOTOS PRODUCT

20 WWD BEAUTY INC ADVERTISEMENT RECOGNIZING EXCELLENCE IN LUXURY SERVICE L’ORÉAL LUXE IS PROUD TO PARTNER WITH WWD BEAUTY INC TO RECOGNIZE KIEHL’S STORE MANAGER LUCIA SILVA FOR EXCEPTIONAL CUSTOMER SERVICE IN LUXURY BEAUTY.

In partnership with WWD Beauty Inc, Kiehl’s, a brand of L’Oréal Luxe, recognizes Beauty Advisors who best exemplify the L’Oréal ideals of customer service in luxury beauty. In this issue we honor Kiehl’s Store Manager Lucia Silva of Aventura, Florida. “It’s not about selling products - it’s about the customer.”

Lucia believes excellent service means helping customers identify their skincare goals and concerns in order to select products that meet their needs. “Engagement starts the minute a customer enters the store. The Kiehl’s customer experience is “We have tools to help customers a complete Circle of Service, and understand their skin.” the core is making sure we give our customers the products that are

Dermatologist SolutionsTM Powerful- Strength Line-Reducing Concentrate is Lucia’s favorite product. “I love how it improves the appearance of lines “When they see the change in their skin, they return to Kiehl’s.” and transforms my skin’s texture.”

Go to: kiehls.com/careers to learn more about Lucia’s commitment to luxury service.

“Making a genuine connection builds trust and loyalty.” LUCIA SILVA KIEHL’S STORE MANAGER AVENTURA, FLORIDA

THEMeet the beauty industry’s most innovative thinkers. O RIGIN A LS

WWD BEAUTY INC 23 Katia BEAUCHAMP Cofounder and Chief Executive O!cer, Birchbox

THE In just ﬁve years, Beauchamp has built her original pink cardboard box concept into a multifaceted, multichannel O RIGIN A LS beauty player. “The bi#est change is that change is accelerating. Things looked the same for decades before there was signi$cant evolution. With digital and mobile, the changes are and eauty has always favored will accelerate — from Jen Shashi manufacturing to the the bold, the people whose ATKIN BATRA channel itself to the B Celebrity Hair Stylist Founder and brands people buy.” willingness to push past and Founder, Chief Executive O!cer, Credo Beauty the status quo can pay o! big Mane Addicts This hot hairstylist is parlay- Ben time. In a sea of sameness, the ing her sizzling Hollywood BENNETT clientele into a thriving social Founder and media presence and—soon creative director, men and women on this list have —namesake product line. Hatchbeauty shown a willingness to do just “We’re always looking for fun that. Their bravery in forging new ways to engage. Industry vet Batra, ex-Sephora, I love Periscope Lauder and Victoria’s Secrets, paths in product development, has now set out to reinvent the because I can ask naturals category for a new distribution and communication people exactly generation of shoppers. what they want This product-development pro have created a new direction for to see and make “I see the personal- has married some of mass’s it happen. Our care space on a largest retailers, from Costco to the industry, one that recognizes team has an open parallel with the CVS, with celebs and artists for a winning formula in the area of thread where food industry. proprietary brands. and responds rapidly to the we constantly This generation of fundamental changes wrought brainstorm and consumers is very “The body-care bounce ideas o" curious about the category is desperate by the digital revolution, by each other. I also impact of what for innovation. We’ve use Snapchat to they consume. seen enthusiasm rapidly changing demographics engage consumers. The personal-care in devices for body, Instead of clo#ing industry cannot but consumers have and by consumers’ driving an Instagram feed, sustain the cost of not adopted the you can get fun their traditional concept of caring for desires for beauty products they and creative on spin and continue to the skin on their body can believe in. Here, the people Snapchat. When I disregard the impact as they do for their post a product or we have on health, faces. A disruptive who point the way forward. tool, I have at least society and on the new concept for 300 people taking environment in body could open the By JENNY"B."FINE screen grabs.” general.” %oodgates.” 24 WWD BEAUTY INC Sylvie John Michael Julien C H A N T E C A I L L E DEMSEY DUBIN FAREL President and Chief Group President, Chief Executive O!cer, Chairman, Executive O!cer, The Estée Lauder Dollar Shave Club Julien Farel Group Chantecaille Cos. Inc.

