www.bwconfidential.com The inside view on the international beauty industry Dec 18, 2014 - Jan 7, 2015 #103 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Comment Inside The buzz 2 Quick and easy News roundup espite the trend for elaborate services and in-store customer Netwatch 6 Dconsultations, there is a definite market for quick and easy beauty buys. This convenience factor is one reason for the Beauty blogger review emergence of vending machines for beauty. US-based online subscription company Birchbox sought to add Interview 7 a fun factor to the equation with its vending machine in Paris Estée Lauder Companies group train station Gare Montparnasse. The miniature products sold by president international Cedric Prouvé Birchbox through the machine are not only intended as a solution for consumers who forgot to bring their lip balm or moisturizer on Insight 9 a trip, but are a real-world way for commuters to try out a new US prestige market product they may not have thought about before. While waiting for a train they are likely to have the time to make the purchase and the limited offer may mean less confusion about Show review 13 what to buy. In addition, the price of just €4 for a pack containing two products doesn’t Cosmoprof Asia seem like much of a financial risk. Vending machines, of course, are nothing new, but for the most part they have not Store visit 15 really taken off for beauty. And in truth, Birchbox’s effort is more about building company Birchbox, Paris awareness offline than selling products. However, installed in the right place (high-traffic train stations seem ideal) and with the right products, vending machines could well begin to attract the non-perfumery, non-department–store shopper to beauty. We would like to take this opportunity to wish you a peaceful and prosperous New Year and we look forward to bringing you more news, commentary and analysis in 2015. Oonagh Phillips Editor in Chief [email protected] Subscribe on p.17 or go to www.bwconfidential.com News roundup At a glance... n Shiseido announces new growth strategy n Kiko sells bonds to fund expansion The buzz n Interparfums Inc signs Abercrombie & Fitch license n Sephora opens flagship store in Australia Stay informed with our daily news headlines on www.bwconfidential.com Strategy Shiseido has outlined its new growth strategy, called Vision 2020. Between 2015 and 2017, the Japanese beauty group will focus on growing its business in China, where it will “rebuild” its brand portfolio, in greater Asia and in the travel-retail and e-commerce channels. These initiatives are forecast to result in a CAGR of between 3 to 5% by fiscal 2017 and 5 to 7% from fiscal 2018 to 2020. The new strategy will also include introducing new brands, developing in emerging markets and “unexplored areas”, as well as potential mergers and acquisitions. Shiseido also aims to expand marketing and R&D investments, and will continue to make structural reforms for the next six years to reach operating income of ¥100bn ($853m) in 2020 and consolidated net sales of ¥1trillion ($8.5bn). The group will segment its brand portfolio into four divisions: Prestige, Cosmetics, Personal Care and Professional, and create six regional hubs. The Prestige division will include the company’s global brands: Shiseido, BareMinerals, Clé de Peau Beauté and Nars, and will focus on growing the business in Asia (especially Japan and China), the US, Europe, and in travel retail. For the Cosmetics division, Shiseido said it will position the Elixir brand in China and other Asian countries in the medium-to-high price segment. The Za brand will be an entry- price product for younger consumers, mainly in emerging markets in Asia and in China. Online sales will also be a focus, especially in Japan and China. The Personal Care division will reposition its brands in each category and reinforce its presence in-store, while the Professional business will focus on its core brands in Asian markets: Shiseido Professional and Joico. Shiseido says it will invest the capital generated by these reforms into marketing initiatives, with an aim of investing ¥100bn ($853m) beginning in fiscal 2015. There will also be R&D investments, including the creation of a Global Innovation Center in Japan and expanded research teams in the US, Europe, Southeast Asia and China. Budget Italian cosmetics chain Kiko has sold bonds worth €100m in a private placement deal, a move that is intended to finance its international expansion. The bonds will expire in December 2020 and will be listed on the Irish stock exchange. Kiko, owned by the Percassi group, operates more than 600 stores in Europe and recently launched in the US. US-based Interparfums Inc has signed a beauty license with fashion retailer Abercrombie & Fitch. The seven-year agreement is for fragrance and fragrance-related products for the Abercrombie & Fitch and Hollister