www.bwconfidential.com The inside view on the international beauty industry December 4-17, 2014 #102

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The buzz 2 Criss-cross beauty News roundup ust as more beauty brands are opening standalone Netwatch 6 Jstores, retailers are taking more interest in widening their own-brand offer. And this is not only in the form Beauty blogger review of traditional private-label products. Through its private- label product development division Kendo, LVMH-owned Interview 7 has developed a string of brands that are not L’Occitane md travel retail under the retailer’s own name, such as Formula X nail worldwide Marcin Jasiak polish and Kat Von D (meaning the customer doesn’t know she is getting a store brand). Kendo also just Insight 9 announced that it would acquire Canada-based make-up Canada’s prestige market brand Bite Beauty. (LVMH also noted Kendo has been spun off from Sephora and that it is now a separate entity at the group.) Another example is UK-based Show review 13 retailer Alliance Boots, which has just acquired British skincare brand Soap & LuxePack Monaco Glory. Boots had taken a minority share in the brand in 2011. All this is, of course, in a bid to ensure a more exclusive offer and drive Store visit 15 consumers into the store, as well as achieve better margins. However, suppliers The Body Shop, Brazil that have already complained about retailers like Sephora for what they see as prioritizing LVMH brands and Sephora own brands over others, are unlikely to be happy if more stores look to fill up their shelves with their own products.

Oonagh Phillips Editor in Chief [email protected] Subscribe on p.17 or go to www.bwconfidential.com CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIA CONFIDENTIA L L The buzz Ultimune with €10m earmarkedformediaspend fortheproductinEurope in brand, whichwasakeyobjective. Shiseidoplanstocontinueinveststronglybehind system. Thecompanysaidthe launchhassucceededinrecruitingnewconsumerstothe of UltimuneskincareinSeptember, whichwasbasedonstimulatingtheskin’simmune become atruethree-axeplayer inEurope.Thefirststepthisstrategywasthelaunch The part oftheacquisitionGillette,toholdingcompanyBerkshire Hathaway. years inordertofocusonitsmoststrategicproductlines. sources sayWellaisestimatedtobewortharound$7bn. Reuters. Theconsumer-goodsgroupacquiredthehaircare brandin2003.Industry P&G issaidtobelookingselloffitsWellabrand,according newsagency Middle East. Alliance and president of Global Brands. Alliance andpresidentofGlobalBrands. which ismanagedbyKenMurphy,executivevicepresidentofWalgreensBoots will operateasastandalonebrandwithinAllianceBoots’GlobalBrandsdivision, launch, andAllianceBootsbecameaminorityshareholderinthecompany2011. beauty executiveMarciaKilgorein2006.ThebrandhasbeensoldBootssinceits UK-based AllianceBootshasacquiredBritishbrandSoap&Glory,foundedby opportunities forInnéovemployees. future applications.Thetwogroupsstatethattheyarereviewingemployment say theywillkeeptheresearchbenefitsfromInnéovanditsintellectualpropertyfor Brazil andMexico.Innéovreportedsalesof€52min2013. is distributedinthepharmacychannelaround13countriesEuropeaswell expected bybothpartners,”thecompaniessaidinastatement. joint ventureitoperateswithNestlé.“Thebrandhasnotmetthedevelopment[goals] L’Oréal hasannouncedthatitisterminatingitscosmeticsupplementbrandInnéov,a Strategy Stay informedwithourdailynewsheadlinesonwww.bwconfidential.com News roundup In October, it sold off its Duracell battery business, which it had acquired in 2005 as In October,itsoldoffitsDuracellbatterybusiness,which hadacquiredin2005as In August,P&Gannouncedthatitwouldshed90to100brands overthenexttwo Soap & Glory is currently sold in the US and Canada, Europe, Asia and the Soap &GloryiscurrentlysoldintheUSandCanada,Europe,Asia Soap &Glory’sofferincludesskincare,bathandbodyproductsmake-up.It The jointventurewillshutdowninthefirstquarterof2015.L’OréalandNestlé Innéov ispartofL’Oréal’sActiveCosmeticsdivision.Thebrandlaunchedin2002and At aglance... n n n n

brand is looking to sharpen its profile, widen its customer base and Shiseido brandislookingtosharpenitsprofile,widencustomer baseand Avon reorganizesLatinAmericamanagementteam P&G consideringsaleofWella Alliance BootsbuysSoap&Glory L’Oréal andNestlétocloseInnéovbusiness n n n www.bwconfidential.com -December 4-17,2014 #102-Page 2