Demsey has developed an unerring instinct when it comes to creative genius and a management style that allows entrepreneur- ialism to flourish in the context of a Fortune 500 company. From viral video to In the age of fast services, Farel Jo Chantecaille created a “I’ve always category disruptor, Dubin has doubled down on luxury with brand of firsts when she has amassed more than a 10,000-square-foot salon and HORGAN launched Prescriptives enjoyed shopping 8 percent market share in spa and antiaging hair-care line Founder, in 1979; now the driving force in highly curated, the men’s cartridge market that emphasizes scalp health. Mecca Cosmetica behind her namesake line, high- concept retail since launching in 2012. and Mecca Maxima she continues to produce environments, and “The consumer some of the most interesting “We encourage Horgan has become and e!ective products on I love that they are is looking for Australia’s second-largest the market. becoming more employees to quality products beauty retailer and continues contribute their to gain market share despite and more immer- and memorable multinational incursions “The promotional sive and interactive. ideas, and we provide experiences into the market. and GWP system is Through custom- opportunities to wherever they go— ready for retirement! ization, collabora- bring these ideas to online and in the “The bi#est change The relationship tions, social media life. For example, retail environment. is new brands with the customer is conversations or we recently held a Operating this launching without changing.” online experiences, Hackathon with omnichannel using traditional the best of retail teams across the strate& and scaling distribution Glenn & today is a mash-up company creating a it on a global level is channels and Shannon of fashion, beauty, variety of innovative ripe for disruption.” instead using art and culture, projects. Several of content and the Web DELLIMORE both real-world those projects have to connect with the Cofounders, been greenlit.” customer and build Glamglow and virtual.” Sylvie GANTER & a consumer base.” Christophe CERVASEL Carisa Creators and Founders, JANES Atelier Cologne Founder and Chief Executive O!cer, Hourglass Cosmetics Talk about hitting pay dirt: The combination of their proprietary “magic mud” with a broad international distribution network proved to be a meteoric path to profitability. With their singular focus on “Consumers have one primary olfactive category and a philosophy that puts the The antithesis of a me-too an ever-increasing customer first, husband and product creator, Janes has an desire to experience wife Ganter and Cervasel have uncanny ability to reimagine crazy, weird and paved a new path forward for color cosmetics and render modern perfumery. instant cosmetics them one-of-a-kind. in experimental, fun “Spontaneity and “I’m intrigued retail environments. playfulness allow by what Modern This, along with for creativity. We Meadow and their acceptance never formally sit other biomaterial of brands that down for meetings. innovators are deliver unexpected We exchange ideas creating, building, solutions, creates as if we were playing and driving in a recipe for ping-pong…and we biodesign. Their interesting and immediately put work is pointing exciting products.” in motion the ideas us towards a more we love.” sustainable future.” WWD BEAUTY INC 25 Christian Marla Calvin LOUBOUTIN MALCOLM MCDONALD Designer President and BECK Chief Executive O!cer, Cofounder and Sephora Americas Chief Executive O!cer, Bluemercury After selling to Macy’s for $210 million, Beck continues to soar, opening doors and expanding her private-label empire. The prices are outrageous, “Younger consumers but Louboutin’s beauty product packaging is unlike are used to Uber and A relative newcomer on the market—in a good way— e-commerce, instant to the beauty category, Fran çois Vasiliki as the queue of customers dinner delivery and McDonald has proven to be lined up to buy would no a fast learner, as his emphasis NARS PETROU doubt attest to. more. How do we on education and upcoming Founder and Global Senior Vice President, integrate products “Store of the Future” attest to. Creative Director, Unilever “I want to create and services at the Nars Cosmetics “The skin-care objects of desire, pace she expects? We Nars has kept his brand just like my have a concept called category has an on the cutting edge of cool identity crisis. by continually pushing the shoes. My teams the X-Bar, where envelope with unexpected are encouraged we perform fast Clients don’t collaborations and an always- to see beauty services with instant understand how decisive eye for what’s next. in everything e"ective these bene$ts linked to a “The next $ve and allow that products can be. new launch. It gives years will bring a The industry’s eyes are on to inspire them us a high-touch way Convincing them Petrou as she leads Unilever’s consumer-driven prestige business into the future, in their creative will be a winning to introduce clients marketplace but she herself is firmly process, whether strate&.” focused on global culture—and to new products that we’ve never it be food, travel, its impact on beauty. through a ‘try it quite seen before. furniture, nature.” quick’ sensory Nothing is o" “Framing our industry experience that limits. The brands as ‘beauty’ is, in itself, goes beyond self- that will win are the ripe for disruption. experimenting with ones that take risks The future is about an open-sell tester.” and di"erentiate helping people realize themselves from their full potential by everyone else.” giving them highly personalized products, services and ex- Laura periences—not selling them miracle claims. NELSON The ‘beauty industry’ & John fails to recognize the NELSON highly individualized President and Chief goals and emotions Executive O!cer, of each person, and respectively, how those change Seed Beauty over time. I look at the whole person, and key to that is being sensi- tive to the fact that a lot of people may not subscribe to outdated beauty paradigms. Concepts of identity Quickness counts at Seed, the incubator founded by sister- are shi'ing fast, driv- brother duo Laura and John en by Millennials who Nelson that launched Colourpop, the hot Instagram beauty brand. refuse to be catego- rized by old-fashioned “We promote cross- limitations, and are functional teamwork instead creating their and speed. For us, own standards by ideas win, not titles.” which they live.” 26 WWD BEAUTY INC Marc Alli Alicia PUIG WEBB YOON Chairman and Chief Founder, Drybar Founder and Executive O!cer, Chief Executive O!cer, Puig Peach and Lily

Yoon has become the queen of the Korean beauty scene, thanks to her unerring instinct for great products and a unique business model that marries wholesale and retail.

