INDUSTRY NEWS

INDUSTRY NEWS

ESTÉE LAUDER ON TRACK FOR RECORD YEAR WITH STRONG Q3 RESULTS

The prestige beauty category is in overdrive worldwide. The Estée Lauder Companies (ELC) have posted double digit growth in its third quarter. Global net sales rose 10 per cent to US$4.25 billion - up from US$3.86 billion for the same period last year.

Every major category fuelled the booming bottom line. Global fragrance sales soared 28 per cent to US$579 million as the standout performer. Skincare sales rose 6 per cent to US$2.595 billion and makeup spiked 9 per cent to US$1.14 billion. Haircare was another double digit growth sector, rising 15 per cent to US$147 million.

ELC President and CEO Fabrizio Freda.

ELC President and CEO, Fabrizio Freda, emphasised the outstanding result. “We delivered strong sales growth and better-than-expected profitability in the third quarter of fiscal 2022 in the face of accelerated head winds as the quarter evolved, including Covid restrictions in the Asia-Pacific region.”

EMEA (Europe, Middle East, Africa) remained the largest regional market for ELC with a 17 per cent increase in sales in Q3 to US$1.99 billion. Revenues in the Americas surged 15 per cent to US$1.053 billion. But Covid restrictions in many Chinese provinces had a dampening effect on the Asia-Pacific region, driving sales down 4 per cent compared to the same quarter in 2021 to US$1.203 billion.

Eleven of ELC’s brands enjoyed double digit growth, added Freda, including M.A.C, Estée Lauder, Jo Malone London, Tom Ford Beauty and Bobbi Brown.

Increased in-store traffic flow, notably in speciality stores such as Ulta Beauty and Sephora boosted very strong growth. “We expect to deliver a record year in fiscal 2022,” said Freda. “We are confident that our business in China will rebound when Covid-19 abates.”

The confidence is well-placed. For the nine month period to date ending March 31st, ELC posted net sales of US$14.2 billion. An increase of 15 per cent over the same period in the previous financial year.

PUIG POSTS SALES OF $3.77 BILLION IN 2021

Puig have bounced back strongly from the Covid-19 pandemic. The Spanish fashion, fragrance and makeup multinational is the parent company and licensee of major brands including Charlotte Tilbury makeup, Carolina Herrera, Paco Rabanne and Jean Paul Gaultier fragrances. It is the fifth largest fragrance maker in the world, representing 10 per cent of worldwide sales.

The company’s 2021 revenues reached 2.6 billion euros (AU$3.77 billion) - an increase of 68 per cent by contrast to 2020 and 27 per cent compared to 2019.

In 2018, Puig outlined a master plan to achieve 3 billion euros (AU$4.38 billion) in global sales by 2023. The company has revised that forecast after last year’s buoyant results, saying the target is on track to be reached by the end of this year.

Puig acquired a majority stake in Charlotte Tilbury in 2020.

In 2021, global fragrance hits including Phantom by Paco Rabanne and Scandal Pour Homme by Jean Paul Gaultier pushed up fragrance sales by 41 per cent compared to 2020. Carolina Herrera’s Good Girl also enjoyed solid growth, as did niche juices from Penhaligon’s, L’Artisan Parfumeur and Christian Louboutin. Puig acquired a majority stake in Charlotte Tilbury in 2020, valuing the cult favourite at US$1 billion. 2021 was the first year the brand was integrated into the multinational’s stable and helped to fuel a 153 per cent increase in makeup sales, notably in the US and China.

The company also consolidated its skincare brands, including Uriage and Apivita, into a new Derma Division and the strategy has paid off handsomely. A surge in sales in Europe and Asia resulted in double digit growth for Puig’s skincare portfolio to 274 million euros (AU$401.5 million).

Net revenues in the US, the world’s largest single beauty market, rose 104 per cent to become Puig’s largest regional market. Sales in China increased by 212 per cent over 2020. The EMEA (Europe, the Middle East and Africa) also experienced a major boon, rising 60 per cent as leading markets recovered.