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n n n 2015. The brand will also add an eye product to the Ultimune line-up in the second half of next year. In terms of its three-axe strategy, the group is looking to build its position in fragrance, with a major new Shiseido scent slated to launch in the second half of 2015. “The The buzz launch of a fragrance will inject more femininity and emotion into the brand, which is what we were lacking. Fragrance will give the brand a new dimension and is a strong opportunity to bring more consumers to Shiseido,” explains Shiseido Europe vice president marketing and communication Florian Hanhausen. As for make-up, the brand is currently revamping its color range to give it a more modern positioning. The reworking of the line involves new product development, a rethink of its marketing visuals and a focus on star products. “The make-up category has undergone a lot of change over the years, with new brands coming into the market. We need to be more dynamic in this category, sharpen our image and define our unique selling point,” comments Hanhausen. The first major new launch in the reworked line will be a mascara, which will hit shelves in Europe in July next year. As a result of these efforts, Shiseido hopes that make-up will account for 25% of its business in Europe by 2020 (up from under 20% today), while fragrance will represent 10-15% of sales. In other news, the Shiseido group has appointed Shigeru Takano as president and director of Shiseido China. Takano is currently gm of the company’s Asia Pacific Sales Department and gm of its Masstige Business Development Unit, International Business Division. Current senior manager of Asia Pacific Sales Department and Masstige Business Development Unit, International Business Division Tatsuya Nagai will replace Takano in his previous role. Toshihiko Okabe, deputy gm China Business Planning Department, China Business Division, has been named gm of the department. All appointments go into effect on January 1, 2015.

Retail

US department-store retailer Saks Fifth Avenue has opened a new space devoted to beauty services at its flagship New York City location on Fifth Avenue. Called Beauty on 5, the area is located on the store’s fifth floor amid trendy contemporary fashion brands. Beauty on 5 features a nail bar by UK brand Nails Inc offering manicures, a Blink brow bar for brow shaping services and a Trish McEvoy make-up station that provides either touch-ups or full makeovers. In August, Saks opened The Fragrance Library at the store, a fragrance concept devoted to designer fragrance brands.

Niche fragrance brand Kilian opened its first boutique in Paris late November. Located on rue Cambon, just off the city’s premium shopping street rue St Honoré, this is the brand’s third standalone store after Moscow and New York. Covering 55m2 (592ft2), the store was designed by interior decorator Chahan Minassian, who was also behind the décor of Kilian’s other two stores. The Paris boutique blends decorative elements from the Art Deco period and features black and white décor with touches of gold. n n n

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n n n The flooring is made of black marble and the furnishings, designed by Minassian, are inspired by 1920s design. Different areas in the store are personalized to reflect the brand’s fragrance collections: L’Oeuvre Noire, Arabian Nights, Asian Tales, In the Garden of Good and

The buzz Evil and Addictive State of Mind. Customers can sample fragrances in the seated area at the back of the store. In addition to the brand’s offer, the boutique features exclusive collections, including the scented jewelry line, Kilian’s range of small clutches and Noir Aphrodisiaque, a new fragrance to launch in January 2015. People

US-based Avon has reorganized its Latin America management team as part of its turnaround plan. Avon’s Latin America management will now be divided between two of the company’s executives. David Legher, currently svp and president of Avon Brazil, will assume additional responsibility for the South Market Group (Argentina, Chile and Uruguay). Legher will report to ceo Sheri McCoy and join Avon’s executive committee. Fernando Acosta, currently svp and president Latin America, will retain responsibility for North Latin America and the Andean cluster. McCoy said that Latin America is Avon’s largest region, representing more than half of its annual sales, and that driving growth there is a top priority. Acosta will also become head of global brand marketing. Patricia Perez-Ayala, currently svp chief marketing officer and global brand and category president, is to leave the company in January 2015. Avon announced that John Higson, currently svp and president Europe Middle East, Africa, will take on an expanded role as head of global field operations. The company also announced additional moves as part of its $400m cost-cutting program, which will include more job cuts and contract terminations. These new measures are expected to result in pre-tax savings of $40m.

