COSMETIC NEWS WEEKLY

No 552 / April 8 2013 www.CosmeticNews.com Russia drives premium fragrance growth

lobal fragrance sales are The growth of luxury shopping malls and INSIDE THIS ISSUE predicted to surpass $45bn in specialised retailers such as Sephora Gfive years, according to a new and Ile de Beauté (the former owns a BUSINESS survey by Global Industry Analysts (see 60% stake in the latter), have made German personal care brands p3 for more details), with Latin America super premium fragrance more fined d39m for price fixing and the Asia Pacific region spearheading accessible to the Russian consumer, page 3 this growth. But it is the Russian market particularly beyond the traditional which holds the most potential for shopping grounds of Moscow and St MARKET TRENDS growth in the still relatively niche super Petersburg. Direct sales too have held China sees growing demand premium sector. their own in the premium fragrance for natural beauty products Russia is now the world’s highest market. page 4 value market for super premium Travel retailer The Nuance Group, fragrances, with growth outpacing mid- for instance, has begun selling its super INTERVIEW range products. According to the premium fragrance offer in airports Kilian Hennessy, Perfumery and Cosmetic Association of frequented by wealthy Russians in founder, By Kilian Russia (PCAR), there was an 8% growth search of sunshine. Fragrance lines page 5 in value terms for the whole of the include Boss The Collection, Dolce & fragrance market in 2011, while super Gabanna’s Velvet Collection and Tom SUPPLIERS premium fragrances have seen Ford’s Private Blend Collection, all of Microbes deemed key to continuous growth, accounting for 45% which have been chosen to attract high treating acne prone skin of the total value of fragrance sales in spending Russian passengers. page 7 the country in 2012, according to The majority of super premium industry analyst, Euromonitor fragrances are still targeted at women RETAIL International. Demand too has grown by but the male market also has potential MUA enters Ecuador with 6% in value terms despite the current for growth. Fragrance represents an beauty retailer Burbujas economic downturn and there has been integral part of the male grooming page 8 a 14% increase in prices for premium market, which is growing in Russia and and super premium fragrances. other BRIC countries. PRODUCT Beauty analysts believe Russians Looking further afield, analysts Clinique pioneers nail colour have always had an elitist sensibility predict sales of super premium scents for sensitive skin sufferers with regard to luxury items (consumers will continue to prosper in markets such page 10 buy high end brands for the name as the Middle East, where the primarily) but with many super premium burgeoning middle class is fuelling SPOTLIGHT fragrance brands the name is not demand in premium but also Russia’s provincial cities pave necessarily the key factor. Service and in emerging regions such as Brazil, the way for industry growth the quality of the perfumery materials where the luxury market in general has page 12 have become more important enjoyed dynamic sales. purchasing considerations. Emma Reinhold

1 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com People

Sir Lindsay Owen-Jones will resign as In her new role, Bornstein will continue CosmeticNews Weekly honourary Chairman of French beauty to lead these areas while also assuming giant L’ O r é a l , effective 26 April. responsibility for brand and store HPCi Media Limited In a statement addressed to the marketing, public relations and creative, Unit 1, Vogans Mill Wharf, 17 Mill Street, London SE1 2BZ, UK company’s current Chief Executive formerly led by Sharon Rothstein. tel: +44 20 7193 1279 Jean-Paul Agon, Owen-Jones, who was Bornstein will report to Alessandro email: [email protected] a former L’Oréal Chairman, said: “I Bogliolo, Chief Operating Officer of Editor believe that a former Chairman must not Sephora Americas. Emma Reinhold indefinitely extend his presence on the Prior to joining Sephora, Bornstein +44 207 193 1909 board of directors. I wish to express to held roles including GM of Urban [email protected] Senior Reporter the entire board, my recognition and Outfitters Direct and VP of Beatrix Hon pride for the confidence that the E-commerce for Nordstrom. +44 207 193 8184 directors have shown in me.” [email protected] Owen-Jones stepped down as CEO BRAND AMBASSADORS

Correspondents: of L’Oréal in 2006 after 21 years in the Argentina Muireann Prendergast position. He then resigned as Chairman L’ O r é a l P a r i s has added Brazilian Australia & New Zealand Sarah de Castro in 2011. supermodel Isabeli Fontana to its Brazil Sueli Ortega Canada Marjo Johne growing roster of ‘spokesmodels’. As the China Keith Crane Christine Dagousset has been Brazilian spokesperson of L’Oréal Paris, France Patricia Mansfield-Devine appointed Global Deputy General Fontana will represent the brand in Germany Annie Kruse India Chitra Gopalak Manager, Fragrance and Beauty at Brazil and throughout Latin America, Italy Corinne Blanché Chanel, effective January 2014. kicking off the partnership with a hair Japan David Kilburn Dagousset, who has been Executive VP care campaign from this month. Russia Eugene Gerden South Africa Bambina Wise of Fragrance and Beauty at Chanel’s US Spain Lola Gavarrón division since 2005, is in line to replace Lauren Andersen has joined US direct UK Imogen Matthews Andrea d’Avack as Global President, selling giant Avon as Global Celebrity US - East Coast Laura Klepacki US - West Coast Kavita Daswani Fragrance and Beauty in 2015. Make-up Artist. In her new role, she will Travel Retail Kevin Rozario act as a global spokesperson for the RETAIL Avon Colour brand and is also USA Sales Manager Suzi Richardson collaborating with the brand on a new Tel: +1 305 461 0861 French luxury department store colour cosmetics line, launching this [email protected] Galeries Lafayette has parted ways summer. Managing Director with Paul Delaoutre, the CEO of its “In a year when we’re launching so Colin Bailey-Wood +44 207 193 6066 department store division. According to many innovative beauty products and [email protected] French financial daily Les Échos, updating the Avon Colour brand, we’re Chairman Delaoutre will be replaced by Nicolas thrilled to partner with Lauren who is a Michael Harrington +44 207 193 1092 Houzé, son of Philippe Houzé, CEO of true authority in the beauty industry,” [email protected] the Galeries Lafayette Group. said Meg Lerner, Vice President of Avon Despite media speculation around North America Marketing. Delaoutre’s sudden departure, he is said www.cosmeticnews.com to have separated with the group “on BRAND PARTNERSHIPS good terms”. Having been involved in Subscriptions tel: +44 207 193 1279 the company since 1998, 38 year old Men’s deodorant brand Suremen email [email protected] Houzé was most recently President of (Unilever) has signed a three year global one year subscription: US$1,585/a1,250/£990 two year subscription: US$2,800/a2,250/£1,780 French jewellery chain Didier Guérin. sponsorship deal with the Lotus Formula 1 Team. In line with the Julie Bornstein has been appointed agreement, the brand is releasing a CosmeticNews Weekly Chief Marketing and Digital Officer at limited edition Suremen Lotus F1 range CosmeticNews Weekly no552 8 April 2013 Sephora Americas. Promoted from her from this month, supported by a £4m