E-commerce revenues were another highlight in 2021, rising to 28 per cent of Puig’s total worldwide sales.

Puig products are sold in 150 countries, including Australia. The multinational plans to expand its online business, double down on its efforts in China and Asia and ride the wave of travel retail’s global recovery to triple its 2020 revenues by 2025.

70 PER CENT OF MILLENNIAL CHINESE SHOPPERS MADE CROSS-BORDER PURCHASES IN 2021

The daigou boom may have faded but China is still a major growth opportunity for Australian health and beauty brands.

Alibaba’s 2021 Singles’ Day, the world’s largest online shopping festival, set a new record, generating AU$115.8 billion in revenues over the 11-day extravaganza last November.

More than 900 million consumers in China and 290,000 merchants and brands took part. Australia was again among the top five foreign countries selling into China, alongside the US, Japan, Germany and Canada.

Australian vitamin and minerals supplements were the big winners, followed by beauty supplements and skincare products. More than 2000 Australian companies have opened online stores on Alibaba, including leading beauty brands and retailers such as Mecca. JD.com, the other Chinese online giant, is also a major gateway for Australian brands selling into China.

Gen Z and Millennial female consumers in China are the most important demographics when it comes to buying makeup and skincare. Alibaba’s Tmall reported recently that 50 million under-27 buyers purchased cosmetics through the platform over the past year.

Younger Chinese are the sweet spot for premium beauty brands. Consumers under 29 years of age account for nearly 60 per cent of the category’s sales.

Many Australian beauty brands specialise in natural, organic and clean beauty products. According to Mintel, more than 77 per cent of Chinese consumers preferred clean, natural and organic beauty products and 60 per cent believed they were more effective than their mainstream counterparts.

In a recent study from ESW, the market leader in DTC global commerce, more than 70 per cent of Millennial Chinese shoppers said they made cross-border purchases in 2021. By contrast, Gen X shoppers made only 14 per cent of cross-border purchases, followed by Gen Z (11%) and Baby Boomers (2%).

Lower prices and product diversity were the twin magnets for Millennial Chinese shoppers, revealed the ESW report. More than 24 per cent of respondents said they shopped online because of cheaper prices and 22 per cent revealed they shopped internationally because they couldn’t find similar products locally.

Other major findings in the ESW survey revealed that 53 per cent of respondents prefer to shop online and 45 per cent intended to spend more in 2022.

GLOBAL SELF-TANNING MARKET TO REACH US$1.48 BILLION

Australia punches above its weight when it comes to self-tanning products, led by brands such as Bondi Sands and Le Tan.

Global sales of self-tanning products plunged during the height of the Covid-19 pandemic as majormarkets suffered lockdowns and other restrictions. The tide turned last year and worldwide sales recovered significantly, reports Fact.MR, the international market research firm, who predict that sales will reach US$1.48 billion by 2032.

By the end of this year, global sales of self-tanning products are expected to reach US$875 million, adds the researcher. Women represent 60 per cent of the market and lotions have a 50 per cent global market share.

Swimsuit model Ashley Graham for St Tropez.

An increasing number of selftanning products are launching organic and clean formulas, notably local brands including Kora Organics and Wotnot. A smart move reveals

Allied Market Research, the global market research firm, who forecast that the global organic personal care and cosmetic market will reach US$58.61 billion by 2031 with a CAGR of 5.3 per cent.

The skincare segment is the giant of the category with a 32 per cent market share, but oral care is the fastest-growing sector. The US, the largest single beauty market in the world, currently accounts for 36.4 per cent of global revenues, but the Asia/Pacific region, including Australia, is projected to achieve the biggest growth over the next decade.

The drugstore/pharmacy channel is well to the fore, says Allied Market Research, with a 37.2 per cent slice of the worldwide natural and organic beauty market.

In addition to increased health consciousness during the Covid-19 pandemic, key drivers fuelling the use of organic and natural beauty products are the explosion in DTC channels, major discounts and easy payment plans.