Launches

Parfums Christian is to launch a new serum in its Capture Totale line in January. The serum is said to have a plumping effect and is based on the idea of restoring volume to the skin rather than delivering a lifting action. The serum will come in a refillable bottle and retails at €180. In make-up, Dior will introduce a new foundation, which it describes as a n n n News roundup

n n n complexion serum. Called Diorskin Nude Air, the foundation is billed as a true hybrid of skincare and make-up, which allows the skin to breathe. The foundation is based on Oxygen Activ technology, a combination of plant oils, vitamins and minerals, which is said to deliver energy to the skin’s cells. When the foundation is applied, the oils instantly The buzz evaporate, leaving only what the skin needs on the face. The foundation comes in nine shades and is accompanied by a range of powders featuring the same technology. The powders are also said to have properties that act as a barrier against pollution. Also in make-up, the brand will unveil Rouge Dior Brillant in April, a lip gloss that is said to be close to a balm given its skincare benefits. The gloss’ applicator is also said to deliver the precise amount of formula to the lips. It comes in 12 shades. On the fragrance front, Dior will launch a hair mist for Miss Dior, which the brand says will enable consumers to apply the fragrance in a new way. The 30ml bottle retails at €41.

US-based skincare brand GlamGlow is moving into a new facial skincare category with the launch of a daily cleansing line in January 2015. “We’re building product families around our main treatment products,” explains co-ceo Glenn Dellimore. The four-sku line is comprised of Youthcleanse, a daily exfoliating cleanser with anti-aging claims, Supercleanse, for problem skin, Thirstycleanse, for dry skin and Powercleanse, which is said to have nourishing and skin renewal properties. The Youth, Super and Thirsty cleansers are dispensed as a mud, and turn to a foam when applied to the skin. Powercleanse has a dual pump that dispenses the mud from one pump and an oil from the other, which create a foam when mixed. The cleansers come in 150ml formats and retail from $39 to $44.

Trade shows

Trade show organizer ITE Beauty Events expects next year’s BeautyEurasia event to set new records in terms of visitor and exhibitor numbers. The show, which will take BW Confidential place in Istanbul, Turkey from April 30 to May 2, 2015, is forecasting a 25% increase 4 avenue de la Marne in exhibitor and visitor numbers. The event covers haircare, perfumery, personal care, 92600 Asnières sur Seine, France [email protected] nails, spas and packaging, and for the 2015 edition organizers plan to welcome new Tel: +33 (0)1 74 63 49 61 Fax: +33 (0)1 53 01 09 79 national pavilions from Germany, Austria and Egypt. This is in addition to country www.bwconfidential.com pavilions from France, Italy, Korea, Malaysia and China, among others. ISSN: 2104-3302 Publisher: Nicolas Grob Last year, Beauty Eurasia was taken over by exhibition organizer ITE Beauty Events, Editorial Director: Oonagh Phillips [email protected] which is expected to boost exhibitors and visitors from Russia, the Middle East and Deputy Editor: Alissa Demorest [email protected] Asia (ITE is based Editorial Coordinator & Assistant: in Russia). Katie Nichol [email protected] In 2014, Contributors: Tina Clark, Alex Wynne, Renata Ashcar, Mayu Saini, Raphaëlle Choël, BeautyEurasia Corinne Blanché reported that some Subscriptions 1 year: electronic publication (20 issues) + 9,383 visitors print magazine (4 issues) + daily news: €499 or US$699 attended the event, [email protected] Advertising up 14% from 2013, [email protected] while 550 exhibitors BW Confidential is published by Noon Media 513 746 297 RCS Nanterre from 44 countries Copyright © 2014. All rights reserved. Reproduction in whole or in part without rented booths at permission is strictly prohibited. the show. n

www.bwconfidential.com - December 4-17, 2014 #102 - Page 5 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Beauty blogger review BW Confidential reports on what the bloggers are saying about beauty

Estée Lauder Companies’ (ELC) acquisition of Le Labo has some fans worried that the indie fragrance brand will lose its niche appeal, and that services currently on offer, like the refill discount, will be discontinued. However, some fragrance bloggers hope that ELC will develop the brand as it has done

Netwatch with Tom Ford and Jo Malone, which, they say, have maintained their exclusive positioning.

Bloggers have praised UK retailer Boots’ online No7 Match Made lipstick service, which is said to be successful for even hard-to-match skin tones. The service chooses the best lipstick shade based on the user’s skin tone and lip color preferences. This reinforces Boots’ role as a “beauty authority” says one blogger.

Bloggers have noted an uptick in beard-care products, including oils and balms with products coming out from a range of brands—mass players like L’Oréal Paris and higher-end brands like . Despite the recent interest in beards, some question whether such products are a passing fad, and whether there are real opportunities to develop the segment in the future.

