South Korea's LG buys Avon North America for US$125 million; Unilever Ventures invests in Australian skincare brand Dr Roebuck's; Aussie link to Kendall Jenner's first beauty venture; and growth in beauty sales fuels P&G's Q3 results.
South Korea's LG buys Avon North America for US$125 million
It's no secret that LG's Household & Healthcare unit has been considering more acquisitions. Back in 2014, Korea's second largest cosmetic maker after AmorePacific was rumoured to be considering a US$1 billion buyout of Elizabeth Arden. When LG announced it was no longer interested, analysts predicted that the multinational needed to seek future momentum through acquisitions.
LG had bought Everlife, Japan's third largest direct marketing company, in late 2013 for US$285 million and Canadian retailer Fruits & Passion a few months earlier. Direct-selling has beckoned again and LG has acquired Avon North America for US$125 million in cash. The Korean giant has bought the entire stake of private equity company Cerberus and the minority stake of the Avon Worldwide arm of the business.
Avon North America has 250,000 representatives in the US, Canada and Puerto Rico and brings award-winning franchises such as ANEW skincare, True Color cosmetics, Espira and Skin So Soft to the LG stable. In a win-win exchange, Avon North America accesses LG's world-class R&D expertise across cosmetics, personal care, fragrance, packaging and design.
Unilever Ventures invests in Australian skincare brand Dr Roebuck's
Dr Roebuck's was founded by sisters Zoe and Kim Roebuck in 2016. An homage to their physician parents, who developed an Australian-inspired cream to treat eczema and dry, sensitive skin, the brand has gone from cult secret to global hit. Dr Roebuck's launched into Sephora Europe and Southeast Asia earlier this month, adding a further 20 countries to its global reach. It is now sold in 2000 doors and online around the world through strategic partnerships with Sephora, Cult Beauty, Space NK and Shoppers Drug Mart, which operates more than 1300 stores in Canada.
The brand's results-driven lineup includes Noosa nourishing creme cleanser, No Worries hydrating face moisturiser and Daintree AHA brightening mask and many SKUs feature sustainably-sourced Australian native ingredients. Dr Roebuck's has closed a financing round with Unilever Ventures, the investment and private equity arm of the multinational. The new injection of capital will accelerate the brand's worldwide footprint, product innovation and R&D.
According to Rachel Harris, investment director at Unilever Ventures: "Dr Roebuck's appealed to us because it is a brand that really lives and breathes clean beauty and its Australian lifestyle roots. We look forward to help further drive Dr Roebuck's international growth plans".
Aussie link to Kendall Jenner's first beauty venture
Brand incubator Beach House Group was co-founded by Lance Kalish, one of the brains behind the phenomenally successful Yes To skincare company. Yes To has extended from the original Yes To Carrots line to 10 collections, including the trendy Yes To Charcoal and Yes To Miracle Oil. Now a global leader in natural beauty products, Yes To is sold in 27,000 locations worldwide.
Kalish rightly bills himself as a serial entrepreneur and is well-known to Australian media and retailers. The longtime Sydney resident teamed with Shaun Neff, the US founder of Neff Headwear, who turned US$1 beanies into a global lifestyle brand selling in 45 countries, to launch Beach House. The company now offers more than 1000 products across a dozen categories, including beauty and personal care, homewares, stationery and pet food. Neff is behind the latest addition to the Beach House portfolio – a new oral care range called Moon, co-created with Kendall Jenner.
The supermodel and celebrity's first venture into beauty, the Moon brand will launch in Ulta stores in the US through May. Priced from US$3.99 to US$19.99 there are seven SKUs in the lineup, including the Kendall Jenner Teeth Whitening Pen, Clean Slide Gloss and Activated Charcoal Whitening Toothpaste. Analysts expect sales of between US$30 million and US$35 million in the first 12 months.
Growth in beauty sales fuels P&G's Q3 results
P&G is the world's number one manufacturer of personal care goods and over 50 per cent of its global sales come from outside the US. The titan has reported net sales of US$16.5 billion for Q3 2019 – a 1 per cent increase over the same period last year. The beauty business saw a 9 per cent rise in organic sales due to the increased growth of prestige skincare brand SK-II and higher pricing within the Olay franchise. Sales of haircare from power brands such as Pantene jumped in mid-single digits.
As Gillette continues to battle competition from startups like Unilever's Dollar Shave Club, P&G's grooming sales decreased by 1 per cent. The multinational claimed that a strong US dollar impacted sales of its grooming lines and brands, but the top brass was upbeat about overall results. "We delivered another quarter of strong organic sales growth, enabling us to further increase our outlook for the year", said David Taylor, President & CEO.
Snippets from the Wires
- The Marc Jacobs fragrance licence has been a goldmine for Coty for over 16 years. The Daisy franchise is over a decade old, but remains one of the fastest-growing fragrances in the US, achieving top 10 status in 2018. The two companies have announced the renewal of the highly lucrative partnership.
- Interparfums has reported a 55 per cent increase in US sales for the first quarter of the calendar year. Overall global sales reached US$178.2 million – up from US$171.8 million for the same period in 2018. The standout performers for the perfume maker in the US market were the Guess, Oscar de la Renta and Anna Sui brands. Across the Pond, Montblanc and Jimmy Choo excelled. Later this year, Interparfums will release its first fragrances from Lily Aldridge and Graff Diamonds.
- Vegan beauty is a fast-growing category and it's not hard to see why. According to the latest report from Roy Morgan Research, nearly 2.5 million Australians (12.1 per cent of the population) now claim to be fully vegetarian. The two demographics most committed to a meat-free diet, says the researcher, are Metrotechs (young, highly educated, socially aware, culturally diverse) and Aspirationals (ambitious, up-and-coming families). The two communities account for 31 per cent of vegetarians in Australia.