Webb’s blow-dry bar concept “How products kicked o! a salon revolution, and are made is ripe Just over a decade ago, with her rapidly expanding prod- Puig was posting operating uct line, her inﬂuence continues for disruption. losses. But with his emphasis to grow exponentially. With 3-D printing, on originality and the art of smaller batches perfumery, Marc Puig has “Lashes are ripe for helped restore the family ﬁrm’s can be made innovation! I love fortunes—and the designer and at-home fragrance category, too. getting eyelash ex- tensions and know creations can “The retail it is becoming a big seriously rival what experience is key, trend. Yet I don’t feel manufacturers especially in the like anyone is doing can make. Also, fragrance market, it quite right yet.” how products are which is highly retailed—with competitive. augmented reality, Retailtainment is Charlotte there’s a whole a challenge we TILBURY di"erent level of Founder and need to embrace. Creative Director, try-before-you-buy Our ener& is Charlotte Tilbury Beauty that’s possible. And focused on creating Emily Anastasia how products are unforgettable WEISS SOARE discussed—digital experiences, Founder and Chief Founder and communities are translating the Executive O!cer, Chief Executive becoming better storytelling into Into the Gloss O!cer, and Glossier Anastasia at self-organizing the point of sale.” Beverly Hills to have deeper conversations with Eyebrow guru Soare has built Her client list reads like a Holly- her 15-year-old brand into a those interested in Gregg wood who’s-who, but it’s Tilbury’s makeup powerhouse thanks girlfriend-to-girlfriend approach the same topics.” to a social media strategy RENFREW to beauty that has made her line that has netted more than six Founder and Chief the launch to watch. Executive O!cer, million followers. Beautycounter “The lines of age Stylish, savvy and “There’s going and gender will superconnected, Weiss has to be a shi' over blur even further expertly parlayed the power of to e-commerce, her hip online community into in the next 10 a hot new product line. apps and videos years. In skin care, as mobile sales I’m working with “My bet is that dominate. very sophisticated we’re going to see Traditional textures that give Call her the queen brands start to retailers will of clean: With her an incredible direct-to-consumer move away from this need to create ethereal glow. Skin brand, Renfrew has ‘sex sells’ focus in new business care will become shown safe beauty beauty marketing. models and ideas can be chicly customizable on a pragmatic rather We believe that to sustain and mass level and we than dogmatic. being yourself, retain customers. can expect some being honest and Millennials will incredible advances “The entire beauty authentic sells. continue to be in the stem cells industry is ripe We’re taking a a driving force. $eld for hair, skin for disruption.” chance that women Brands need to be and teeth. I expect will respond to accessible, %exible to see makeup this reclamation and ever-changing evolve to very high- of beauty and their —like their de$nition, near- bodies.” consumers.” invisible textures.” WWD BEAUTY INC 27 Don’t let the peace sign fool you... Led By Alan Jope, Unilever’s Personal Care Division Is Going For Global Dominance

By JENNY B. FINE Photographed by JUDE EDGINTON

28 WWD BEAUTY INC WWD BEAUTY INC 29 HE ANNOUNCEMENTS THIS SUMMER CAME RAPID-FIRE, LIKE SO many jets taking off from the deck of an aircraft carrier in precise formation. ¶ Unilever’s acquisition of Camay and Zest complete. Zoom. ¶ Unilever to acquire Ren. Zoom. ¶ Unilever to acquire Dermalogica. Kate Somerville. Murad. Zoom, zoom, zoom. ¶ At a time when much of the industry was busy speculating about who was going to buy the myriad beauty businesses Procter & Gamble Co. was shedding, Unilever, its largest rival, was soaring, doubling down on personal care with a string of deals that are reshaping the competitive landscape of the beauty industry. ¶ At the controls sits Alan Jope, Unilever’s president of personal care, who took over leadership of the division—the company’s largest—just 14 months ago, in September 2014. ¶ Since then, he’s taken the mandate to escalate Tthe Anglo-Dutch giant’s personal-care business and ﬂown with it. “We are an 18 billion euro [$20.4 billion at current exchange] personal-care business right now and I expect to put 10 billion euros onto that in the coming years,” Jope says. “That’s pretty hefty growth.”

Thus far, he’s off to a promising start. For the third quarter of 2015, Unilever’s personal- care division had underlying sales growth of UNILEVER’S SALES 6.2 percent to 5.1 billion euros, compared to company-wide growth of 5.7 percent, driven BROKEN DOWN BY GEOGRAPHY partly by the successful launch of deodorant dry sprays in North America across a host (IN BILLIONS OF EUROS) of brands, which have posted first-year sales of 100 million euros in the U.S. and Canada alone. The Americas Europe Asia/AMET/RUB* But for Jope, this is only the beginning. When an observer remarks that he’s had € €13.2 € a great first year, his response is immedi- 15.5 19.7 ate. “No. I’m moderately happy,” he says. *Asia, Africa, Middle East, “Approaching satisfaction is how I would Turkey, Russia, Ukraine and Belarus describe these results.” When asked how he would define great, € his response is decisive. “A sustained run at TOTAL: 48.4B this level.” While Unilever’s core group of powerhouse, billion-euro personal-care brands such faster-growing segment, no matter what time under the auspices of its Unilever Venture as Dove, Axe and Sunsilk will continue to be period or geography you look at. Secondly, it’s Fund umbrella. While Jope’s predecessor, We don’t a key growth engine for the kind of growth all white space,” he continues. “If we launch Dave Lewis, who decamped to become chief want to Jope envisions, it’s emerging categories and another mass-market shampoo or skin cream, executive officer of the troubled U.K.-based countries that present the most white space there will be an element of cannibalization. supermarket chain Tesco, had spoken ellip- play in for Unilever. At the top of the list is the pres- But as we step into the prestige business— tically about Unilever’s plans to increase its prestige tige market. The strategy is to capitalize on that is all incremental for us.” penetration in the prestige sector, it wasn’t “ Jope says step, but what he really means just as a the company’s core strengths in skin care and until this summer that the company began hair care by moving into premium brands is jump. More than a decade has passed to make good on that promise by putting its niche where product prices start at $25 and rise since Unilever divested its prestige beauty money where its mouth is with its string of activity... from there. holdings—Elizabeth Arden and Calvin Klein acquisitions. This is a “We don’t want to play in prestige just Cosmetics—to focus on its core mass busi- Thus far, the deals have centered on skin as a niche activity. We want to build it into nesses. At the beginning of 2015, Unilever care, but hair care is on the horizon, too. A key growth a big business,” Jope says. “This is a growth had only two prestige beauty plays—Ilumi- part of Unilever’s strategy centers on estab- play for us.” play for us in two regards: Number one, it is a nage and Ioma—both skin care-related, both lishing a prestige hair-care business, a sector