Recent reviews of wearable tech devices have not always convinced bloggers, who describe products, like the Pavlok fitness bracelet that claims to change the wearer’s habits by using electric shocks, as a gimmick. Some, however, see the appeal and the potential for devices that attach to the skin to monitor the body’s physiological needs. The views expressed in this section are those of bloggers and do not represent the opinions of BW Confidential

The inside view on the international beauty industry

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Interview Interview ceo Interview Coty ceo Laurent Boillot Ferragamo Parfums ceo Michele Scannavini Luciano Bertinelli Market watch: Market watch: Brazil What’s next for Mexico, Travel retail: Europe The ins & outs of doing Argentina & Colombia? How the region is faring & business in the country the continent’s top airports Travel retail: Travel retail Brazilian travelers Market watch: Africa Data, digital & How they shop & how The potential & challenges of the CIVETs to reach them the next big region for beauty

Packaging Packaging Packaging Sector outlook & Decoration techniques How make-up packs luxury trends for 2014 & trends are evolving

Insight: Fragrance Insight: Make-up Insight: fragrance creation Global market analysis Doing color better What’s next for the industry?

ISSN: 2104-3302 ISSN: 2104-3302 ISSN: 2104-3302

www.bwconfidential.com N°16 November-December 2013 www.bwconfidential.com N°17 March-April 2014 www.bwconfidential.com N°19 September-October 2014

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DemiPage-210x148NEW.indd 1 07/08/14 11:34 L’Occitane md travel retail worldwide Marcin Jasiak

Interview Asia and beyond L’Occitane managing director travel retail worldwide Marcin Jasiak talks to BW Confidential about the challenges and opportunities facing travel retail and the company’s strategy for the channel

Have you seen a slowdown in travel-retail sales in Asia? It’s the first time in a long time that the business in Asia is becoming challenging. This is partially due to restrictions on Chinese travelers’ spend. The new anti-corruption laws put in place by the government are very strict. Although beauty is less hard hit than other categories, consumers are nonetheless limited in the number of pieces they can buy, so companies need to adjust their strategies. If we look at a major airport in Europe where Chinese travelers made up say 8% of passengers and 18% of sales before the measures went into effect, they now account for less, although the exact impact is difficult to measure. The number of Chinese passengers is still growing, but they are purchasing less in the airport environment, at least for the [Consolidation among time being. retail operators] will There is also the issue of political tension in Hong Kong, which has resulted in lower “ spend. Japanese consumers are also spending less due to the weakness of the yen. It’s put pressure on all hard to judge how this will play out, although Asia will undoubtedly remain the travel- players. The risk is that retail channel’s driver in the future. Asia has been the channel’s engine for a number of years, but it’s going to be a bit tougher now and a lot more competitive. there will be so much This year, we are very happy with our business in Asia, but the optimism level is not focus on commercial as high for the future and there is a lot of caution regarding the next six months. There are also changes to the channel that will impact business, such as Shilla’s concession in terms that building Singapore and Heinemann in Sydney. The business is shaping up to become even more brands will become competitive. Operators are also more global and diversified, and a lot of new brands are entering or plan to enter travel retail. secondary

How are you building L’Occitane’s travel-retail sales in Asia? We are mainly developing through same-store growth. In Singapore Changi, for example, L’Occitane md travel retail we’re going to make a major improvement, as our presence with Nuance was weak and worldwide Marcin Jasiak our partnership with Shilla will be much stronger. We are opening a L’Occitane branded ” café at Changi, for example, and we’re also improving our presence in locations such as Taiwan and Hong Kong.

What is your outlook for the channel outside Asia? We have more than 800 doors worldwide in travel retail. I’m very happy about travel retail’s performance in Europe, and North America is also currently doing well. But the business is a bit more challenging in the Americas as South America is suffering. n n n

www.bwconfidential.com - December 4-17, 2014 #102 - Page 7 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL L’Occitane md travel retail worldwide Marcin Jasiak

n n n There continue to be problems in Brazil. Brazilians have been the engine of growth all over Latin America in the past three years, but that balloon has popped. Argentina is tough and has become a much less attractive tourist destination. Many international brands have shut down their business there, so when Brazilian tourists come in for the weekend, they have a lot less choice. Security issues have also Interview impacted travel, as Buenos Aires, which was always a relatively safe city, is no longer as safe.

