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 perfumes 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.