PRICELINE BOOSTS WELLBEING CREDENTIALS WITH NEW MEDICAL INSURANCE OFFER

Priceline has been a major wellbeing destination for more than 40 years. In addition to its beauty focus, the company has long been one of Australia’s leading retailers of vitamins, minerals and supplements.

To capitalise on this long-standing commitment to maintaining good health, Priceline Pharmacy has unveiled a new medical insurance offer in partnership with NIB, the leading healthcare fund.

Initially launched in 2000, the Priceline Sister Club is Australia’s biggest health and beauty loyalty program with more than 7 million members.

Two years ago, Priceline revamped the program, offering new levels of personalisation, prizes, gifts and a trio of membership levels - Sister Club, Diamond and Pink Diamond.

Ed Close, NIB Chief Executive of Australian Residents Health Insurance.

The company’s new medical insurance will extend Sister Club benefits. New sign-ups will access Sister Club membership bonuses for each $1 spent on the insurance premium and a $5 voucher for each $50 spent in-store at Priceline and Priceline Pharmacy locations.

According to Ed Close, NIB Chief Executive of Australian Residents Health Insurance, Sister Club members will profit from a bespoke best-in-class medical insurance.

Wellbeing has also become a new focus for Galeries Lafayette. In mid-July, the iconic French department store chain will open a dedicated wellness department in the basement level of its flagship store on the Boulevard Haussmann in Paris.

Formerly the popular shoe department, the 10,300 square metre space will host treatment services, a gym, a restaurant and French and international natural beauty and wellness brands.

BOOTS TAPS SIX MAJOR BEAUTY TRENDS FOR 2022

The global beauty and pharmacy industries are waiting with bated breath to see who will be victorious in the current battle to acquire Boots from Walgreens Boots Alliance.

The venerated British chain is the largest beauty retailer in the UK and plans to remain so. Last September, the company announced the rollout of 30 new beauty halls across the UK.

Boots has also added more than 65 new beauty brands to its roster over the past two years and has introduced “trend zones” instead of beauty counters to attract younger consumers.

Boots also reported a significant rebound in its second quarter sales. Revenues increased 22 per cent compared to the same quarter last year. Beauty sales led the resurgence.

Using collected data from Google Trends, Mintel and Boots.com, Boots have pinpointed six major trends expected to impact beauty sales for the rest of the year. 1. Expert skincare is top of the list as more consumers seek out solutions to leading skin concerns. Facial skincare sales at the retailer have increased by 41 per cent year-on-year. CeraVe sales have jumped by 54 per cent and La Roche-Posay revenues are up 41 per cent.

Popular brands such as The Ordinary are effective and affordable.

2. Anti-stress beauty routines will continue to be top-of-mind, says Boots, as Gen Zers and younger Millennials struggle with increased anxiety and stress.

3. Affordability will become more of a prime mover in beauty purchasing as inflation pressures mount worldwide. Popular brands such as The Ordinary have also played a major part in educating consumers that quality doesn’t have to come with a hefty price tag. Boots currently offers 170 SKUs priced at AU$9 or lower.

4. Diversity and sustainability will continue to impact beauty buying intentions. Boots launched its #AllTogetherBeautiful campaign in March to re-affirm its commitment to being the most inclusive beauty retailer.

5. Stress and anxiety can lead to scalp problems or increase the onset of major conditions such as dandruff. Scalp-focused haircare for men and women is enjoying a major spike in sales in the UK and Boots reports that search terms including the word scalp have increased by 170 per cent over the past 12 months.

6. Maximalist makeup has been trending strongly as leading global markets emerged from pandemic lockdowns and restrictions. Boots believes that girls will continue to want more fun and hone their creativity as summer approaches in the Northern Hemisphere. Recent launches by the company include Revolution Beauty and Kylie Cosmetics.

COTY REVENUES SURGE 15 PER CENT IN Q3

Coty’s rebound is well underway. Robust results from the multinational’s prestige and consumer products divisions pushed revenues up 15 per cent in the third quarter of its financial year to US$1.186 billion.

