Elisabeth King reports on Australian retailers expecting 35 per cent rise in December sales, beauty sales surging in supermarkets and Myer stores, Soap & Glory being sold to Alliance Boots, and IPO rumours circling Net-A-Porter.
Australian retailers expecting 35% rise in December sales
The latest retailing report from IBISWorld is a shot-in-the-arm for department stores. The researcher expects a 94.1% sales lift in December, in contrast to the average expenditure over the previous 11 months of 2014.
"Department stores operate as a one-stop-shop, stocking a range of consumer goods"says Stephen Gargano, IBISWorld Senior Analyst."This holds them in good stead to benefit from an influx of time-poor consumers keen to purchase their Christmas gifts and holiday supplies in one location. With total retail spending set to jump by 35.2% in December, department stores are expected to outperform competitor categories".
Clothing, footwear and accessories are also expected to do well as Australians look to update their wardrobes at a discount. IBISWorld estimates a 66.2% rise in fashion/clothing revenues for December and a 76.7% spike for footwear and accessories -mainly due to Christmas gift spending on jewellery and watches.
iPads and gaming consoles will also produce a sales spurt for electronic goods retailers - up 56.2% says IBISWorld. Christmas parties and dining out over the festive season is expected to drive up alcohol sales by 59.4% and restaurant revenues by 24.9 per cent. While the eat-in crowd are expected to push up supermarket and grocery sales by 17.3 per cent as they entertain in the comfort of their homes.
Beauty sales surge in supermarkets and Myer stores
In the 12 months to June 2014, 25.6% of Australian women bought makeup products in the supermarket reports Roy Morgan Research - up from 20.9% in 2010. Pharmacies are also tracking well says the researcher with one in five women buying their cosmetics at the chemist - 20%.
Myer are also enjoying their highest percentage of makeup sales since 2011 - 11.8% - in contrast to David Jones where sales have remained static at 5 per cent. "Myer is attracting a higher proportion of makeup shoppers than it has for some time," says Geoffrey Smith, General Manager - Consumer Products, Roy Morgan Research. "In fact, Myer CEO Bernie Brookes recently identified cosmetics as one of the department store's strongest categories".
Sales have dipped for other retailers, though, says Roy Morgan Research. Makeup sales at Target, Big W and Kmart declined from 14.1% to 12% in the year to June 2014. Priceline sales also slipped over the same period from 15.4% to 13.6%. But we are still talking very significant market shares.
Supermarkets have, of course , been a major beauty destination for well over a decade. Woolworths and Coles have the lion's share because of their market dominance, selling private label and name brands. "Both chains stock Covergirl and Rimmel, as well as Australia's top-selling makeup brand, Maybelline," says Smith. "Coles also offers up-coming Aussie brand Nude by Nature, while Woolies has cult brand ModelCo".
Marcia Kilgore sells Soap & Glory to Alliance Boots
Most beauty entrepreneurs would count themselves lucky to sell one start-up brand to a major multinational. But Canadian-born Marcia Gilgore has just pulled off her second major sell-off. What's more she still owns a fashion footwear brand which pulls in millions.
Kilgore, based in London, founded the Bliss spa brand in 1996 and sold the company in two tranches to LVMH, the world's largest luxury goods group, for US$25 million. The final payday in 2006 allowed her to focus more strongly on FitFlop, her footwear brand which claims to offer the most comfortable walking shoes in the world, and Soap & Glory, a budget beauty line with punning names such as Glow Job.
Alliance Boots has been Soap & Glory's longtime commercial partner since its launch in 2006 and became a minor shareholder in 2011. The multinational has now bought the brand for an undisclosed figure and will accelerate growth through its new Global Brands division. Alliance Boots will preserve the brand's indie image and there's little doubt it will enter the US market through the Walgreens drugstore chain, the parent company of Alliance Boots.
IPO rumoured for Net-A-Porter
As anyone with a ghost of an interest in fashion knows, Net-A-Porter was founded by former fashion journo Natalie Massenet in 2000. Richemont, the world's biggest jewellery maker and owner of Cartier, Montblanc and Chloé, held a 33% stake in the upmarket e-commerce website before buying the remaining two-thirds in 2010 for US$341 million. According to analysts, Net-A-Porter's sales reached US$728 million in the 12 months to March 2014, with sales expected to climb to US$821 million for fiscal 2015.
With increasing competition from sites such as Mytheresa.com, recently bought by Neiman Marcus, rumours are swirling that Richemont is considering an IPO in the first six months of next year. Word is that the luxury group is already in talks with banks.
Snippets from the wires
- Nutritional beauty supplements are on a roll worldwide but sales aren't moving fast enough for two of world's multinationals - L'Oréal and Nestlé. Inneov, a supplement for improving hair and skin was launched as a joint venture in 2002, but brought in revenues of only $77.5 million in 2013. So both parties have decided to end production while "retaining the benefits of the research".
- Even though other skincare brands use the co-enzyme Q10, Nivea is synonymous with the anti-ageing active. One Nivea Q10-Plus product is sold somewhere in the world every two seconds. The Beiersdorf-owned powerhouse is launching Q10 Serum Pearls in Europe in December - its first encapsulated serum - with the innovative pearl delivery system offering the highest concentration of Q10 in the franchise. A global campaign will launch in January.
- OPI has launched a new nail bar in Auckland Airport which offers a range of colours not available at any other outlet in New Zealand.
- YSL Beaute fans with deep pockets are on alert. To celebrate the 30th anniversary of the best-selling Paris fragrance, the feted brand is offering only 10 bottles of YSL Paris L'Edition Venini. Priced at US$7455, the coveted flacons are made from handmade glass, courtesy of Venetian master glassblowers Venini. Two will be available from the flagship Galeries Lafayette and Printemps stores in Paris and the remaining eight are available to order in Dubai, the US and China.
- L'Oréal-owned Urban Decay has opened its first-ever freestanding store in Newport Beach, California. The 300 square metre space has six makeup stations, a digital video wall, UD lounge with coffee bar, an Instagram-ready photo booth and a "dude room"for waiting menfolk. Following hot on its heels, the first Urban Decay store in Europe will open in London in December.
- At 50, Rob Lowe is living proof that good looks and a youthful appearance can be maintained with the right care. The former 80s heartthrob is launching a new men's skincare range in time for the northern hemisphere Spring. In development for close to five years, it will be called Profile Performance Men's Grooming.
Carousel image: MYER Beauty
Image: MYER Fashion