Articles published in this newsletter may only be reproduced with previous role as Senior Vice President at marketing campaign. permission. The publisher accepts no responsibility for any statements made in signed contributions or in those reproduce from Sephora Digital, Bornstein is credited “The range will bring new news to the any other source. ISSN 1953-0633 for doubling the size of Sephora’s online male deodorant category, via an business, driving the retailer’s mobile untapped but key motorsport passion HPCi presence, growing its Beauty Insider point for the Suremen target audience,” media loyalty programme and successfully said Paul O’Connor, Brand Manager for launching sephora.com. Suremen at Unilever UK & Ireland.

2 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Business

Li & Fung profits plummet 42% Recent restructuring costs in the US have hit Hong Kong based Li & Fung. Pharma giant snaps up Obagi The global sourcing company saw its operating profit drop by 42% to $511m S based pharmaceuticals giant Valeant International has acquired all of the in 2012. Despite this, turnover for the outstanding common stock of Obagi Medical Products, Inc. for $19.75 per year saw a marginal improvement, Ushare in cash. The figure represented a 28% premium on Obagi’s closing climbing 1% higher than the prior year to share price prior to the acquisition announcement, with the transaction expected $20.22bn. In the US, the company to close in the first half of 2013. markets products for retailers including “The acquisition of Obagi will be a valuable supplement to Valeant’s current Walgreens, Kohl’s and Macy’s. It is also dermatology portfolio and will further build upon our growing aesthetics the owner of personal care company franchise,” said J Michael Pearson, Chairman and CEO of Valeant. Lornamead, which manages a portfolio Having achieved a total revenue of $120m last year, US based Obagi specialises of US, German and UK personal care in topical aesthetic and therapeutic skin health systems. Its product portfolio brands such as Yardley and Lypsyl. includes Obagi Nu-Derm, Condition & Enhance and Obagi-C Rx. Valeant’s Commenting on profit loss, Bruce consumer products portfolio, meanwhile, features brands including Canada’s Dr. Rockowitz, Group President and CEO of Renaud, US skin care brand Dr. LeWinn’s and Australian brand DermaVeen. Li & Fung Limited, said: “We recognised that our biggest management challenge was the restructuring of LF USA, which u39m fine imposed on German became more costly than originally envisioned. We took swift, decisive action to address the issue and also manufacturers for price fixing introduced strict cost control measures erman anti-trust authority Bundeskartellamt has fined six German personal across the group.” care and household products manufacturers, and an industry association a He added that the global economic Gtotal of u39m for sharing information about product pricing. The environment in 2012 had been “more companies fined include Beiersdorf, GlaxoSmithKline Consumer Healthcare, demanding than expected” with the L’Oréal Germany, Procter & Gamble (P&G) Germany, Gillette Germany and shoe company’s retail business heavily cream manufacturer Erdal-Rex, as well as industry association Markenverband e.V.. impacted by declining consumer The current round of fines is the last stage in a drawn out anti-trust suit. sentiment in the US and Europe. Beiersdorf has already settled; L’Oréal and P&G, however, have announced that they will file protests against the ruling. Mac tops brand equity poll In 2006 whistle blower Colgate-Palmolive informed Bundeskartellamt that New figures from the 2013 Harris Poll virtually all large personal care and household products manufacturers active in EquiTrend (EQ) study show luxury the German market were regularly meeting under the auspices of Markenverband. beauty brands and retailers have gained During these work groups the companies traded information about pricing ground in brand equity over the past strategies, fixed retail prices and discussed how to deal with retail chains and year in the US. More than 1,500 brands distributors. The first group of participants were fined between 2008-2011, were involved in the study and assessed including Henkel and Coty Germany who had to pay u24m. on three key factors: familiarity, quality Annie Kruse, Berlin and purchase consideration. “There’s been a lot of discussion in the media as to whether 2013 will bring French ‘age better’ than British than British women, with 33% starting at about another recession, so it’s According to a recent survey by online 15 years of age and nearly two thirds interesting to see equity is on the rise UK beauty retailer Escentual.com, starting by the age of 20. By for luxury brands,” said Aron Galonsky, French women look seven years younger comparison, British women were found SVP, Brand and Communication than their British counterparts by the to start their skin care routines around Consulting at Harris Interactive. time they reach 40. The majority of the age of 25, with just half adopting a Within the health and beauty respondents (89%) participating in the consistent regime. category, Neutrogena topped the mass survey, which included Escentual’s market category while Mac Cosmetics British customers, agreed that the secret Global fragrance market value ranked highest for prestige make-up. In to the youthful appearance of French to surpass $45bn by 2018 the retail category, Saks was named top women lies in their anti-ageing skin care The global fragrance market will reach luxury department store while regime. Escentual also found that $45.6bn by 2018, says Global Industry Amazon.com was ranked top e-tailer for French women start using skin creams Analysts (GIA) in its Fragrances and the year. and serums at least five years earlier Perfumes: A Global Strategic Business Report.