30 WWD BEAUTY INC that Jope posits Unilever can create and own. that prestige hair care can be a viable cat- “It’s a huge opportunity,” he says. “The other egory. “There are still huge unmet needs major players in hair care have got very big in hair care. Women are constantly experi- UNILEVER’S salon businesses and that creates a conflict menting,” he says. “Globally, the amount of of interest—all of their energy has been going daily hair care bought in salons is relatively 2014 SALES into building salon plays more than retail small. It’s in the single digits. I don’t think prestige hair care.” the industry has put the lever against pres- BREAKDOWN Not so Unilever, whose primary exposure tige hair care.” to the salon sector is via the relatively small Going against the grain of conventional (IN BILLIONS OF EUROS) Tigi, which it acquired in 2009. “We are unen- industry thinking is characteristic of Jope, cumbered by a big salon business,” Jope says. who was most recently president of Russia, “We can go much more pure play into pres- Africa and the Middle East, and learned of PERSONAL tige hair care in nonsalon channels than our his appointment during an early morning call CARE competitors.” from ceo Paul Polman. While he said he was € “There is nobody—the market is waiting initially hesitant to accept—he was only one 17.7 to be developed,” emphasizes Vasiliki Petrou, year into his previous position and felt con- senior vice president, prestige, of Unilever, flicted about the commitment he had made to 37% who was recruited from P&G by Lewis to his team—Jope has clearly taken to personal spearhead the division. care with energy, enthusiasm and a unique That being said, there are some sig- take on the competitive landscape. nificant stumbling blocks: a lack of robust “Our sharpest competitors are now the brands available to buy, for one, as well as local players,” he says. “When we look around anemic category sales, particularly in North the world at who has gained market share in America. Industry sources report Unilever the last five years, Unilever has gained quite a has been looking closely at Living Proof, and bit. The other winner would be that constel- Jope himself mentions the natural hair-care lation of companies and brands that we call FOODS brand John Masters Organics when talk- local players or others,” he says, ticking off ing about the segment. But ask him when companies like Innoherb and Jala Group in € an announcement might be forthcoming China and Wardah in Indonesia (“a wonderful 12.4 and the straight-talking Jope is ready with brand,” he enthuses.) “We are now much more 25% a characteristic quip as a means to deflect concerned to compete effectively against locally the question: “Someone wiser than me said insightful, very responsive players. They are a when you’re looking at an acquisition, there much bigger threat than the names you’re more are three things that matter: strategy, price familiar with.” and timing. And the rank order is timing, timing, timing.” Unilever lifer who has Unilever also plans on building its prestige worked across catego- portfolio through organic growth and brand ries and countries, Jope REFRESHMENT* Someone development. For example, on a global basis, believes Unilever has a € wiser than the company is testing the appeal of Nexxus competitive advantage 9.2 me said as a premium-priced hair-care line. Acquired over other multinationals when you’re as part of the Alberto-Culver deal in May 2011, because of its deep ties in 19% “ Nexxus was a U.S.-based salon brand that the emerging markets. (Jope was recruited out looking at an company took into the mass market in North Aof college by both Unilever and P&G. He acquisition, America. says he, or rather his wife, chose Unilever In the U.K., though, the brand is being because of its central London locale versus there are positioned at the prestige level and is sold P&G, which was based in Newcastle.) three things at Selfridges and, more recently, QVC U.K., In fact, he refers to his wife frequently HOME CARE that matter: where it went 70 percent over target during its and fondly, calling her his adviser and noting eight-minute debut show, according to Petrou. they make all major decisions together. When € strategy, Prices range from 14 pounds, about $22 at cur- appointed to his current post, Jope chose to 9.2 price and rent exchange, for a shampoo and rise to 29 remain in Singapore rather than move to 19% timing. pounds, $45, for specialized treatments such London, so that his youngest son can finish And the as Youth Renewal Elixir and Oil Infinite Nour- high school there. He also has a daughter who ishing Hair Oil. attends Edinburgh University and a son at the rank order While Jope says Nexxus’ hybrid distri- University of British Columbia. “Just for the is timing, bution model is not a blueprint that other avoidance of doubt, my daughter is perfect timing, brands in the portfolio will follow, he believes and the two boys are freakin’ knuckleheads,” *INCLUDING ICE CREAM AND BEVERAGES that its initial success is a strong proof point jokes Jope, a straight-talking Scotsman with a timing.”