The buoyant performance also boosted the beauty major’s nine month revenues to US$4.136 billion - up 16 per cent over the same period last year.

The leading engines of growth were the recovery of EMEA (Europe, the Middle East and Africa) markets, a reboot in travel retail and continued increases in the US online market.

Coty’s prestige stable was a standout with sales growth of 21 per cent during Q3 to US$726.4 million, accounting for 61 per cent of overall sales. Upmarket fragrances from Gucci, Chloe, Burberry and Hugo Boss saw perfume revenues spike 20 per cent. Key launches included Gucci Flora Gorgeous Gardenia and Burberry Hero.

Prestige cosmetic sales almost doubled in the third quarter compared to the same period last year with Gucci Beauty, Burberry and Kylie Cosmetics lifting the bottom line.

Consumer beauty revenues surged 10 per cent like-for-like in Q3 to US$459.8 million, boosted by makeup, mass fragrances and body care. Rimmel London’s Kind & Free range led the charge and Max Factor, Sally Hansen and CoverGirl gained market share in leading markets.

Our Q3 earnings mark the seventh consecutive quarter of Coty reporting results in line to ahead of expectations, said Sue Y. Nabi, CEO of Coty Inc. “I am extremely proud of the organisation for delivering these results, and outperforming the overall beauty market in an increasingly volatile environment.

“This confirms that Coty has the brands and the people to win in the beauty market, guided by our strategic priorities of delivering above market sales growth and expanding gross margin, allowing for brand reinvestment, profit expansion and continued de-leveraging.”

In another full circle move, Coty has re-appointed Queen Latifah, the Grammy award-winning and Oscar-nominated artist, actress and entrepreneur, as the face of a soon-to-be-announced collection under a multi-year partnership.

Back in 2006, Coty collaborated with Latifah to create one of the first ranges in mass cosmetics formulated for deeper skin tones.

INTER PARFUMS SALES SURGE 26 PER CENT TO US$250.7 MILLION IN Q1

Inter Parfums, the maker of Jimmy Choo, Coach, Guess and Montblanc fragrances, enjoyed a record-breaking first quarter with global sales increasing 26 per cent to US$250.7 million - up from US$198.5 million for the same period last year.

All major geographic regions experienced double digit growth - the US (+12%), Western Europe and Asia/Pacific (both 41%), the Middle East (+27%), South America (+38) and Eastern Europe (+13%).

“The current first quarter was exceptionally strong with significant gains by our largest brands”, noted Jean Madar, chairman and CEO of Inter Parfums. “Montblanc, Jimmy Choo, Coach and Guess brand sales rose 22 per cent, 7 per cent, 22 per cent and 27 per cent, respectively.”

During the first three months of the year, the multinational launched several major juices, including Montblanc Legend Red and Guess Uomo. The company’s mid-priced stable of brands such as Abercrombie & Fitch, Kate Spade, Oscar de la Renta and Van Cleef & Arpels also enjoyed double-digit growth. Newer brands in the portfolio - MCM, Moncler, Ferragamo and Ungaro also played their part in driving the first quarter increase.

Our brands are in high demand in a robust environment for the fragrance industry, added Madar. “We have a large number of brand extensions across many of our brands launching throughout the year plus Boucheron Singulier and Coach Open Road - entirely new men’s pillars in the second half. Plus, in July, Donna Karan and DKNY fragrances will join our brand portfolio. We remain totally optimistic about the remainder of this year and the years ahead.”

In a bullish forecast, inter Parfums estimate that global net sales for the calendar year 2022 will reach US$975 million.

LOTTE DUTY FREE UNVEILS SYDNEY SUPER STORE

Lotte Duty Free reveals that the total Australian travel retail market was worth AU$1.124 billion per year pre-Covid and South Korea’s largest travel retailer has very big plans to grow the sector. The multinational says it will target the same amount of sales from its Australian operations alone over the next 10 years to become the country’s largest duty-free operator.

