Revlon exploring strategic alternatives with Goldman Sachs; parent company of Aesop and The Body Shop posts strong Q2 results; Japanese brewer Kirin buys stake in pioneering skincare company for US$1.2 billion; and Shiseido's travel retail sales climb to US$504 million in first half.
Revlon exploring strategic alternatives with Goldman Sachs
Declines in the Portfolio and Fragrances sectors in Q2 prompted a 3.3 per cent drop in overall sales for Revlon in Q2 to US 570.2 million. Elizabeth Arden, acquired in 2016 for US$419 million, remained the sole bright spot. According to Bloomberg, the beauty icon has hired financial advisers, the Goldman Sachs Group, to explore strategic alternatives, including the potential sale of parts or all of the business.
Revlon has 15 brands in its stable and is sold in 150 countries, but the core brand has struggled in the US market. The company has more than US$3 billion in debt on its balance sheet, the majority of which is due next year. A final decision has not been reached, but Revlon is exploring all avenues with the assistance of Goldman Sachs.
Parent company of Aesop and The Body Shop posts strong Q2 results
The Brazilian giant, Natura & Co, was electrified by the acquisition of Avon's global business in May. The buyout made the parent company of Aesop and The Body Shop the world's fourth largest pure play beauty group. The multinational has reported a sizzling performance for Q2 with sales reaching US$3.4 billion – up 9.8 per cent compared to the same period last year.
All of Natura's divisions experienced strong upticks in the second quarter. The company's own brand revenues spiked 9.4 per cent to US$2.25 billion. The Body Shop enjoyed a 7.5 per cent increase to US$867 million. While revenues for Aesop surged 20.7 per cent to US$284.3 million.
Natura's goal of becoming a truly global, multichannel and multi-brand powerhouse was also much in evidence in the company's results for the first six months of the year. Own brand sales reached US$4 billion – a 7.2 per cent jump on first half 2018 sales. Revenues at The Body Shop rose 8.8 per cent to US$1.75 million. Aesop's galloping growth of 26.9 per cent saw sales rise to US$554 million.
Japanese brewer Kirin buys stake in pioneering skincare company for US$1.2 billion
Kirin, Japan's second largest brewer, transformed the Australian alcoholic beverages landscape in 2009 when it took a 100 per cent stake in Lion, the liquor giant which produces household name beer brands such as Tooheys and New Zealand's Steinlager. There could also be a major shakeup in the skincare and supplements business in the offing. Kirin has acquired a 30.3 per cent stake in Fancl, the Japanese skincare, makeup and healthcare supplements company, for US$1.2 billion.
Founded by Kenji Ikemori in 1982, Fancl was a pioneer in developing "No Preservative" skincare. The brand was one of the first companies in the world to stop using parabens, sterilisers and petroleum surfactants and its Mild Cleansing Oil is the number one makeup remover in Japan. Skincare products are packaged in vials and small bottles to ensure maximum freshness and Fancl has become a big hit throughout Asia and in travel retail with global sales of US$1.16 billion.
Kirin plans to enter the health foods, drinks and supplements market in partnership with Fancl and has a target of US$1 billion in sales in the category by 2027. The two companies will also undertake joint research on skincare and wellness issues from adult onset diabetes to improving the gastrointestinal biome. There are no plans to mix health and beauty supplements with alcohol, as competitor Suntory did in 2015 with the launch of a collagen-infused beer.
Shiseido's travel retail sales climb to US$504 million in first half
J Beauty leader, Shiseido, broke the US$500 million milestone in travel retail sales in the first half of the year. The record performance – 17.3 per cent growth – catapulted revenues to US$504 million and made the channel the multinational's fourth largest earner after Japan, China and The Americas.
Shiseido's overall revenues for the first six months of the year increased to US$5.15 billion. Sales in China soared 15.9 per cent across all prestige brands, including Cle de Peau, IPSA and NARS. Japan remains the titan's biggest market with 41.1 per cent of net sales. But rapid growth in cross-border online sales and in-store has propelled revenues in Mainland China to 19.6 per cent of the company's sales, followed by the Americas (11.3%), travel retail (9.4%), Europe, the Middle East and Africa (EMEA; 8.5%) and the rest of Asia Pacific (6.4%).
Snippets from the Wires
- Ariana Grande has pulled in more than US$150 million from her fragrance franchise over the past three years. The pop diva has filed a trademark for a beauty collection called Thank U Next, including body lotions, scrubs and mists. Her latest fruit/floral fragrance – Thank U, Next – debuts in Ulta Beauty in the US this week before rolling out nationwide on September 1. In Australia, the fragrance will launch exclusively online on September 1 at ChemistWarehouse.com.au, MyBeautySpot.com.au and MyChemist.com.au and in-store through Chemist Warehouse on September 26.
- Bloomberg's 2019 annual list of the world's richest families is again topped by the Waltons of Walmart fame. Three fashion and beauty dynasties make the 25-strong list. The Wertheimer family who own Chanel placed 5th with a fortune of US$57.6 billion, followed by the Dumas clan of Hermes in 6th place with a net worth of US$53.1 billion. The Lauder family of Estée Lauder clinched 23rd position with a net worth of US$32.3 billion.