WWD BEAUTY INC 31 mischievous sense of humor. Jope’s unpreten- tious demeanor—his daily uniform consists of jeans and Nikes and he carries a backpack rather than a briefcase—belies his rapid ascent to the upper echelons of management, but he’s clearly been able to adapt to Unile- ver’s international mind-set, both personally and professionally. For the personal-care category, Jope believes that ability has enabled the company to grow faster than its competitors. “One of Unilever’s strengths has been our ability to play the global local trade-off,” says the executive, who has lived in Thailand, Shanghai, Singapore and the U.S., among other locales. “We’ve always prided ourselves in having deep roots in local markets and being able to [apply] those insights alongside things that are global scale matters, like technology, access to capital and low-cost manufacturing. Getting that balance right is one thing we’ve done well,” he says, recounting a story about a competitor during his stint in Thai- land who launched hair color into the market with packaging that featured predominantly blonde models. “It is inconceivably stupid,” he says. “Our culture is very international,” says Jope, who today is in London HQ, where he sits with his team in an open-plan office when he’s in town. “If I step outside right now, I will find 15 people with 15 different nationalities.” That level of local understanding is driving another significant area of opportunity for Unilever in personal care: Muslim beauty, particularly in four global regions with large Muslim populations: Southeast Asia, Central Asia, the Arabian Peninsula, and North and Western Africa. “These are some of our most core markets and so we are already almost by accident the biggest Muslim beauty company ne of the keys to Uni- philosophy that was key to clinching the deal in the world,” Jope says. “But there are specific lever’s success in per- with Dermalogica’s Raymond and Jane Wur- needs we’re not addressing. sonal care has been wand, who founded the professional skin- “Are our supply chains halal-compliant? the successful imple- care brand 30 years ago and have reportedly Not always. In our communications, are we mentation of its Sus- turned away interested suitors repeatedly insuring local relevance? We can do a better tainable Living plan, before stunning the industry and accepting job at that. Why do we not yet show hijabi which involves imbu- Unilever’s offer this summer. women in most of our advertising in those ing brands with a purpose—such as Dove and “How about that?” Jope says, a slight parts of the world, yet that is the predomi- Oits global self-esteem campaign. Jope bristles smile turning up the corners of his mouth, nant dress code?” when asked if focusing on markets where when a visitor remarks on Unilever’s suc- Do we turn Jope goes on to enumerate the specific women are often denied the fundamental cess in ending Dermalogica’s long streak of our back and physical needs of Muslim women who wear rights accorded to men is at odds with the independence. What enabled the company walk away or hijabi, from skin-care issues that arise from corporate ethos, and insists that by entering to emerge victorious? Jane Wurwand is pas- do we actually wearing tight-fitting undergarments in a hot a market the company is creating opportu- sionate about a program she established “ climate to wet hair that is wrapped up tight nities for women that would otherwise not called FITE, Financial Independence Through do business before it is dry. “No one is addressing that— exist. “Do we turn our back and walk away Entrepreneurship, which helps female entre- and try to do all the way up to some brands that are rooted or do we actually do business and try to do preneurs establish their businesses. Unilever in Muslim values. We see huge opportunity good by doing business?” he asks. has a program in India called Project Shakti, good by doing there,” he says. In fact, it was Unilever’s purpose-driven which is designed to financially empower business?”

32 WWD BEAUTY INC women living in rural India. “It was so absolutely aligned with what she wanted Dermalogica to be doing that it WHAT Number of Favorite Band: did force her to think that maybe the com- countries lived in: “Don’t have one favor- MAKES Six (Scotland, England, ite. Listening to a lot of pany could benefit by being part of Unilever U.S., Thailand, China, Flume at the moment.” beyond just the commercial scale that we ALAN Singapore) bring,” he says. Words to live by: “O wad some Pow’r the Still—the beauty landscape is littered with TICK giftie gie us, To see consumer product giants, including Unilever, ousels as ithers see looking to capitalize on the attractive profit us!” —Robert Burns margins in prestige but unable to effectively Starbucks order: translate a need-based marketing culture “ 'Builder’s Tea'—two into a want-based one. Jope says Unilever Signature Dish: PG tips and plenty Red Thai Chicken of milk. Should be able will avoid that fate a second time around by Curry (Gaeng Ped Gai) to stand the spoon adopting a basically hands-off policy when up in it." it comes to integrating the new acquisitions. Favorite ice cream flavor: “Our default is to let these businesses run very Sea Salted Caramel independently and be selective about where we can add know-how,” he says. “By choos- Favorite motorcycle: KTM 1190 Adventure R ing the right segments to compete in”—by which Jope means not entering the makeup Longest motorcycle or fragrance categories—“and respecting the journey: Trans Sahara trip cov- autonomy these companies need, we can ering Gambia, Senegal, avoid some of the mistakes that have been Mali, Mauritania, Most-read book: Most countries made by others in the past.” Western Sahara, Chelsea FC match visited in a month: Morocco and Spain programs "No idea. Too many!" Where Unilever will exert its influence is in geographical expansion and research and development. “The new portfolio we’re building creates an avenue for some things personal-care business, where brand execu- manager level and above have been through that have been unaffordable at mass,” he says. tives come for three-day creative ideation the program. But effecting change is easier said “When you start operating with brands that sessions, such as product pipeline innovation, than done, as Jope and Petrou are the first to are priced at $100 rather than $10, technolo- and it serves as central offices and an incuba- admit. “We are quite fast here, but then it goes gies that may not have made it into a mass- tor for the recently created Prestige division. to the machine,” Petrou says. “Now, how do we market brand have got an avenue to come to “People try to do innovation sitting in their get them to move faster?” market and that is exciting for our teams.” As chairs and it doesn’t work,” Petrou says. “You Industry insiders posit that Jope, an avid a company, Unilever reports that it spends need to bring the outside in.” motorcyclist whose LinkedIn page features about one billion euros annually on product To that end, the two-story space features a picture of himself in desert biker regalia, development. While it doesn’t break down myriad sensory areas, one focused on touch has a lot riding on the answer. He is on the the expenditure by category, Jope says that a and manipulables, for example, another a fra- short list of names mentioned as possible disproportionate percentage of that amount grance lab where attendees can create scents. successors to Polman, speculation that Jope is invested in personal care. There’s also a graphic design studio with an himself quickly swats away. “I don’t give it a Although the majority of the acquisitions enormous 3-D printer, studio space for two We are minute’s thought. It’s not my ambition and I thus far are Los Angeles-based (a coincidence, artists-in-residence, who rotate a few times already am consumed by trying to make a success out Jope insists, adding Unilever will not look for a year, and a library with the latest art, fash- of personal care,” he says. geographical synergies in the way the busi- ion and design books. Pitch has even hosted almost by For Jope, success boils down to building nesses are managed), the prestige division is Morning Glory, a drug- and alcohol-free ener- “accident market share in the mid-to-high single digits being overseen out of London by Petrou, an gizing rave held in the pre-dawn hours. the biggest year after year and leaving behind a “bigger, industry veteran with experience both as a The idea is to unleash creativity and the Muslim stronger, healthier” personal-care market. “I’ll futurist and running brands. name itself is meant to connote speed. “Give be very happy if I can do that,” he says, “and me your business pitch in 60 seconds—not a beauty so will our shareholders.” ather than running the divi- 30-page PowerPoint,” Petrou says. company Jope is characteristically blunt when sion from Unilever’s head- “This is a cultural revolution,” she con- in the world. assessing what it will take to do just that. quarters in central Lon- tinues. “Unless you get to a redefinition of “Business is easy to make complicated. In don, Petrou has created a normal, you won’t get to the breakthrough. But there fact, I think all big organizations specialize in satellite hub called Pitch It is about speed and quality. I’m trying to are specific making things too complicated,” he says. “We in London’s hip Shoreditch compete with the entrepreneurs rather than needs have made a simple set of choices and we are neighborhood. There is also the multinationals.” now going to drive those. If we’re right, it will a New York City outpost. Its function is two- Thus far, employees ranging from Unilever’s we’re not work out. If we got it wrong, it won’t. I hope Rfold: It is both an innovation lab for Unilever’s senior executive team to those at the brand addressing.” it’s the former.” ■