3 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Business

expected growth in the male fragrances arena, product innovations and the ASIA FOCUS growing popularity of celebrity scents, said GIA. China’s naturals market Nevertheless, the company expects the developing regions of Asia Pacific and Latin America to be the single tipped to grow further largest factor boosting the market in the onsumer attitudes in China are reflecting a growing market demand for coming years. “Though the fragrances natural products. According to new research from Mintel, 90% of urban and perfumes market is relatively new in Cfemale consumers in China buy products containing natural ingredients. the Asia Pacific region, it has developed This statistic rises to 92% for those aged 30-39 and 94% for those in the highest into one of the mainstream regions for income bracket. growth, backed by increasing consumer The research also found that product safety is an increasing concern for interest in cosmetics,” said the report. Chinese consumers, with 90% of female shoppers saying they are “getting more Meanwhile, Latin America also concerned about the safety of skin care products”. Mintel estimates the facial extends immense opportunities, said skin care segment to be worth RMB65bn ($10.46bn) in 2012, up from RMB36bn GIA, because fragrances represent an ($5.8bn) in 2007. Furthermore, Mintel forecasts the market to grow even further integral part of the grooming scene in over the next five years to 2017 to reach RMB104bn ($16.74bn). the region and steady economic growth “Plant based cosmetic products that enhance the appearance of the skin are means that Latin American consumers increasingly in demand and organic and natural herbal based skin care products are now trading up from cheaper are becoming increasingly popular nowadays among Chinese consumers thanks to fragrances to premium brands. the international skin care trend and ongoing ingredient scare cases in China,” said Jane Henderson, Global President, Beauty & Personal Care Division at Mintel. L’Oréal rapped in Sweden for misleading online ads Cosmetics giant L’Oréal has been fined Kanebo tests pharma route by the Swedish authorities for continuing to run adverts on its website n increasing number of Japanese cosmetics now offer specific benefits that were ruled in 2010 to be that would normally be associated with pharmaceutical products. Many misleading. The ads for Vichy LiftActiv Acontain ingredients to ward off spots, pimples, freckles and other CxP, Vichy LiftActiv Retinol HA, L’Oréal blemishes. Generically, these go by the name of ‘cosmeceuticals’. Revitalift, L’Oréal Age Perfect and The latest launch from Kanebo is URURI Brightening Essence Cream V, a Garnier Ultra Lift, have landed the moisturising and brightening face cream that both provides and retains moisture company a fine of a million kroner as it helps to inhibit the generation of spots and freckles. It is formulated with ($155,000) and the costs of the Swedish vitamin C, hyaluronic acid and collagen, and can be used as a cream, beauty Consumer Ombudsman’s office, which essence and moisture mask. brought the action. At the same time, Kanebo also introduced Skin Treatment Gel, a moisturising The ads were banned by the Swedish gel that helps to prevent rough skin and acne, and is formulated with Market Court in 2010 after the nicotinamide, coix seed extract and peach leaf extract. Ombudsman said they made claims URURI was first launched in March 2011 as a moderately priced self selection about reducing wrinkles and skin care brand sold only in Japan. All products combine three different functions regenerating skin that had no adequate and are formulated with three key ingredients. URURI comprises four different scientific basis. lines: Moisturising, Brightening, Medicated and Firmness & Glow. URURI is sold in One of the creams was claimed to Japan through drugstores, general merchandising stores and other outlets. reduce wrinkles at “laser speed”, making David Kilburn, Tokyo them between 43%-70% less visible, depending on the advertisement in question, and another was claimed to Regionally, the global fragrances and increasing average age of the population reduce wrinkles by rebuilding the skin. perfumes market is highly polarised and (older people use less and “The verdict is a great success and a fragmented as a result of the extremely fragrance) have brought down the pace guide for all companies that market beauty faddish fashion trends dictating the of growth. Growth in developed and creams,”commented Agneta Broberg, market’s fortunes, said the report. maturing markets will still be boosted by Sweden’s Deputy Consumer Ombudsman. Although the developed regions the feel-good factor associated with “It has now become clearer what one continue to be the major players, the fragrances and perfumes, increasing cannot claim either in writing or through limited growth in population and the demand from young people, the images in advertising.”

4 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Business

She added: “In Sweden, L’Oréal will now no longer be able to advertise any INTERVIEW product that in any way claims to reduce wrinkles or to have anti-ageing effects or Kilian Hennessy, founder, By Kilian use[s] pictures that mislead customers about the effects of the product.” Pushing creative boundaries Walgreens posts healthy Q2 espite growing up in the luxury products business, Kilian Hennessy has US drugstore giant Walgreens has posted managed to carve his own path in the industry with his By Kilian perfume healthy second quarter earnings, with Dbrand, founded in 2007. And the industry is taking notice – the heir to the net earnings totalling $756m compared Hennessy cognac fortune picked up his first FiFi award earlier this year for his with $683m in the prior year quarter. The Amber Oud scent. positive result was spurred on by its acquisition of UK health and beauty What does winning a FiFi mean to you? retailer Alliance Boots in June last year. If only you knew the amount of hours we spend creating a single scent – it can According to Walgreens, the company is take up to a year. So it made me extremely happy – it is recognition from the still on track to achieve its first year industry for a job well done. Nothing would have been possible without Calice target of $100-$150m in combined Becker. She is just amazing and absolutely one of the best I know. synergies with Boots. “We are pleased with the quarter’s What opportunities do you see for your brand this year? results as we saw substantial strength in 2013 has started off very strong for us and we are already 115% up on last year. our pharmacy performance, leading to We are in the second phase of launching our new collection, In the Garden of strong earnings growth,” said Walgreens Good & Evil. Our priority now is to increase sales through our existing 187 doors. President and CEO Greg Wasson. Net earnings for the first half of 2013 Are your lighter fragrances designed to appeal to the Far East? however, came to $1.17bn, falling No. We only have one point of sale in Asia, which is Harvey Nichols in Hong Kong. slightly from $1.24bn in 2012. Q2 sales The ambition behind these scents was to offer a collection that would be more also remained flat compared with the ‘spiritual’ as creations conceived as moments of meditation. In a way, the exact prior year quarter at $18.65bn, while opposite side of the olfactive spectrum from our Arabian Nights collection. first half sales decreased 2.3% to $35.96bn. Despite this, the company What is your presence in the BRIC countries? has continued to expand and now has We are strongly present in Russia (10 doors) and not at all in the other markets. 8,072 drugstores in the US – 231 more than 2012. What is your marketing strategy? I hate the word ‘marketing’! It refers to the study of the market and we don’t do Colgate-Palmolive India to sell any studies. First, we don’t have the budget and, more importantly, I believe that US division to holding company our job is to surprise our fans by creating products they would never imagine Personal care giant Colgate-Palmolive possible. India is looking to sell its US based division Colgate Palmolive Co., to a unit Are you interested in limited editions? of its holding company. According to The We will never do a limited edition scent, nor withdraw any from the line, as I would Wall Street Journal, the transaction will be not want a customer to fall in love with a perfume and then not be able to effective on 1 June for a total of repurchase it. INR598.9m ($11.1m). Under the terms of the transaction, Have you been affected by IFRA restrictions on raw materials? the division will be sold to Colgate Unfortunately yes. What the IFRA is doing is simply suicide. I am very surprised Global Business Services Pvt. Ltd., a that the big groups are allowing this organisation to destroy their existing wholly owned subsidiary of holding masterpieces and quash the creativity of our perfumers without any protest. company Colgate Palmolive Company USA in a “slump sale”. This means the How do you balance growth with staying true to your roots? transaction will involve a lump sum and We make no concessions to the quality of the environment where we choose to include the transfer of all employees, display our creations – space and allocation are everything. The department store assets and liabilities without individual environment is usually the optimum route but we opened our first store in values being assigned to each. Moscow in November 2012 and are planning the second in New York this autumn. The company has yet to comment Patricia Mansfield-Devine, Rennes on its reasons for the sale.