What changes are you seeing in the product assortment in travel retail? Major beauty groups are snapping up more brands and trying to dominate the space with their portfolio, so there are fewer independent players, which is a pity. However, there is more demand from airport retailers for local brands that bring something a bit different. Travel-retail operators recognize the need to create alternative [assortments] so that every airport doesn’t have the very same offer. It’s the first time in We’re also seeing a lot of consolidation among operators, but airport operations a long time that the are tricky because they are concession based, so the return on investment schedule “ is set to become shorter and shorter. There will be pressure on all players, and the business in Asia is risk is that there will be so much focus on commercial terms that building brands will become secondary, and that’s a sad scenario. becoming challenging. Although beauty is How are your Melvita and Erborian brands performing? We’re very happy about the development of Melvita. We launched the brand in-flight less hard hit than with Cathay Pacific and Japan Airlines in July, and it debuted on China Airlines in other categories, September. On some carriers, the sales were twice what we had forecast. We plan to launch Melvita in the China domestic market in March 2015. The [Chinese] consumers registration process has already begun and we’ll start out with 10 or 15 shop-in-shops are nonetheless in department stores. (L’Occitane already has 140 stores in the market and we are now developing in tier-three cities.) limited in the number In Europe, we launched Erborian, Melvita and Couvent des Minimes at Roissy of pieces they can buy, Charles de Gaulle in Paris this year. Erborian’s travel-retail focus will so companies need to first be on in-flight accounts, as to adjust their strategies start ground accounts you need products that will sell immediately. There is no longer time to build L’Occitane md travel retail a brand. worldwide Marcin Jasiak For Erborian, it’s still early days, ” but the brand is doing very well in the domestic market in France with Sephora. We finished redesigning the products and we’re preparing to open a first Erborian standalone store in Paris in 2015. n

s L’Occitane is looking to build same-store sales for its L’Occitane en Provence brand in travel retail. The group launched Melvita in the channel this year, while Erborian, which L’Occitane acquired in 2012, is currently focusing on in-flight sales

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s Shoppers Drug Mart is rolling out a new store design for its beautyBoutiques

Canada’s prestige market All change New retail players and concepts are giving Canada’s prestige market a boost

anada’s prestige beauty market is seeing its share of change, from retail Cconsolidation to a continued shift of power from traditional players— department stores—to drugstores and perfumery chains. This comes against a background of steady market growth. According to NPD Group’s Canada The arrival of BeautyTrends report, prestige beauty sales in the year ended June 2014 were up newcomers is by 4% to $1.4bn compared to 2013. “Over the past three years, the Canadian “ market has seen growth of between 3 and 5%. Skincare and make-up are the inviting retailers to main drivers, while fragrance is declining,” comments Estée Lauder Companies Canada general manager Philippe Warnery. think differently [...] Make-up is the highest-growth category in prestige, and saw an 8% increase Competition is not in sales last year, with a number of new brands launching on the market, mainly through Sephora stores. MAC remains the leader in the category, while Sephora a bad thing at is the number-one retail destination for color. this stage Prestige skincare sales were up 4.7%. The category is said to be highly competitive, with the bulk of the market controlled by just a few brands. However, Clarins Groupe Canada general manager Christine Dallaire says that Estée Lauder Companies Clarins skincare, which has a 12% share of the market and is ranked third n n n Canada gm” Philippe Warnery www.bwconfidential.com - December 4-17, 2014 #102 - Page 9 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Canada’s prestige market

n n n in the prestige arena, is performing “exceptionally well”, with growth of 13% last year. Drugstore players control much of the skincare market, while Sephora is said to be weaker in the category. Insight