ILLUSTRATIONS BY ZOE MORE O’FERRALL WWD BEAUTY INC 33 The beauty sector has been a hotbed of mergers and acquisitions this year, but what happens once the deal is done? Here, an insider’s primer on integrating a small company into a larger one—as seen by both entrepreneurial brand founders and the behemoths who bought them.

By Rachel Brown Illustration by Sam Peet

Suits & Start-Ups

34 WWD BEAUTY INC I stayed to make sure the business was handed “off properly, but I didn’t see a long-term future beyond that.”

The SELLER Side

She walked away with no earn-out provision tying On NYX founder Toni Ko’s Instagram feed, her to the brand she built, and the confidence that the hashtag #5yearvacation, a cheeky refer- L’Oréal could turn NYX into a billion-dollar force in the global beauty market without her. ence to the non-compete clause she signed Ko’s clean departure from NYX is an anomaly. In upon selling her brand to L’Oréal last year, the eight deals for American beauty brands tracked by Intrepid Investment Bankers in the second appears nearly 30 times. It’s on a post of quarter of this year, including Coty’s whopper of a a bikini-clad Ko reclining on a boat in the merger with 43 P&G beauty brands, six entail the purchased brands’ founders staying on board in Grand Caymans, on another of her hands various capacities. In beauty M&A today, selling in brimming with wine grapes in Sonoma and is the new selling out. Charismatic brand founders are prized assets at on yet another of an immaculate view over- a moment in which engaging backstories filled with looking the turquoise waters of the Amalfi visionary inventors are deeply resonant with Millen- nial consumers. “Founder involvement post-acqui- Coast. ¶ “I turned 40 when I was about to sell sition is important. Very rarely is a brand acquired the company. Throughout NYX, I was never where the intention is to kick out the founder on Day One. Many times companies are looking to partner married and I had no children. At that point with founders for the foreseeable future,” says Ven- in my life, I felt I needed balance. I wanted nette Ho, Financo’s managing director who oversees beauty and personal care. “Companies are looking more personal time and to change my life- to keep the magic of the brand and just bring it to style. That’s why I sold,” Ko says. a larger scale.”

