Cosmetics and personal care sales offset slump in pharmacy OTC health revenues; Coach firms as likely buyer for Jimmy Choo; Estée Lauder posts strong sales growth for Q3; and white wine identified as major rosacea trigger.
Cosmetics and personal care sales offset slump in pharmacy OTC health revenues
What a difference a year makes. Vitamins, analgesics and allergy remedies are a mainstay of pharmacy revenues – accounting for 61 per cent of over-the-counter (OTC) sales. From mid-2014, overseas demand for Australian vitamin products, mainly from China, fuelled a huge boom. But the introduction of new Chinese import regulations in April 2015 produced a sharp slowdown. Local legislation, such as the removal of Panadol Osteo from the Pharmaceutical Benefits Scheme and the up-coming re-scheduling of products containing codeine, have caused a 13 per cent slump in analgesic revenues.
According to Nielsen, these declines in health category sales have been offset by continued growth in beauty and personal care. Pharmacy beauty sales increased 5.9 per cent over the past 12 months to 24.2 per cent of total OTC sales. Personal care sales spiked 10.9 per cent to 14.9 per cent of overall revenues in the OTC category. Both developments signal positive future growth prospects for the pharmacy channel, notes the researcher.
Coach firms as likely buyer for Jimmy Choo
Coach bought the Stuart Weitzman shoe brand two years ago for $US600 million, propelling an upward curve in sales. In its quest to become a major multi-brand player, the ambitious US luxury company made an unsolicited approach to Burberry a few months ago, which was quickly dismissed by the Brit heritage brand. Coach is also still in the race to acquire Kate Spade.
Jimmy Choo was put in the block last month by majority owner JAB Holding, owned by Germany's billionaire Reimann family. The privately-held company also own a majority stake in Coty and the Bally luxury brand, which is also up for sale. There was early talk of attracting private equity investors from Asia and the Middle East in the absence of interest from major European luxury houses.
Joshua Schulman, the president and CEO of Coach, was head of Jimmy Choo until 2012 and the company has emerged as the frontrunner to buy the former workplace of its new boss. The move makes sense. Jimmy Choo would strengthen Coach's presence in the footwear market, dialing up the luxury several notches from Stuart Weitzman. With a market value of US$896 million, Jimmy Choo's sales climbed 15 per cent to AU$636 million in 2016.
A buyout would provide Coach with an "affordable" entry to the crucial Chinese market, in addition to its huge growth potential in other key international markets. Another sweetener to a deal would be Jimmy Choo's fast-growing fragrance business.
Estée Lauder posts strong sales growth for Q3
Luxury powerhouse brands Tom Ford, Jo Malone and La Mer fuelled strong growth for Estée Lauder in the third quarter. Overall net sales rose 8 per cent to $US2.86 billion and net earnings soared 12 per cent to $US298 million. Global travel retail and China were exceptionally strong over the period, says President and CEO Fabrizio Freda. "We are confident in our ability to achieve our previously stated fixed 2017 sales growth of 6 to 7 per cent".
Global skincare sales edged up 3 per cent to $US1.105 billion. La Mer delivered double-digit gains and the Advanced Night Repair and Revitalizing Supreme lines powered the performance of the Estée Lauder core brand.
La Mer, Tom Ford and Smashbox enjoyed double-digit increases in the makeup category, elevating worldwide sales to $US1.271 billion. The Double Wear and Pure Color Envy franchises boosted the bottom line for Estée Lauder.
Fragrance sales were up 22 per cent to $US336 million, Jo Malone enjoyed "outstanding" double digit growth in all regions. Tom Ford juices were also a major factor in the fragrance category's healthy result, alongside key launches such as Tory Burch Love Relentlessly and Michael Kors Wonderlust.
Haircare sales dipped 2 per cent to $US126 million. Overall, the Americas remained the number one regional market for Estée Lauder at $US1.71 billion, followed by Europe, the Middle East and Africa at $US1.26 billion and Asia/Pacific at $US560 million.
White wine identified as major rosacea trigger
Alcohol is not good for the skin – period. Too much tippling torpedoes natural glow via dehydration, lowers protective antioxidant levels and dilates blood vessels. But up until recently, much of the blame for rosacea flare-ups was laid at the door of red wine.
A new study from the American Academy of Dermatology has fingered white wine as a major culprit. It's a big one too – 82,000 women tracked for 14 years. Researchers found that women who drink as little as a couple of glasses of white wine per month had a 14 per cent increased risk of developing rosacea. Only five glasses of white wine a month accelerated the likelihood to 49 per cent. Surprisingly, red wine drinkers did not suffer from any heightened danger at all.
The study did not discover any reason white wine was such a strong trigger for rosacea. Maybe switching to Merlot or Cab Sav might be a good idea for those who don't want to go cold turkey.
Snippets from the wires
- Beiersdorf's performance for the first three months of the year exceeded analysts' estimates. Organic sales rose 4.8 per cent to 1.8 billion euros ($AU2.67 billion). La Prairie posted the biggest sales jump – 10.5 per cent – followed by Nivea (3.5%) and Eucerin (3.3%).
- BPC Research estimates that China and the US will power 54 per cent of the $US20.3 billion growth in the global prestige beauty market over the next four years. The Indian beauty market has doubled in size over the past five years to $US12 billion. Beauty sales in Indonesia over the same period have climbed to $US4.6 billion.
- Jo Malone is on record as saying that the sale of her fragrance brand to Estée Lauder was the worst decision of her life. She could be right if the performance of her Jo Loves spin-off is proof. Since its launch in 2009, the brand has lost $AU6.8 million with creditors owed close to $AU7 million. The company recently posted further losses for the year to June 2016 of $AU1.001 million.
- It's a scary thought but more people worldwide own mobile phones than toothbrushes. But the oral care industry is fighting back. Today, two-thirds of dental/oral care products are classified as cosmeceuticals because they offer added benefits such as teeth whitening, gum care, plaque removal and more. According to Markets and Markets, the global oral care market is worth $US24.5 billion and is expected to rise to $US35 billion by 2021.
- In a US study by Nair and Kelton Global, 50 per cent of Millennials reported that unwanted body hair impacted their confidence and self-esteem. The bikini line was the biggest bugbear (72%), followed by underarms (58%), and legs (52%). To be fuzz-free for a year – 48% would give up coffee, 44% would do without Netflix, 39% would stay celibate and 38% would wean themselves off social media.