Fragrance takes a hit Fragrance is the market’s poor performer. Industry figures put the category’s The retail scene growth this year through July at just +1.3%. However, according to Clarins’ is evolving very Dallaire, new launches are helping the category stay afloat. “All three beauty “ categories may be growing, but fragrance is suffering. Growth is generated quickly. In the next mainly by new launches as existing fragrance sales fell more than 10% two to four years last year.” Quebec-based distributor Prestilux president Jacques Pérusse says that the market will although consumption in Canada is much lower than in Europe, fragrance see great change sales are still increasing, albeit at a slower pace. “It’s true that fragrance is not doing well, but the official figures only take into account the primary market with the arrival and not the secondary market. The reality is that fragrance sales are growing, of Nordstrom and but per-capita consumption remains very low. Canadians are sub-consumers of fragrance,” he tells BW Confidential. Saks. The Bay, Saks The category has also been impacted by changes in retailers’ assortments. and Nordstrom will Last year, Sephora began to pull out of celebrity fragrances to focus on brands with more niche appeal, such as Atelier Cologne and Comptoir Sud Pacifique. each have to build (However, Sephora is still a small fragrance player in Canada; the category is their nest, and Holt said to make up only around 6% of its sales.) Other retailers are tweaking their fragrance offer as well. Upscale department- Renfrew will have store operator Holt Renfrew is said to be reducing its number of fragrance skus to reposition itself by around 50% to build an assortment of less widely distributed brands, while Hudson’s Bay-owned The Bay is being more selective about the new launches it chooses to stock. Prestilux president The market’s leading fragrance retailer is drugstore operator Shoppers Drug Jacques Pérusse Mart, which accounts for 40% of fragrance sales in Canada. Sources say that the retailer, which was acquired by grocer Loblaws in 2013, saw its fragrance ” sales rise by more than 4% this year to July. This is due to its wide assortment of more than 50 brands spanning prestige and masstige and because it “pushes the new launches hard,” according to one industry executive. Canada beauty & personal care sales* 2013 $bn Category Sales % change Newcomers shake things up $bn 2013/2012 The balance of power among Canada’s main Skincare 1.73 +4.2 prestige beauty retailers over the past 10 years has shifted as department stores lost share to Color cosmetics 1.50 +4.4 pharmacies, drugstores and perfumery chains. The Fragrance 0.70 +2.3 biggest shift has occurred in the perfumery Mass beauty & personal care 5.03 +2.6 segment. In 2006, the channel, which is basically Prestige beauty & personal care 2.51 +3.8 only Sephora and a few independent players, had Total beauty & personal 9.20 +2.9 a 4.4% share of the prestige market, but by the care (prestige + mass) end of 2013 it accounted for more than 25%. Source: Euromonitor International “Sephora has found very fertile soil in n n n *Retail sales price

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s Nordstrom opened its first store in Canada (top) in September, which along with Saks is likely to result in even more competition for Canadian retailer Holt Renfrew (bottom)

n n n Canada and it is seeing phenomenal growth rates. It has a strong position and has become the market’s beauty authority. In its channel it stands alone,” comments Prestilux’s Pérusse. ELC’s Warnery adds: “Sephora has been the first to create a new high-touch retail experience and is recruiting a host of new All three beauty consumers to the market”. Sephora currently has 46 stores in the country and “categories may be opens an average of seven new doors per year. The big news on the retail scene is the changes happening in the department- growing, but fragrance store landscape. The channel accounted for 64% of prestige beauty sales is suffering. Growth is in 2006 and by late 2013 this share had fallen to just less than 40%. But newcomers are shaking up the state of affairs. In September luxury retailer generated mainly by Nordstrom opened its first store in Canada in Calgary and has five more new launches; existing locations planned by 2017. Saks too is on its way. The US-based chain was acquired by Canadian department-store operator Hudson’s Bay in November fragrance sales fell 2013 (Hudson’s Bay also purchased Lord & Taylor in 2012). Hudson’s Bay, more than 10% which operates 90 stores in Canada, plans to open seven Saks stores in Canada by 2016. “The retail scene is evolving very quickly. In the next two to four years last year the market will see great change with the arrival of Nordstrom and Saks. The Bay, Saks and Nordstrom will each have to build their nest, and Holt Renfrew will have to reposition itself,” explains Pérusse. Clarins Groupe Canada Indeed, Canadian retailer Holt Renfrew stands to lose the most from the n n n gm Christine” Dallaire www.bwconfidential.com - December 4-17, 2014 #102 - Page 11 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Canada’s prestige market