brands. The first scents are to launch in 2016. n n n www.bwconfidential.com - Dec 18, 2014 - Jan 7, 2015 #103 - Page 2 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL News roundup n n n French skincare brand Ioma has launched in Russia in 90 Ile de Beauté stores. Three locations will be positioned as flagships—two in Moscow and one in St. Petersburg. These stores will house the Ioma Sphere 2 diagnostic tool on a permanent basis, while Ioma Factory, which creates personalized skincare formulations, will be in store for specific The buzz animations. Ioma will also have dermatologists on hand for certain events. Fragrance house Givaudan has launched a website devoted to patchouli sourcing, called The Journey of Patchouli, at www.givaudan.com/patchouli. “We wanted to provide our clients, the media and the end consumer with a didactic tool that allows them to discover this ingredient, where it comes from, how it is harvested and how it is used in fine fragrance,” a Givaudan spokesperson tells BW Confidential. She adds that depending on the success of this first initiative, the company could launch additional sites for other fragrance ingredients. Retail LVMH-owned retailer Sephora opened its first store in Sydney, Australia at the beginning of December. The flagship store is located at Sydney’s Pitt Street Mall. Sources say Sephora plans to open up to 20 stores in the country next year. UK-based luxury-goods retailer Harvey Nichols is to open a store in Doha, Qatar in the first quarter of 2017. The venture is in partnership with Qatari business group Saleh Al Hamad Al Mana. The 80,000ft2 (7,432m2) store will be located in Doha Festival City mall. This store will be the retailer’s eighth outside of the UK. Harvey Nichols has locations in Dublin, Riyadh, Hong Kong, Dubai, Istanbul, Ankara and Kuwait. French department-store operator Galeries Lafayette is to open a new store in the Carré Sénart shopping complex in the suburbs of Paris in 2018. The store will cover 2 2 BW Confidential 6,000m (64,583ft ) on two levels. 4 avenue de la Marne 92600 Asnières sur Seine, France [email protected] Hypermarket operator Carrefour is testing a new beauty concept at its store in Vitrolles, Tel: +33 (0)1 74 63 49 61 Fax: +33 (0)1 53 01 09 79 France. Called Pro’s & Co, the shop-in-shop offers the retailer’s own brand Pro’s, as www.bwconfidential.com well as third-party brands L’Oreal Paris, Gemey, Rimmel, Essie and make-up tools from ISSN: 2104-3302 Publisher: Nicolas Grob Babyliss. Pro’s & Co has beauty advisors on staff and is open from December 11–31. Editorial Director: Oonagh Phillips [email protected] Deputy Editor: Alissa Demorest [email protected] French fragrance brand Maison Francis Kurkdjian has opened its second Paris Editorial Coordinator & Assistant: standalone store, five years after its first boutique opened in the French capital. Located Katie Nichol [email protected] in the Marais district, the new store is initially opening in a pop-up format for two months Contributors: Tina Clark, Alex Wynne, Renata Ashcar, Mayu Saini, Raphaëlle Choël, and will then close for renovation and re-open in May 2015. Corinne Blanché The boutique offers the brand’s entire range, as well as a collection of perfumed leather Subscriptions 1 year: electronic publication (20 issues) + goods that launches in December exclusively at the boutique. Created in partnership with print magazine (4 issues) + daily news: €499 or US$699 saddle maker Atelier Renard, the line is debuting with Twin Set, two bi-color slim hand- [email protected] Advertising sewn cardholders that fit together, made of calf leather or crocodile skin. The items come [email protected] in two scents, created exclusively for the collection. BW Confidential is published by Noon Media 513 746 297 RCS Nanterre “We’re testing the waters with Twin Set and will later expand the range to include other Copyright © 2014. All rights reserved. Reproduction in whole or in part without items, such as notebook holders,” explains brand founder Francis Kurkdjian. Prices for permission is strictly prohibited. Twin Set range from €525 to €1,165. n n n www.bwconfidential.com - Dec 18, 2014 - Jan 7, 2015 #103 - Page 3 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL News roundup n n n People Shiseido president and ceo Masahiko Uotani has taken on the additional role of head of human resources and corporate cultural reforms. Jean-Philippe Charrier, chief officer The buzz of the Professional Business Operations division, is now responsible for Asian Strategy, a role formerly held by Yu Okazawa, chief officer of China Business Division and general manager of marketing development China. Yoshiaki Okabe, general manager Prestigious Cosmetics Business division at Shiseido China, has been named general manager of International Marketing department and general manager of Marketing Strategy Group, International Business division.