5 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Suppliers

PACKAGING local authorities are working,” said Dr group that is so demanding and linked John Morris, Chief Executive of BAMA. to new trends,” said Célia Anrelink, BAMA celebrates success of L’acqua di Fiori Product Manager. aerosol recycling campaign DuPont finds its sweet tooth The red cherry inspired cap is made A recent survey carried out for the Global packaging company DuPont has from DuPont’s Surlyn. The resin was said British Aerosol Manufacturers’ used its Surlyn resin to create a to be ideal for creating rounded caps Association (BAMA) has revealed that gourmand themed flacon for L’acqua di and captured the “brightness, charm, almost three quarters of UK consumers Fiori’s latest fragrance. toughness and safety requirements" of who buy aerosols are recycling them. Inspired by the popularity of the brand, according to DuPont. The GFK NOP survey found that nearly cupcakes, the Brazilian beauty brand 70% of the population buy or use recently launched its Cupcake Me M&H Plastics shows off curves aerosols and, of those who do buy fragrance line in a bid to appeal to UK packaging manufacturer M&H them, 73% are recycling. ‘tweens’ aged 8-12. It is available via Plastics has added a PET bottle to its Just 7% of local authorities recycled L’acqua di Fiori stores in Brazil and portfolio of standard packaging aerosols 18 years ago. Today, over 87% features two scents: Napolitano Chic products. accept empty aerosols for recycling. and Caramelo Divertido. The new 25ml bottle features a screw-on The survey revealed the 35-54 age The scent is housed in a standard cap and bears a curved shape. It is also group to be the most enthusiastic glass bottle decorated with two EVA manufactured in PET for improved product recyclers and found that personal care layers and topped off with a red cherry clarity. aerosols (the largest sector of the shaped perfume cap. According to the company, the industry) were the most recycled “During the packing planning of the bottle’s gently curved shape makes it aerosols. new line, the main L’acqua di Fiori suitable for a wide range of market “It is very rewarding to see that our concern was maintaining the toughness sectors. Meanwhile, the 25ml size makes efforts, by creating campaigns, via and safety, without losing the product’s it ideal for samples, travel or hotel retailers, the media, consumers and charm and attractiveness for this age amenities packs.

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6 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Suppliers