WWD BEAUTY INC 35 Historically, the industry falls into two duo is resolute about people were willing to write a $15 million check to camps: some companies prefer not to retain what they should have get something funded. Now, with so much money the founder for a long period post-acquisition done differently. “We around, it’s just as hard to write a small check and and integration; others maintain a long associa- should have had definite get a small return as it is to write a bigger check tion with the founder. The Estée Lauder Cos. roles and responsibili- and get a much larger return. It takes just as much Inc. scooped up Bobbi Brown’s makeup brand You have to ties written out,” Wein- energy, so why not go for the bigger payback? As back in 1995, for example, and she’s still active, know what garten says. a result, we’re seeing small businesses fall by the 20 years later. is important Price agrees that it’s wayside because they can’t get profitable and so they Companies are shifting their approach. imperative for founders don’t get funded, or they’re getting funded at the L’Oréal, not known for retaining founders, to you and to identify the goals they wrong inflection point of their life cycle.” is edging in that direction, particularly with “be ready to have for their roles post- Founders have to be extra careful about choosing brands like Urban Decay and Carol’s Daughter, articulate acquisition. “You are from a buffet of backers. Janet Gurwitch, cofounder which it bought in 2014. Nicole Fourgoux, gen- negotiating and there of Gurwitch Products and partner at Castanea Part- eral manager of L’Oréal’s multicultural beauty your job, can be a fear of asking ners, a private equity firm with First Aid Beauty and division, underscores that founder Lisa Price your worth for too much and put- Drybar in its portfolio, says the field of suitors for continuing on in a leadership role at the brand and why ting people off, but you brands has changed markedly since she sold Laura she founded was a “key factor” in L’Oréal’s you are have to know what is Mercier in the Nineties. “There is so much private interest in the brand. important to you and equity money interested in the beauty space. People “Lisa is not just the face of Carol’s Daughter, required.” be ready to articulate have many more options, and there’s a lot of money but is really rolling up her sleeves to work on your job, your worth, available,” she says. everything from brand strategy to product why you are needed conception, all the way to personally training and then be prepared to or a founder, being clear about intentions on her product line,” Fourgoux says. do the work required,” going in is crucial to picking the right option. For a founder who has lived and breathed she says. “Entrepreneurs F Five years before selling to L’Oréal, Ko a brand since its inception, relinquishing control know that the work isn’t easy. It never is and just brought on HCP & Co. as a minority investor with is often easier said than done. Integrating into the because you get acquired, it doesn’t change who you the purpose of aiding her in erecting a management bureaucracy of a larger corporation requires found- are or your mission or your drive.” team that would ultimately allow her to exit without ers to skillfully alter their roles—and accept that Not surprisingly, price has a tendency to prevail an earn-out. “If you don’t have a team in place, the the authority they had at their own brands can’t be over other considerations during negotiations. company is completely dependent on you,” Ko says. replicated. “A lot of founders, including myself, can Bruno Mascolo, who, along with his brothers, Smashbox aligned with TSG on the way to its be quite controlling and moving from a founder/ceo sold professional hair-care brand TIGI to Unilever sale to Estée Lauder Cos. because former ceo and role to a corporate position is not an easy transition,” in 2009, regrets that he didn’t press for certain cofounder Dean Factor realized the brand needed says Eric Malka, cofounder of Art of Shaving, which demands in the face of a $400 million windfall. “I support and funding. “We were a small but growing was acquired by Procter & Gamble in 2009. would have done a three-year non-compete [instead company,” says Factor in a video for TSG. “We were Malka remained at P&G for only one year after of 10]. I would have probably not given them the at the stage where we almost kind of plateaued.” He the purchase. “I was selling my company to move opportunity to take the Toni&Guy line. The other says TSG recommended Smashbox zero in on hero on. I wasn’t selling it to stay on,” he says. “I stayed thing I would have done is make sure I stay in some products in advertising and, the week after the first to make sure the business was handed off properly, sort of position for a long time to help mix our ad ran based on that recommendation, sales of the but I didn’t see a long-term future beyond that.” culture with the company’s going forward,” he says, brand’s primer surged 30 percent. advising fellow founders, “Don’t be blindsided by the Deal-making is largely a commercial match- olorProof Hair Care founder Jim Markham, amount of money you get offered. Prior to the making process. Good who has sold five brands, including negotiations, work out what you are going to chemistry looms large. CPureOlogy to L’Oréal in 2007, knows that ask for. When you get to the negotiating table, “The most important relinquishing control isn’t his strong suit—and that’s say, ‘If you don’t agree to these things, we don’t part is knowing from why he hasn’t remained at the companies he sold have a deal.’” the beginning that the beyond transition periods. “Some buyers might say, Enormous, untenable valuations can cause union is right. When you ‘Take the thing and run it the way you want it,’ but problems later on, too. Melisse Shaban, founder first meet, are you laugh- I don’t see much of that happening. Most of them and ceo of investment and management firm ing at the same jokes? have rules and regulations you have to play by. I just Chrysallis Consumer Partners, says, “If the Do you find yourself thought it wouldn’t be best for me,” he says. valuation isn’t right from the outset, you’re If the valu- explaining who you are Essie Weingarten and Max Sortino understand going to struggle, because you’re going to be ation isn’t to a room full of engaged what it’s like to run up against the routines of a big wrong and both sides are going to look for people or do they appear conglomerate. When their nail polish brand Essie people to blame. You’ll be forced to look at right from to be making their DVR was sold to L’Oréal in 2010, the founder and former execution as opposed to what might really be the outset lists in their heads,” Price ceo, respectively, planned to continue with the brand the basic business case thesis: ‘We thought this “you’re going says. “You know from indefinitely, but the realities of working within the was going to be a $250 million business, but ‘hello’ if it’s right. You confines of a larger corporate entity became less guess what, it’s not. Now what are we going to to struggle... know and they will know appealing. They stayed active with the brand for do?’ The first thing people do is point to the and both if there should be a sec- about two-and-a-half years following the sale and execution people, but that’s not what it is—it’s sides are go- ond, third and a fourth were consultants for the company until June. “It the business.” meeting. If it doesn’t feel wasn’t a partnership,” Weingarten says. “When The money deluge in M&A is exacerbating ing to look right in the beginning, someone buys your company, there’s no partnership.” valuation creep and making it tougher for for people chances are it will be Looking back at the process to join L’Oréal, the brands to succeed. Shaban says, “Ten years ago, to blame.” awkward in the end.”