n n n entry of these newcomers. “Holt Renfrew is the most challenged retailer today, as Nordstrom and Saks are clearly out to hunt on its grounds,” says one prestige beauty executive. Holt Renfrew is to close three stores by February 2015, Insight in Ottawa, Quebec City and Winnipeg, and is revamping existing locations. “Holt Renfrew’s strategy is to focus on areas where they have a lot of opportunity,” explains ELC’s Warnery. Despite the closures, Holt Renfrew is expanding its square footage by 40% and will invest in developing its luxury flagship store model in Western Canada, Toronto and Montreal. It will expand its Yorkdale store in Toronto and will open a new door in 2013 outside Toronto. In Montreal it will inaugurate one of its largest doors in 2017 that will feature what it claims will be Canada’s “richest assortment of luxury fashion and beauty brands”. Warnery believes that the changes affecting the retail sector could prove to be fruitful in the long run. “The arrival of newcomers is inviting Canada’s retailers to think differently and to build a new consumer experience. Competition is not a bad thing at this stage,” he comments. However, the arrival of Nordstrom and Saks will create a fragile situation for Canadian retailers’ prestige brands exclusives, given that US retailers already stock many of these exclusive brands. “I’d venture to say that there are basically no more exclusive brands on the market today, so retailers are scrambling to find new exclusives to replace those that they have already lost or are going to lose,” says one beauty executive. Another comments that each deal will have to be negotiated “brand by brand and door by door”. Pharmacies and drugstores continue to be major beauty players. The channel claimed around 31% of the market in 2006, and this share climbed to more than 35% by the end of 2013. Shoppers Drug Mart, Canada’s number-one prestige retailer, has a 33% share of the beauty market and more than 300 beautyBoutique concepts across the country. It is currently rolling out its new “enhanced” beautyBoutique models, featuring expanded floor space, new skincare and fragrance areas and what it calls a “luxurious environment”. The retailer opened the fourth revamped beautyBoutique in August and sources say there could be 50 or so within the next four years. The latest to The niche challenge open, in Toronto, covers 4,000ft2 Canada’s consolidated retail landscape does not make (372m2) and stocks 21 prestige business easy for small brands. Apart from independent brands including Chanel, Clarins, retailers, there are few distribution options. “With three Lancôme, Estée Lauder and Dior. players basically accounting for 75% of the business, small Despite changes in the brands need solid backing to develop. Unlike in the US, department-store arena, industry there are no smaller chains, like Space NK or Bluemercury,” players believe that the main says Prestilux’s Pérusse. Niche make-up brand Ilia founder battle in the years to come will be Sasha Plavic confirms this view. “We are in a few specialty between Shoppers Drug Mart and boutiques in Canada and we tested the waters by doing Sephora. “Shopper’s Drug Mart a pop-up shop in Holt Renfrew. We would like to expand may have powerhouse status in further, and although we’re seeing good results in the Canada, but Sephora is beginning doors where we are sold today, for a small color brand with to nip at its heels,” comments little support there is a short life expectancy in the market,” one beauty executive. Watch she explains. this space. n

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On the up and up BW Confidentialreports on what was seen and heard at luxury packaging show Luxe Pack Monaco Show review he 2014 edition of Luxe Pack Monaco was described as one of the best ever by Luxe Pack Monaco Texhibitors and visitors. The show enjoyed a strong turnout, with visitor numbers Took place: October 27-29 up 15% over last year to 8,525. More than 400 companies exhibited at the show. In Exhibitors: more than 400 addition to luxury packaging companies, this year’s event also hosted what it calls “a Visitors: 8,525, +15% vs 2013 show within a show” devoted to formulation and full service. Around 20 companies exhibited in this area. Exhibitors said the new formulation area got off to a slow start, with few visitors taking a tour of the new section. However, the vibrant show floor contrasted with many packagers’ gloomy outlook on the market. The consensus is still that the market remains tough and is likely to continue to be difficult next year. Mature markets such as Europe are flat at best, while emerging countries—the industry’s growth engine over the past few years—have slowed considerably. Suppliers add that brands are still not willing to take risks with major innovations and are investing more in flankers or new ways of decorating existing products rather than in completely new projects. As usual, the event was used as a platform to unveil a range of new products and techniques (see below). New decoration techniques for glass, as well as ‘smart products’, were a major trend at the show. Anticipating the future, the show featured a special 3D Print corner, which hosted 3D printing machines and explained the potential of this new technology and its applications in the field of packaging. Next year’s Luxe Pack Monaco show will take place from October 21-23.

Seen in show Aptar Beauty + Home officially launched its make-up packaging and formulation activity at the show. Aptar’s initial focus is on complexion products, and it presented a line of foundations in a make-up studio setting to highlight the new offer, which matches each formula’s texture with the best adapted pump. A star product in the new make-up range is Serumony Nude Touch, a 10ml airless mini-format foundation for touch-ups on the go. Serumony Nude Touch will launch in the second half of 2015. For its fragrance division, Aptar presented the Blue Collection; a range of bulb atomizer pumps featuring two types of textile decorations, in either mesh or polyester. The mesh pumps allow for the creation of stripes, gingham and denim, while the atomizers covered in polyester can be printed in a variety of patterns, including floral designs.