INGREDIENTS

Natural Sourcing adds argan Specialty ingredients company Natural New skin care ingredient Sourcing has grown its line of personal care ingredients with cold pressed trend bubbles up in Korea organic and conventional argan oils. ubbles have become a popular ingredient in new facial cleansers launched Originating from Morocco, the oil has a in South Korea this spring. The micro-bubbles both stimulate and refresh shelf life of one-two years and is pressed Bthe skin while helping to remove skin debris, oil, grease and make-up. from the fruits of the argan tree. For example, Hankook Cosmetics’ 360 Tansan Whip Cleanser is one of the Known to nourish, moisturise and newest facial cleansers on the market to incorporate a sparkling mineral water and improve skin elasticity, argan oil is high claims the long lasting bubbles remain on the skin for six hours after application. in omega-9 oleic acid and omega-6 Part of the product’s appeal is that it includes fewer ingredients overall and no linoleic acid. Its high polyphenol content surfactants, compared with many other products. makes it an effective antioxidant and Songhak Cosmetics’ Oseque Melting Cleanser is another new product that has adds to its stable shelf life, according to a base of sparkling mineral water plus alkaline ionic water. It comes as a gel-type Natural Sourcing. facial cleanser that foams into bubbles when dabbed on the face. This too does not contain surfactants, colouring or preservative agents. BMSystems enters R&D project There are signs of a similar trend in Japan where Rohto Pharmaceutical has Bio-Modeling Systems (BMSystems), a released a cool white tea facial cleansing foam mousse, which uses carbon dioxide French developer of biological in silico as a propellant to create a dense, elastic, long lasting foam that both cleanses the models validated in vivo, has announced skin and improves blood circulation. a joint systems biology research and development initiative with Indian software specialist Persistent Systems. Microbes found to clear skin The company aims to develop a predictive computer simulated skin esearchers at the David Geffen School of Medicine at UCLA have found model that will help eliminate the use of that adding certain types of microbes to skin cream might be helpful in the animals in contact allergy testing in the Rtreatment of acne. They found that the microbes that cause the most pharmaceutical and cosmetics common forms of acne come in two types: the type that cause pimples and a industries. The announcement follows beneficial type that help keep the skin healthy. the European Union’s ban on the import “We hope to apply our findings to develop new strategies that stop blemishes and sale of cosmetics containing before they start,” said lead researcher Huiying Li, adding that the findings would ingredients tested on animals in March. allow dermatologists to personalise acne treatment based on “each patient’s Bio-Modeling Systems will combine unique cocktail of skin bacteria”. its CADI modelling platform with Li and colleagues used pore cleansing strips to collect the acne bacteria Persistent’s new Cell-in-Silico software Propionibacterium acnes from the noses of about 100 volunteers, half of whom had to provide the first holistic systems acne and half of whom had clear skin. They then sequenced the genomes of 66 based drug discovery solutions, strains of P. acnes. according to the company. Two unique strains of P. acnes appeared in one out of five volunteers with acne, but rarely in clear-skinned people. Surprisingly, a third strain commonly showed up Mitsui partners with Solazyme in volunteers with healthy skin but only rarely in those with pimples. “We suspect One of Japan’s leading trading that this strain contains a natural defence mechanism that enables it to recognise companies, Mitsui has begun a major attackers and destroy them before they infect the bacterial cell,” said Li. project to synthesise high quality Patricia Mansfield-Devine, Rennes vegetable oils from algae, working with Solazyme, an American bio-venture that has developed technology to successful, Mitsui would gain exclusive to increase production. Mitsui believes commercially produce oils and fuels worldwide rights, excluding Brazil, to the the algae based production method will from algae. Mitsui’s interest is in high oils. Once the production technology be more cost effective than present quality oils that can be used in luxury has been proven, Mitsui intends to approaches to increase yields and soaps and cosmetics. outsource production and sell the quality. The company estimates the Mitsui will be paying Solazyme output to manufacturers worldwide. market size for the oils of the kind it ¥1.8bn over four years to develop oils Because sources of many high- wishes to develop is about ¥200bn and technologies to Mitsui’s performance vegetable oils, like palm oil, annually and hopes to gain a 10% specifications. If the project is grow only in southeast Asia, it is difficult market share.

7 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Retail

Acquisitions pay off for Dufry Reflecting the continued resilience of MUA to make bricks and the global travel retail market, Swiss travel retailer Dufry has posted strong results for 2012. The company’s mortar move with Burbujas turnover for the year grew by 19.6% to K budget beauty brand MUA is looking to ramp up growth via emerging CHF3.15bn while EBITDA increased by markets, opening its first store in Ecuador this summer. In line with a 27.8% to CHF474m. Ufranchise agreement with Latin American beauty retailer Burbujas, MUA’s The solid results were driven by first shop will be situated in Mall del Sol in the Guayaquil area of Ecuador. Dufry’s recent acquisition activity, which The new MUA shop will be just 20sqm in size and will feature over 5,000 of the includes several travel retail operations brand’s beauty products. Commenting on the new store opening, Adam Minto, in South America, as well as a 51% stake MUA’s CEO, said: “This is a key milestone in our international expansion and in a Russian travel retailer in January demonstrates the international appeal of our brand. We are delighted to be 2012. In November last year, Dufry also working with Antonio and his team at Burbujas. What better way to celebrate inked an agreement with Guarulhos MUA’s third birthday than with the launch of our very own shop within a shop in International Airport in São Paulo for the one of the key emerging markets – Ecuador, the gateway to South America.” extension of its agreement until 2016 Antonio Alvarez Eljuri, Burbujas CEO added: “We are very proud to be and the expansion of retail space in the launching MUA’s first shop within a shop in Ecuador. Customers will be offered a airport by almost 50%. wide variety of good quality products at accessible prices and most of all “The medium and long-term trends differentiated service.” in the travel retail industry, namely the ongoing global passenger growth, as well as the continuation of the consolidation Walgreens scales new heights of the travel retail industry have been confirmed and will remain valid,” said S drugstore giant Walgreens has opened a new flagship store in New York’s Julian Diaz, CEO of Dufry Group. “We will iconic Empire State Building. The store, which will be open 24 hours a day, is continue to focus on growing organically Usaid to feature “innovative offerings, [and] products and services unexpected in our current operations through space from a drugstore,” according to the retailer. expansion and accelerating like for like “We are extremely pleased to provide another revolutionary store that growth.” demonstrates how Walgreens is transforming daily living, pharmacy and healthcare experiences nationwide,” said Mark Wagner, Walgreens President of operations and Sephora steps up techno community management. “Walgreens’ innovative products and services support our beauty offering with Tria commitment to help our customers get, stay and live well.” In line with a growing focus on beauty In addition to a café and expanded pharmacy, the new store will feature a LOOK devices, French beauty retailer Sephora Boutique beauty department housing both prestige and niche cosmetic, skin care has begun an online roll out of the latest and hair care brands. The area will reinforce Walgreens’ focus on service, with beauty innovations from US beauty device advisors on hand to help customers, along with shaping and grooming services maker Tria Beauty. Sephora will be available at the newly opened Eyebrow Bar. previewing Tria’s new Hair Removal Laser Walgreens, which posted sales of $72bn in 2012, is the largest drugstore chain and Skin Perfecting Blue Light in the US. The company now operates over 8,000 drugstores in the US and Puerto Rico, addition to its topical skin care products and last year entered into a $6.7bn deal in exchange for a 45% stake in UK health on Sephora.com. It was also one of the and beauty retailer, manufacturer and wholesaler Alliance Boots. first retailers to release Tria’s new Hair Removal Laser 4X and SmoothStart Calming Gel, which launched in selected Rapid expansion drives Ulta Q4 achieved during the year: we increased US stores in March. Net sales for US beauty chain Ulta’s square footage by 23% with the addition “Sephora is a tastemaker in the fourth quarter climbed 30.3% to of 101 net new stores, we greatly beauty industry and has a legacy of $758.8m from $582.5m in the prior year enhanced our offering with newness developing brands that become ‘beauty period. Comparable store sales also across the board and improved our must haves’ for consumers. A increased, jumping 8%, while net income digital capabilities including rapid partnership between our two companies climbed 39.4% to $64.5m. growth in our e-commerce business.” is a natural fit, given Tria’s proven track Commenting on the results, Dennis Looking ahead, the company expects record in providing consumers with Eck, Interim CEO, said: “Excellent to achieve net sales of around $568m products that raise the bar in results, execution of our multi-year growth for the first quarter of 2013, driven technology and design,” said Tim Bunch, strategy was evident in the milestones largely by its continued expansion plans. VP and GM, Tria Beauty Inc.