Lotte Duty Free recently opened a 3000 square metre, three-storey flagship store in Sydney as a major building block for its ambitious strategy. Located at the junction of Pitt and Market Streets in the CBD, the company has hailed the new destination venue as “the restart of our global business”.

Lotte Duty Free shuttered all of its 19 stores during the pandemic, except for its Cam Ranh Airport outlet in Nha Trang in Vietnam. The opening of the new Sydney store takes Lotte’s network to 20 stores in seven countries - South Korea (8), Australia (4), Vietnam (3), Japan (2) and New Zealand, Guam and Singapore( all 1).

The interiors of the new Sydney store were designed by Bates Smart, one of Australia’s oldest architectural firms and responsible for landmark developments such as Federation Square in Melbourne. Over 150 international and local brands across wine and spirits, beauty, watches and jewellery are on hand to tempt travellers.

Beauty is a huge part of the mix. More than 100 brands are available, including The Beauty Chef, Vida Glow, Estée Lauder, Lancôme, Shiseido, SK-II, La Prairie, Sulwhasoo, Le Labo, By Kilian and Editions de Parfums Frederic Malle.

Lotte has also introduced Japanese skincare brands Pola and Decorte to Australian travel retail for the first time. Other inducements include an average discount of 15 per cent lower than local retail prices for leading beauty products.

Luxury watches from Breitling, Montblanc, Longines and more are also a major focus. A resident sommelier is on hand to showcase the finest international wines and more than 100 premium whiskies.

In other travel retail beauty news, Goldfield & Banks, the niche luxury Australian perfume house, also made its debut in the sector with Dufry at Melbourne Airport earlier this month.

Founded by Dimitri Weber in 2016, the brand is now sold in more than 400 stores worldwide in 30 countries and will launch in Harrods in London on June 6th.

NOMINATIONS OPEN FOR AUSTRALIA’S PREMIER PHARMACY ASSISTANT AWARD

Nominations for this year’s The Pharmacy Guild of Australia/Maxigesic Pharmacy Assistant of the Year Award (PATY) are now open at pharmacyassistants.com/paty.

PATY is the premier award for Australian pharmacy assistants, recognising and celebrating the ‘best of the best’ in community pharmacy and recognising outstanding pharmacy assistants’ skills, knowledge, leadership and customer service across 12 months.

With the award offering the option of thirdparty as well as self-nomination, pharmacists across Australia are encouraged to nominate those pharmacist assistants who have demonstrated excellence during 2021.

Pharmacy Guild National President, Professor Trent Twomey, said the PATY award is one of the best ways to encourage pharmacy assistants in their roles.

“Now in its 16th year, the Pharmacy Assistant of the Year Award provides a truly national platform to acknowledge and appreciate our frontline staff,” Professor Twomey said.

“With the support of our award partners AFT Pharmaceuticals, Metagenics, Gold Cross and Retail Pharmacy Assistants magazine, we look forward to acknowledging and celebrating more pharmacy assistants than ever before.”

Ashleigh Hutson.

Last year’s award saw Ashleigh Hutson from Bardens Amcal Pharmacy in the Northern Territory recognised as Australia’s outstanding pharmacy assistant.

As the national winner, Ashleigh received over $10,000 worth of prizes including a cash prize of $5,000, a customised training package, and return travel and accommodation to the 2022 Australian Pharmacy Professional Conference (APP) and 2022 Pharmacy Assistant National Conference.

Ashleigh said winning the award was a significant milestone in her career.

“I am so passionate about this career and it was such an honour to be awarded the title of Pharmacy Assistant of the Year.”

“Being involved in PATY has given me the platform to connect with other pharmacy assistants, to share experiences, and to learn from each other’s passion for healthcare.”

“It was an incredible opportunity and it was amazing meeting and learning from the experiences of my fellow state finalists.”

To nominate an outstanding pharmacy assistant, go to pharmacyassistants.com/ paty. Third party nominations close 1 July.

