Quarterly results show prestige is on the rise
Many analysts believe that consumers worldwide will start to loosen their purse strings in 2012 and the long-awaited return to luxury will finally shift into gear. The latest financial results from some of the major beauty companies certainly suggest that the climb back has already begun. Maybe not to the dizzy heights of the spend-spend-spend era, but certainly enough for the CEOs of prestige beauty companies to breathe easier. Emerging markets have been key to the global comeback of luxury cosmetics, of course, but L'Oreal claims that gains in the prestige sector have been very evident in developed markets, too.
The French multinational's third quarter results revealed that upmarket brands such as Lancôme and Yves Saint Laurent were major contributors to the bottom line of its luxury division. Global prestige sales rose by 8.8%, accounting for 25% of L'Oreal's total sales. In contrast, L'Oreal's mass market brands such as Garnier and Maybelline New York saw growth slow to 3.4%, down from 5.2% for the first six months of the year.
Over at Estée Lauder, CEO Fabrizio Freda has stated firmly that the luxury shopper is back. And the company's third quarter results back up the claim. Revenues were up 18.4% over the last quarter and net income spiked 45.8% to $US278.6 million. Results that owed a lot to gains in Asia and travel retail.
NPD also confirms that prestige beauty products are again viewed as "pragmatic luxuries" in the US. In the first nine months of the year, they generated sales of $US2.5 billion, largely in department stores, an increase of 9% over the same period in 2010. Saks is just one leading department store chain to claim that premium beauty products are one of its hottest sales sectors.
L'Oreal cleans up with Clarisonic
As reported on beautydirectory a few weeks ago, the global market for at-home devices that mimic professional skincare treatments has topped the $US1 billion mark. The Clarisonic brand, made by Pacific Bioscience Laboratories (PBL), has become the cleansing machine of choice for celebs and models but global sales were only $US105 million in 2010.
That figure is sure to change following a merger agreement between PBL and L'Oreal USA. It's a smart strategy by the French multinational to springboard into the rapidly growing category. Clarisonic products from the Classic to the Clarisonic Plus are used by dermatologists, cosmetic surgeons and spas worldwide and also sell well on home shopping networks in the US, the UK, Australia, Mexico, Canada and Asia.
The future looks glittering, though. David Giuliani, CEO of PBL states the obvious when he says: "L'Oreal brings powerful marketing, distribution and R&D synergy to the Clarisonic agenda. Combining forces, we're confident Clarisonic will rapidly achieve its global mission, to provide the power to change the future of your skin."
Less than perfect faces could be a new trend
Keith Richards' raddled face fronted Louis Vuitton ads recently and now Iggy Pop has been appointed as the new face of Paco Rabanne's Black XS L'Exces fragrances for men and women. There's no denying that the image of the veteran singer and "father" of punk rock wearing gold sequinned pants sticks in your mind. More importantly, though, the move is a refreshing change from the pretty boys normally hired to embody the spirit of a designer scent. Launching first in France in January, the new fragrances should be nice little earners rather than blockbuster like Paco Rabanne Lady Million and 1 Million.
Melissa McCarthy of Mike and Molly and Bridesmaids fame looked rumpled even when she accepted an Emmy in September. But P&G thinks that her homespun look is a perfect fit for the "holistic reinvention" of the iconic Ivory Soap brand in the US. McCarthy will host "Soap Dish", the brand's new online community on Facebook which hopes to liven up discussions about everyday topics such as "motherhood, marriage and meatloaf".
According to the game Ms McCarthy, "When one bar of soap can handle backyard dirt, spaghetti hands and the unindentified crusty bits under my girls' necks, I'm in." How times have changed since Ivory Soap got a mention in Eartha Kitt's saucy ditty, I Want To Be Evil.
Social media fingers top scents for leading UK retailer
The Perfume Shop, the UK's second largest fragrance retailer boasting a national network of 222 shops, is a savvy user of social media. Over 50,000 fans of its Facebook page voted for their favourites in the inaugural The Perfume Shop Awards to come up with a people's choice list that would probably be similar in Australia.
The gong for best women's launch of 2011 went to DKNY Golden Delicious. Beyonce Heat found favour as the top celebrity fragrance. The glamorous bottle of Lady Million took the sexy juice over the line for best packaging. And Boss Orange Man was judged to be the best men's launch of the year.
Snippets from the wires
- Western beauty companies aren't the only interested parties eyeing the Chinese market. Greentouch, one of Thailand's leading herbal cosmetics brands, has announced it will become the first Thai brand to enter China.
- It comes as no surprise that Ping An, China's largest insurance company, has won the bid to take over Shanghai Jahwa, the state-owned cosmetics company. Founded in 1898, Shanghai Jahwa accounts for 1.6% of the Chinese personal care and cosmetics market. According to analysts, Ping An aims to boost the brand by entering the watch and jewellery business.
- Genomics is the new watchword in high-tech skincare. Nu Skin, the Utah-based skincare and nutrition company that turned over $US1.54 billion last year, has announced its intent to buy LifeGen Technologies for $US11 million. The two companies first teamed up two years ago to produce "new generation, anti-ageing products". The first fruit of the partnership was Nu Skin's ageLoc nutritional supplement.
- Pacific World has acquired the W.E Bassett Company to become the fifth largest cosmetics company in the US and the second largest nail company in America. Names you will recognise behind the two corporate monickers include Nailene and Fing'rs. One of the first launches under the new company will be SensatioNail, billed as the first-ever, at-home gel manicure system.
- American Apparel has become the latest clothing brand to release a make-up product. A new lip gloss in nine shades such as Legalize LA and Pantytime will share floorspace with AA's top-selling nail polish range.
- Salvatore Ferragamo's latest fragrance - Signorina - launches globally in February. As the name suggests, it's another designer fruity floral aimed at the under 30s. New L'Oreal face - Bianca Balti - is the girl in the ads.
- We are going to see more of this ... Estée Lauder recently launched its first fragrance exclusively for the Middle Eastern market. Called Wood Mystique, it's a unisex scent with the rich, identifiable luxuriousness loved in that part of the world says Karyn Khoury, Lauder's Senior Vice-President, Corporate Fragrance Development Worldwide.