8 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Products

Rihanna bares all for new scent Just over two years since the release of her debut scent, Reb’l Fleur, Barbados Elemis moves into make-up born pop star has launched her third fragrance, Nude by Rihanna. K spa and skin care brand Elemis is taking its first steps into the make-up Composed by Harry Frémont of category from May with the launch of its Pro-Radiance Illuminating Flash , the floral oriental opens on UBalm. Described as a “new generation hybrid moisturiser”, the formula is guava nectar, mandarin and pear, before said to deliver the right amount of sheen to give the skin a healthy glow. moving into heart notes of orange It contains key actives including purple orchid for its moisturising benefits, blossom, gardenia petals and velvet noni extract for its radiance boosting properties and silk mica, which helps to jasmine sambac. Finally, the gourmand soften skin imperfections with its light scattering qualities. base reveals sandwalwood, musk and According to Elemis, the balm can be used in place of moisturiser or as a vanilla orchid. primer under foundation. It will be priced at £32 and available from selected UK “Rihanna is one of the world’s most department stores including John Lewis, Debenhams and Harvey Nichols. talented artists. She is a captivating Beatrix Hon, London young woman who knows what she wants and perfectly balances strength and femininity. Her third fragrance, Nude Cerruti adapts 1881 franchise by Rihanna, was formulated to capture Rihanna’s distinct brand of sensuality,” said Fred Purches, Chairman and CEO of with modern Parlux, which holds the Rihanna n 25 March, Italian perfume house Cerruti (Coty) launched its latest fragrance licence. fragrance, 1881 Acqua Forte, which it called a modern “reinterpretation of Mirroring the shape of a stiletto heel, Oeau de cologne”. the flacon is decorated with a twisting Created by Olivier Cresp of Firmenich, it features unusual ingredients nude ribbon. The fragrance is available such as cardamom, basil, cascalone, yuzu, palisander wood and cashmere wood. from selected department stores priced “The first idea was to dare to try a formula that was simple and minimalist to from £20/30ml. better evoke a particular Mediterranean freshness,” said Cresp. “For that, we had to choose authentic elements, that were powerful and of good quality. Acqua Pharmaclay steps into the UK Forte is really a perfume of contrasts: the initial fresh notes are counterbalanced Spain based Pharmaclay Delivery by sensual base accords. At the same time, the classic ingredients are modernised System, S.L. has released a new line of with original twists such as cascalone and yuzu.” clay masks in aerosol form. Named The face for the publicity campaign for the fragrance is 39 year old French jazz Clayspray, the range contains 60% clay guitarist Thomas Dutronc, famous for his hit song J’Aime plus Paris. The green juice combined with natural mineral water, comes in a six-sided bottle topped off with a steel cap, intended to resemble a and will be available in six varieties block of ice. including three pure white clay masks Cerruti 1881 Acqua Forte is now available from selected perfumeries in France and three red clay masks. at a price of u50 for a 75ml edt and u70 for the 125ml size. Clayspray’s clays are enriched with Cerruti was founded in Italy in 1881 by the Cerruti family as a textile mill that macromolecular hydrogels, which are manufactured luxury textiles. In 1957, the brand launched its first luxury ready-to- said to retain up to 800 times their wear collection. The company made its first foray into fragrance in 1978 with Nino weight in water. They act as a carrier to Cerruti for Men, followed by Nino Cerruti for Women around ten years later. The enhance the firming and strengthening fragrance licence is currently held by Coty, which acquired it in 2005. Cerruti effects of the clay while conserving the fragrances are still produced under the Cerruti and Cerruti 1881 brands. properties and moisture of the product Patricia Mansfield-Devine, Rennes for months longer than traditional clay masks, which are prone to oxidisation. According to Pharmaclay, the spray Börlind bumps up anti-ageing irritation; and extract of gromwell root, format also helps to enhance the clay’s German beauty brand Anne-Marie which protects against premature skin own action and beneficial properties. Börlind has released two new anti-ageing ageing, according to the company. The clay is extracted from the Iberian duo-phase treatments based on The second treatment, Energie peninsula and contains mineral rich macadamia and jojoba oils. Double à la Fleur d’Oranger, contains deposits. Clayspray will be available The first treatment, Soin Vital à la macadamia oil, maceration of carrot, online priced at £14 each. It will also Rose, contains rosewater made from blood orange extract to protect the skin, extend into premium retailers in the UK wild roses from the Kernan mountains in along with a vitamin complex of B5, C in the coming months. Iran; 100% vegetal bisabolol, to calm and E. Both products cost u18.20/50ml.