36 WWD BEAUTY INC tions, including Le Labo, Glamglow and Frédéric Malle, into Estée Lauder Cos. Ventures. A source The explains: “Lauder tells them, ‘You are not going to be integrated until you reach a certain point in BUYER volume. They’ll have to put budgets together and have strategy meetings, but it’s not as rigorous as it Side is for the bigger brands in the company’s portfolio…. Suits They want to leave them alone as much as possible, at least for now.” The source adds that, theoretically, “It is a lot easier to dispose of the brands if they are In families across America, micromanaging not fully integrated.” Lauder declined to comment helicopter parents are giving way with the rise of on Estée Lauder Cos. Ventures. free-range child-rearing methods. In the beauty t Unilever, recent acquisitions Murad, Der- industry, a similar dynamic is materializing. malogica, REN and Kate Somerville have Aeach kept their individual home offices and ¶ As a new generation of Indies ascends and on a corporate basis are grouped together in the recently formed Prestige Division, which is helmed gets snapped up by industry stalwarts like by senior vice president of prestige Vasiliki Petrou. L’Oréal, the Estée Lauder Cos., Unilever and Murad founder Howard Murad says that in the near term, Murad isn’t being modified much. “What I’m Coty, the process of integrating them into the doing is essentially the same as what I had been larger organization has doing,” he says. Separation is important, says a source, stressing evolved considerably that the track record of mass companies running since the first wave of prestige brands is largely a losing one. “If they try to use the Unilever formula in mass for these brands, indie acquisitions in they will kill them and you will see them selling the Nineties. The new them off in five years. But, if they run them more [independently], they will work,” says the source. thinking: Hands off! Whether it is location, technical know-how or “We’re fundamentally seeing something differ- social media expertise, the bottom line is acquirers ent than we saw years ago,” says Andrew Shore, want to save the components of a brand that make managing director of investment bank Moelis & the brand what it is. “We list the things that will Co. “The bigger companies have recognized that never change, the things that are open to change entrepreneurs shouldn’t necessarily be assimilated and the things that will change,” says John Demsey, overnight into large corporate monoliths. The large group president at Estée Lauder. “You have to have a corporate companies have allowed the culture of really good understanding of the reasons you bought smaller companies to exist, live and remain vibrant.” a brand and what made it special to you, and con- In other words, let indies remain, well, indepen- tinue to ensure that you keep those things special.” dent. Such an approach starts during the earliest To achieve that balance requires a strong leader days. At Smashbox, which Lauder purchased in with a foot in both worlds—the parents’ and the 2010, the integration process began on Day One, acquired brands’—who shields acquired brands from but global general manager Beth DiNardo believes corporate practices that might not be suitable and waiting a couple of months would have been wiser. reinforces to parent companies the consequences of “It is good to have 60 days to do nothing before you “We had a six-month transition services agreement force-feeding the brands those practices. Tim War- start doing anything,” she says. in place for most of our top executives, but it prob- ner, ceo of Urban Decay, views himself as a Secretary DiNardo arrived at Smashbox with the purpose ably should have been longer. It’s about having time of State of sorts. “I spend a lot of time saying, ‘We of soaking up the company’s customs rather than to understand the brand, and where its strengths are not going to do it that way,’” he says. “We have to imposing Lauder’s, a course of action advocated by and weaknesses lie.” have conviction. Our experience shows this business chairman emeritus Leonard Lauder, who advised her Figuring out what makes the culture tick—and model works. There is no reason to dismantle it.” to not have an opinion during her first 90 days at not undoing that—is a chief concern. DiNardo Warner also spends a great deal of time meeting the brand. “He said, ‘You don’t know what you don’t focused on identifying and codifying Smashbox’s 10 with peer brands at L’Oréal. He says, “We almost know.’ In hindsight, it was brilliant advice,” she says. core values—“pave the way for creativity” and “make have somebody full-time creating decks for various In retrospect, Melisse Shaban, founder and chief s--t happen” among them. “We made sure we were presentations to corporate and other countries.” executive officer at investment and management very conscious about living and breathing them,” she In fact, that kind of entrepreneurial mind-set firm Chrysallis Consumer Partners and former says, noting the values were institutionalized in part is one of the vital assets of an acquisition. “Acquir- ceo of Frédéric Fekkai, believes Proctor & Gamble by giving monthly rewards to employees embodying ers want to ensure the secret sauce of the business shouldn’t have absorbed the brand, which it bought them. “The intention was to keep everything from survives,” says Shaun Westfall, managing director in 2008, as rapidly as it did. “You sell to a strategic the culture and make it even stronger.” of consumer investment banking at Piper Jaffray. to position the brand for its next level of growth Distance, both structurally and geographically, “They have changed their approach. They are learn- and development, but you have to be careful not to seems to be a winning solution. According to ing from the businesses they are acquiring because throw the baby out with the bathwater,” she says. sources, Lauder is grouping its newest acquisi- those businesses are quick to spot new trends.” ■

WWD BEAUTY INC 37 THE STAT DEPT. MAKEUP Shake It Up When the NPD Group broadened its coverage of prestige beauty to include specialty, e-commerce and electronic retailing, the impact was seen immediately. Here, WWD Beauty Inc looks at the leaders, by $3.6 $6 category, in the classic prestige channels versus the Billion Billion leaders in today’s expanded marketplace.

PRESTIGE TOTAL DEPARTMENT MEASURED 2011 2014 STORES MARKET

1. MAC 1. MAC

Fine and traditional department and Includes Sephora Inside JCP, Beauty 2. Clinique 2. Clinique specialty stores, including Sephora, Brands, Ulta, other specialty channels; 3. Lancôme 3. Lancôme and the related e-commerce sites. e-commerce sites including Amazon 4. Bare Escentuals and Beauty.com; TV Home Shopping 4. Estée Lauder incl. QVC and HSN; midtier dept. stores 5. Chanel 5. Urban Decay including Kohl’s, Sears and the Military.

SKIN CARE WOMEN’S FRAGRANCE

$3.1 $5.2 $2.1 $2.6 Billion Billion Billion Billion

2011 2014 2011 2014

1. Clinique 1. Clinique 1. Chanel 1. Chanel 2. Estée Lauder 2. Estée Lauder 2. Estée Lauder 2. Estée Lauder 3. Lancôme 3. Lancôme 3. Calvin Klein 3. Philosophy 4. Shiseido 4. Clarisonic 4. Dolce & Gabbana 4. Dolce & Gabbana 5. Crème de la Mer 5. Philosophy 5. Donna Karan 5. Calvin Klein

THE SURGE

BRANDS NEW TO THE TOP 20: ¬ MAKEUP: Tarte (13), It Cosmetics (14), Too Faced Cosmetics (15), Anastasia Beverly Hills (17), Stila Cosmetics (18) ¬ SKIN CARE: Wen by Chaz Dean (8), Peter Thomas Roth (15), Murad (16) ¬ WOMEN’S FRAGRANCE: Philosophy (3), Viktor & Rolf (15), Michael Kors (17)

38 WWD BEAUTY INC Source: The NPD Group sense provocateurs

International Flavors & Fragrances Inc.

, ® The Classic Bottle

, ® COCO , Inc. ®