DECIEM SHUTTERS FOUR BRANDS

When Deciem, the parent company of The Ordinary, launched in Australia in 2016, there were six brands in its portfolio - Hylamide, The Chemistry Brand, Abnomaly, HIF, NIOD and The Ordinary. Within three years, the Canadian company was selling two million units of The Ordinary in Australia through e-commerce and leading retailers including Priceline and Myer.

Now in its 9th year of operation, Deciem scored a 29 per cent investment from the Estée Lauder Companies (ELC) in 2017. In May last year, the multinational upped its stake to 76 per cent with a view to taking 100 per cent control by 2024. The US$1 billion deal, which valued Deciem at US$2.2 billion, ranked as ELC’s largest acquisition to date.

Hylamide is one of four brands that has been discontinued.

In June 2021, the comparison website, Skincare Hero, revealed that The Ordinary was the most searched-for skincare brand in the world - ahead of Dove and Bioderma. The twin drivers of success for The Ordinary, known as TO to its army of fans, are affordable prices and the endorsement of celebrity fans such as Kim Kardashian.

The Ordinary accounts for 80 per cent of Deciem’s total sales and the company has announced it will focus on science-first functional skincare, led by The Ordinary and NIOD, an acronym for Non-Invasive Options in Dermal Science. In Australia, NIOD is available through Myer, Adore Beauty, Lookfantastic and other leading e-tailers.

In pursuit of this re-structure, Deciem will shutter four of its original brands - HIF, Hylamide, Abnomaly and The Chemistry Brand.

According to a company statement - “The Ordinary will continue to raise communication and pricing integrity in the beauty industry,

while NIOD will always be our platform for pushing the limits of science in skin care. This new approach will power us to do more of what you love, while allowing us the space to innovate with new brands in the future.”

FARFETCH GROUP ROLLS OUT OVER 100 BEAUTY BRANDS

Luxury beauty is the gift that keeps on giving. Bain & Co, the global management consultant, predicts that the global luxury beauty category will reach US$69 billion by 2025 to become the second largest sector in the worldwide personal luxury market.

Retail Beauty recently reported that Farfetch, the luxury e-commerce platform, had acquired Violet Grey, the US-based cult luxury beauty retailer, in a bid to launch the platform, Beauty on the Farfetch Marketplace.

The moment has arrived. Last week, Farfetch rolled out more than 100 makeup, skincare, haircare, fragrance and grooming brands. Established and niche names include Tom Ford, La Mer, Charlotte Tilbury, Chanel, Gucci, Prada, Sisley Paris, Olaplex, YSL Beauty, Westman Atelier, Chantecaille, Cle de Peau, Christophe Robin, Augustinus Bader, Kjaer Weis, Maison Martin Margiela, By Terry, Susanne Kaufmann and Dr Barbara Sturm.

The beauty brands are available across three core businesses - Farfetch.com, Browns, the iconic UK fashion and luxury goods boutique, and the New Guards Group, the Italian luxury fashion holding company acquired by Farfetch in 2019.

Makeup artist @isamayaffrench is a member of the #FARFETCHBeautyGlobalCollective.

Founded in 2007, Farfetch posted annual sales of US$2.3 billion and gross merchandise volume of US$4.2 billion in 2021. The company’s goal is to offer the best luxury beauty products to service customers across all ages, races, cultures and genders, says Holli Rogers, chief brand officer of Farfetch and chair of Browns.

“All of our companies have different perspectives but we are united in the same goal, which is to take beauty beyond boundaries,” she adds. “The acquisition of upscale LA beauty retailer Violet Grey in January this year was a clear demonstration of intent.”

Farfetch has a significant percentage of Gen Z and Millennial customers. Its foray into beauty puts it in direct competition with leading international beauty retailers, including Sephora, Ulta Beauty, Space NK, department stores and fashion e-tailers such as Net-a-Porter.

In early April, Farfetch also invested US$200 million in the storied US department store group, Neiman Marcus, to expand its innovation and digital capabilities.