9 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Products

Acqua di Parma in bloom Acqua di Parma (LVMH) has launched a new fragrance collection for women, Clinique nails colour for said to contain the “rare, noble and precious ingredients” found in Italian sensitive skin market gardens. linique has launched a new nail polish collection designed especially for The new line of eau de toilettes build those with sensitive skin. The collection, A Different Nail Enamel for Sensitive on the brand’s existing fragrances; Iris, CSkins, took Clinique six years to research and develop, according to the Magnolia and Gelsomino. Acqua Nobili brand, and is formulated to minimise skin sensitivity and lessen eye irritation from Iris opens on violet, neroli and green touching or rubbing the eye area after a fresh manicure. It is also dermatologist notes, with iris pallida and orange tested, ophthalmologist tested and appropriate for sensitive skins and sensitive eyes. blossom in the heart and soft musk with The new formula comes in 12 shades including some of Clinique’s pre-existing vanilla at the base. hues, as well as nine other limited edition shades for summer 2013; there is also a Acqua Nobili Magnolia, meanwhile, new base and top coat to complement the range. combines mandarin, cedar and lemon, The polishes retail for £12 and will be available exclusively online at while Acqua Nobili Gelsomino combines www.clinique.co.uk from 25 April and in Debenhams from May. notes of bergamot, lemon and mandarin with a heart of fresh florals. The fragrances are priced at u118 each. Byredo goes back to nature Lola Gavarrón, Madrid Institut Esthederm chases sun with latest fine fragrance French skin care company Institut iche Swedish perfume brand Byredo is launching a new fine fragrance named Esthederm has added to its skin care Inflorescence. Designed, says the company, to “celebrate the awakening of line up with the new Intolerance Nnature and the beginning of spring”, it is based on strong floral accords, with Treatment Face Cream and Into Repair head notes of rose and freesia, heart notes of muguet and magnolia and a base Sun Intolerance. of jasmine. Specifically designed for sensitive The fragrance was created by the company’s founder, Ben Gorham. The scent skin or sun-sensitive skin, the new was launched last month at selected retailers worldwide and from the company’s formulations are fragrance-free and website, www.byredo.com at a price of u140 for 100ml. feature high levels of desensitising Byredo (which stands for By Redolence) was founded by Gorham in 2006 and its actives, which improve product product line includes fine fragrance, fragrance, body care products and tolerance. As well as protecting the skin accessories. All of its products are manufactured in Sweden and it currently sells into against all types of sunlight, Into Repair 45 countries. Sun Intolerance also works as an anti- Gorham, of mixed Canadian and Indian heritage, is a former professional wrinkle cream, according to the brand. basketball player and was born in Sweden. He did not train as a perfumer but later Both Intolerance Treatment Face became interested in fragrance after a chance encounter with Swedish perfumer Cream and Into Repair Sun Intolerance Pierre Wulff. He usually collaborates on Byredo’s fragrances in the role of ‘perfume will be priced u45 and u64 respectively. creator’, with celebrated perfumers Olivia Giacobetti and Jérôme Epinette translating his ideas into compositions. Chantecaille irons out skin care Patricia Mansfield-Devine, Rennes Luxury beauty brand Chantecaille is adding a new Bamboo and Hibiscus Exfoliating Cream to its skin care YSL taps into eau legère trend orange flower; heart notes of May rose, offering. Described as a “dual action skin To celebrate the 30th birthday of its peony, ‘clochette verte’ and lily of the smoother”, the exfoliant contains powerhouse fragrance Paris, Yves St valley; and base notes of sandalwood bamboo spheres, which work to gently Laurent Beauté (L’Oréal) is launching a and white musk. polish and exfoliate the skin while plant new eau legère version of its 2003 flanker The original Paris Première Roses was enzymes help to brighten the Paris Première Roses. It will be available released for the 20th anniversary of Paris complexion. as a limited edition for u75/125ml. in 2003 and this is the third eau legère The formula also contains a Created by perfumer Sophia version. combination of acids such as hibiscus Grojsman, who also created the original There have now been 14 versions of flower acid and glycolic acid, which both Paris scent in 1983 and has since worked Paris altogether, many in limited edition, work to further the cream’s exfoliating on some of the flankers, this version has including Paris Rose des Verges and Paris effect. Priced at £73, the Exfoliating head notes of eglantine, violet and Rose des Bois. Cream launches in April.

10 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com New media & marketing

TOP TWEETS ON THE STREET Nars makes directorial debut We track the latest beauty hiseido owned beauty brand Nars Cosmetics has released a new Satin Lip news in 140 characters Pencil collection, which includes 13 shades ranging from light apricot to Sshocking pink. The formula is said to include pomegranate fruit extract, Beautyanthedirt along with a complex of phospholipids, yeast extract, collagen prepeptides, Prada’s new fragrance, Prada Candy hyaluronic acid and vitamin E to moisturise, soothe and deliver the appearance of L’eau launches with a Wes Anderson & fuller looking lips, according to the brand. Roman Coppola-directed mini-film Similar to Nars’ Velvet Matte and Velvet Gloss lip colours, the Satin Lip Pencil http://bit.ly/101EWZv combines the finish of a conventional lipstick with a crayon design for more convenient application. MarketingWeekEd To promote the new line, the brand has launched an interactive digital short Amazon and Facebook fuel film, which is designed to help customers find their ideal shade. The video smartphone speculation with ‘secret features musician Sarah Ruba and fashion stylist Catherine Baba modelling the projects’ http://bit.ly/Xawkjd various shades in the range, which are priced at £17.50 each. Viewers can click through the film to watch Ruba and Baba model the entire line of lip colours to BBCBreaking matching music and outfits. The film is now live via the Nars website. Unemployment in eurozone hits record high of 12%, says statistics agency Eurostat http://bbc.in/17aw1sI Honest downloads baby app LuxurySociety he Honest Company, a new lifestyle and beauty brand co-founded by Will Google Glass make smartphones Hollywood actress Jessica Alba, has released a new app named HonestBaby. history? http://ow.ly/jz1SQ TAvailable to download from the App Store on iPhone, iPad and iPod touch, the app is said to enable parents to monitor their child’s development and uk_music_news growth. In addition to a comprehensive line up of bath and body products, The Adele in conflict over offers to Honest Company also offers a popular baby care line, which includes items such endorse beauty brands: Star close to as healing balm and travel wipes. The company offers a monthly subscription signing a deal tinyurl.com/arwgz6q service that enables customers to sign up for ‘family essential bundles’ including a selection of products ranging from body oil and shampoo to laundry detergent, WarcEditors from $35.95 per month. Warc News: L’Oréal serves unique HonestBaby will allow users to track feedings, diaper changes, sleep, growth tastes in China; rejects “one size fits and doctor visits. Meanwhile, members of the company’s subscription service will all” approach http://bit.ly/11azPHE also be able to use the app to manage their accounts, subscriptions and order products directly from their devices. Unilever Unilever signs strategic research agreement with University of ‘Smellovision’ becomes reality Nottingham http://bit.ly/YTPqqn research team at Japan’s Tokai University has developed a new display HarvardBiz system that combines sights, smells and air currents for an enhanced How P&G and Samsung encourage Aexperience while viewing the screen. new thinking http://s.hbr.org/ZJhJeH Tentatively called ‘Smellovision’, the system, now at a prototype stage, could represent an innovative new way to market products and could have applications WalpoleUK such as digital displays, signboards and advertising, or any environment where it Chairman of @LVMH Bernard Arnault could be useful to blow fragrances toward viewers to give them the sensation of as Knight Commander of the Most smelling what they see. The developers also envisage their system enhancing Excellent Order of the British Empire cinematic experiences by wafting odours that relate to events on screen. The display consists of an array of LEDs spaced 2.5mm apart. The spaces PageSix between the LEDs are taken up by holes through which fragrance capsules are Cate Blanchett seals $10 million blown out toward the viewer using air blowers behind the screen. Although the Armani fragrance deal fragrance capsules quickly vaporise, the molecules move as a group pushed http://nyp.st/Zr70BW towards the viewers.