Glassmaker SGD showed five decoration techniques at the show. Fine Arts uses 3D engraving of ultrafine patterns to recreate lace or jewelry effects (pictured). Whiteboard Lacquering creates a surface on a perfume bottle that can be written on using a felt tip marker and erased, with the idea of leaving a message on the flacon. The Interior n n n

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n n n Pad printing technique allows the bottom interior of a jar to be decorated, while Prism Lacquering is a technique that reacts randomly during application and firing by drawing prisms, which results in each bottle having a specific and unique look (pictured). Finally, flocking applied by hot transfer combines the soft touch of velvet with optical illusions.

German company Awantys unveiled the use of slate for beauty packaging. The slate can be made into thin shapes for logos or motifs or be used to decorate caps, bottles Show review and jars. It comes in a range of natural colors and provides a strong differentiation factor for brands and is an alternative to zamak, according to the company.

Germany-based Geka showcased The Luxe Pack, a collection of lip applicators and mascaras focusing on decoration options and special effects. The collection includes Catwalk Lashes (pictured), which has a large mascara wand with a mix of bristles and discs that provide a volume effect. The mascara’s finishing uses a glitter masterbatch, which represents savings compared with lacquering. Also in the collection is the GentleLips applicator, whose finishing uses a combination of silver silk-screen printing and patented haptic 3D silk-screen printing for a tactile effect on the bottle and cap.

Dupont presented a bracelet prototype made from Surlyn resin that opens to reveal a fragrance dispenser (pictured). The company says that Surlyn is the ideal material for such a project as it is flexible and also shock resistant. The prototype is intended to illustrate the range of different and original uses of Surlyn for cosmetics and fragrance projects. The company also showed Lancôme’s Grandiôse Mascara, whose top featuring a suspended rose uses Dupont’s Surlyn resin.

France-based Cosmogen presented a self-heating tube (pictured). Described as a tube within a tube, it is intended for single use and heats itself to a temperature of 20°C, making the formula inside more fluid and more effective, according to the company. The inner tube is filled with a safe sodium acetate solution, while the outer tube is filled with the product formula. Once the tube is opened, it begins to heat the formula.

French glassmaker Pochet du Courval showcased Eole (pictured), a new technique that allows for the creation of a variety of decorative designs inside a blown glass bottle. “In the past it was only possible to engrave and decorate the bottom of a bottle, but this technology marks the first time that the inside walls of the bottle can be personalized. It opens up a whole new decoration dimension to our clients,” explains Pochet du Courval industrial marketing director Lucie Ray-Lalanne. The technology means that not only can the inside walls of the glass bottle take on different shapes, but it can also be combined with surface decorative techniques, such as engraving. Eole is suited to fragrance and skincare bottles.

Decoration specialist Solev, a division of Pochet du Courval, highlighted its liquid metallization technology through the new Mirages Métalliques collection (pictured) for bottles and caps. This technology, says Solev marketing and creative director Mathieu Pivaudran, can be combined with other processes like pad printing, silk-screening, laser and sublimation to create a more personalized bottle. n

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The Body Shop hits Brazil L’Oréal launches The Body Shop in Brazil with two stores in São Paulo

’Oréal is looking to roll out The Body Shop to Brazil with the opening of its Lfirst two stores in the country this fall. The group opened its first The Body Shop outlet at the Vila Olímpia shopping center in São Paulo in October, which was followed in November by a second 50m2 (538ft2) boutique (pictured) at the Shopping Pátio Higienópolis mall, also in São Paulo. The launch of The Body Shop in the country has been facilitated by L’Oréal’s acquisition of local chain The Emporio Body Store in 2013. The Emporio Body Store was founded in 1997 and has 134 stores in the country selling soaps, creams, essential oils, fragrance and body butters. L’Oréal has just begun selling The Body Shop products at The Emporio Body Store outlets. The new The Body Shop stores will sell the chain’s own brand items as well as The Emporio Body Store products. In addition to opening new stores, L’Oréal is in the process of converting existing The Emporio Body Store outlets to the The Body Shop format. The group indicated that 2015 will be a transition year for converting the stores, and that by the end of 2014, five The Emporio The Body Shop Brazil Body Stores stores will be turned into The Body Shop and 18 new outlets will l Launched: October be opened. l No of stores: 2 The new The Body Shop stores in Brazil are decorated in soft tones and boast l On offer: wooden merchandising units and shelving. They sell a wide range of products The Body Shop products and ranging in price from R$19.90 ($7.90) to R$128 ($50.50). n The Emporio Body Store items

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s L’Oréal is converting existing The Emporio Body stores to The Body Shop and opening new stores

s The Body Shop Brazil will sell a wide range of products, including lines from The Emporio Body store, which L’Oréal acquired in 2013

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