11 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com Looking ahead

10-12 APRIL 6 JUNE CHINA INTERNATIONAL COSMETICS BUSINESS SPOTLIGHT EXHIBITION: SURFACTANTS INNOVATION AWARDS & DETERGENTS Venue: The London Venue: Shanghai Convention Film Museum Rethinking Russia: a new era & Exhibition Centre Email: [email protected] eading global cosmetics producers are considering Email: yihanexpo@ www.cosmeticsbusiness.com revising their strategy for development in the Russian vip.sina.com L cosmetics market over the next several years, amid the www.iesdexpo.com 8-10 JUNE rapid growth of cosmetics sales in the country’s vast province BEYOND COLOR as well as their stagnation in Moscow and St Petersburg, 11-13 APRIL Venue: Porte de Versailles, Paris Russia’s largest cities, which so far account for up to 70% of COSMOBEAUTÉ VIETNAM www.beyondcolorexpo.com total sales in the country. Venue: Saigon Exhibition & According to DISCOVERY Research Group, Russia’s leading Convention Centre (SECC), 13-15 JUNE analyst agency in the field of cosmetics, over the past few Ho Chi Minh City BEAUTY EURASIA years, cosmetics sales growth in the markets of Moscow and www.cosmobeauteasia.com Venue: Tuyap Centre, Istanbul St Petersburg have significantly slowed down and currently do www.beautyeurasia.com not exceed +1% a year. At the same time, sales growth in 16-18 APRIL major provincial cities in the country – such as Yekaterinburg, IN-COSMETICS 18-20 JUNE Samara, Voronezh and a number of others – is estimated at Venue: Porte de Versailles, Paris HBA GLOBAL EXPO about 15% per year. Email: incos.helpline@ Venue: Jacob K Javits Bearing this in mind, more and more global cosmetics reedexpo.co.uk Convention Centre, NYC manufacturers operating in the Russian market are considering www.in-cosmetics.com www.hbaexpo.com more active expansion of the regional market. For example, plans have already been announced by some 23-24 APRIL 20-21 JUNE of the world’s leading companies specialising in direct sales, LUXEPACK SHANGHAI MAKEUP IN PARIS including Avon and Oriflame, which are going to increase the Venue: Shanghai Convention Venue: Carrousel du Louvre number of their distributors in the regions despite the Centre www.makeup-in-paris.com possible tightening of legislation in the field of direct sales of Email: [email protected] cosmetics and other products planned by the Russian www.luxepackshanghai.com 15-18 JULY government. COSMOBEAUTÉ ASIA In the meantime, other producers have also announced 14-15 MAY Venue: PWTC, Kuala Lumpur their expansion plans. One of which is L’Oréal, which is NYSCC SUPPLIERS’ DAY Email: [email protected] considering expanding the production of its Russian Kaluga Venue: New Jersey Convention www.cosmobeauteasia.com plant as well as increasing its regional sales. and Exposition Centre According to the official representative of L’Oréal Russia, Email: suppliersday@ 10-13 AUGUST the company is also considering the possibility of more active nyscc.org NACDS TOTAL STORE EXPO cooperation with the country’s leading local beauty chains www.nyscc.org Venue: The Sands, Las Vegas and, in particular, those that have developed regional www.nacds.org networks. 15-16 MAY Finally, Unilever, which strengthened its personal care LUXEPACK NEW YORK 9-11 SEPTEMBER portfolio in Russia in 2011 with the acquisition of beauty Venue: Metropolitan Pavilion, BEYOND BEAUTY company Concern Kalina, is planning to accelerate its regional New York Venue: Porte de Versailles expansion. The company snapped up an 82% stake in Concern www.luxepacknewyork.com Email: [email protected] Kalina for RUB16.7bn (u390m), with the transaction valuing www.beyondbeautyparis.com the Russian skin care company at RUB 21.5bn (u500m). 28-30 MAY Concern Kalina is said to be Russia’s largest local personal BEAUTYWORLD 20-25 OCTOBER care player, turning over roughly u303m per year. The company MIDDLE EAST TFWA WORLD EXHIBITION holds leading positions in the Russian market in skin and hair Venue: Dubai, UAE Venue: Cannes, France care and has a distribution network that spans Russia, the www.beautyworldme.com www.tfwa.com Ukraine and Kazakhstan. Unilever recently completed the expansion of Kalina’s St Petersburg cosmetics factory, 4-5 JUNE 23-25 OCTOBER investing more than u5m, and in the near future is considering INNOCOS EUROPE LUXE PACK MONACO expanding its flagship factory in Ekaterinburg (the largest city Venue: Nice, France Venue: Grimaldi Forum in Russia’s Urals region), operated by Kalina. Email: [email protected] Email: [email protected] Eugene Gerden, Moscow www.kgsglobal.com www.luxepack.com

12 • CosmeticNews Weekly No552/April 8 2013 • www.CosmeticNews.com