Urban Decay to discontinue Naked Palette; Korean giant Lotte to buy JR/Duty Free in Australia and New Zealand; Scentre Group (Westfield) half year profit reaches AUD$1.46 billion; Coty's full year revenues increase 22.8 per cent.
Urban Decay to discontinue Naked Palette
Makeup palettes first surfaced in the 1970s. But today's mega-success of the format is widely credited to Urban Decay's Naked Palette, a 12 shade mix of matte and sparkling gold, plum, mauve and chocolate eyeshadows. Launched in 2010, over 30 million of the goof-proof neutrals have been sold worldwide. L'Oréal bought the Urban Decay brand in 2012 and over the past eight years its hero product has racked up US$1 billion in sales.
Urban Decay's Naked and Naked 2 palettes became the top two selling makeup sets in the US and spawned an army of knock-offs that is still expanding. But in the ultimate "get out while you're on top" move, Urban Decay has announced it is discontinuing the global bestseller. The brand even made a YouTube video starring Nicole Ritchie and leading beauty influencers in a fake wake. Under the tagline – Gone But Never Forgotten – Ritchie mournfully declares – "Everyone has tried to copy you, but no one has been able to capture your true essence".
Not quite. Most industry analysts are laying the blame for Naked's demise at the door of innumerable dupes – many selling for well under $20. The last word goes to Wende Zomnir, one of the founders of Urban Decay: "Saying goodbye to Naked is extremely bittersweet. It was a big moment in our history. It's a little painful to leave your past behind, but it's also essential to always evolve. I will forever miss Naked, but we plan to turn the grief into even more greatness. Urban Decay will continue to thrive in Naked's memory and honour – just wait and see".
Korean giant Lotte to buy JR/Duty Free in Australia and New Zealand
The Lotte Group is one of South Korea's top five business conglomerates and its duty free division is one of the heavyweights of global travel retail. Lotte Duty Free has signed a contract to buy JR/Duty Free in Australia and New Zealand, which operates in Brisbane, Melbourne, Darwin and Canberra airports.
Lotte is the first Asian travel retail titan to show interest in the Australian duty free market which enjoyed reported sales of US$1.2 billion last year. But international operators such as Gebr. Heinemann, Dufry, DFS and Aelia Duty Free have all entered the Australian market because of double digit growth in passenger arrivals from Asia, notably China.
The move is part of Lotte Duty Free's goal to become the world number one in global travel retail by 2023. The company reported total sales of US$2.4 billion in the first half of 2018 as overseas sales jumped 60 per cent year-on-year.
Scentre Group (Westfield) half year profit reaches AUD$1.46 billion
Scentre Group is the owner and manager of 39 Westfield shopping centres in Australia and New Zealand and continues to fly the flag for Australian retail. With total group assets of $31.6 billion and $52.8 billion in assets under management, Scentre Group has announced a statutory net profit of $1.46 billion for the first six months of the year.
Notable highlights include the $80 million redevelopment of Westfield Plenty Valley in Melbourne, adding more than 100,000 square metres of space, and the acquisition of 50 per cent of Westfield Eastgardens in Sydney for $720 million. CEO Peter Allen also singled out the redevelopment of Westfield Newmarket in New Zealand, which will be the location of the first David Jones store in Auckland. Scentre Group has also pushed forward its plans for $1.8 billion in other redevelopments, including Westfield Carousel in Perth and Westfield Kotara in Newcastle.
Scentre Group has continued to bring our purpose to life by creating extraordinary places, connecting and enriching communities and providing the best locations for retailers to connect with customers, noted Allen. Last week, Scentre Group also lodged revised plans for a 42-storey office development above Westfield Parramatta, one of the strongest performing properties in its portfolio. The company is also on track to operate all of the retail component of the landmark Sydney harbourside project, Barangaroo Central.
Coty's full year revenues increase 22.8 per cent
Coty has announced a US$250 million cost-saving program following mixed results for the full year ending in June. Like-for-like sales only edged up 0.4 per cent but reported revenues increased 22.8 per cent to US$9.398 billion. Strong momentum in travel retail and the multinational's luxury division were the major growth drivers, says Coty CEO Camillo Pane.
The net revenues for the luxury division rose 25.1 per cent over the period to US$3.21 billion. Gucci Bloom and Tiffany fragrances delivered powerhouse performances, as did the Chloe Nomade and Marc Jacobs Daisy Love scents. Understandably, given the recent launches of new products from Burberry Beauty in Australia and overseas, Coty is very excited about the future prospects of the designer brand it took over late last year.
Net revenues for Coty Consumer Beauty, the company's largest division, also saw an impressive increase of 15.7 per cent to US$4.268 billion. A recovery from the negative minus-10 per cent result for fiscal 2017. Coty is still hoping for more gains over the next 12 months and has a strong launch program in place to offset declines in the mass beauty market in Europe and North America, competition from specialist beauty retailers such as Sephora and Ulta and e-commerce.
The OPI nail brand and Wella Professionals helped to springboard growth of 37.5 per cent for Coty's professional division, lifting net revenues to US$1.919 billion. Overall, Europe was the largest regional market for Coty with net revenues jumping 26 per cent to US$4.201 billion. North America rose 18 per cent to US$2.2966 billion. ALMEA, covering Asia, Latin America, the Middle East, Africa and Australasia, was strongly fuelled by luxury and professional sales. Net revenues for the region spiked 23 per cent to US$2.23 billion.
Snippets from the Wires
- Westfield Doncaster in Melbourne, affectionately known as Donny, is upping its beauty cred. In September, Sephora will open its 16th Australian store to field four outposts in the Victorian capital, alongside Chadstone, Melbourne Central and Highpoint Shopping Centre. Innisfree, the Korean brand owned by AmorePacific, will also open its second store in Melbourne at Doncaster over the next couple of months.
- A surge in Asian tourists has boosted Auckland Airport's retail revenues for the fiscal year 2017/2018 to US$127.3 million. Sales of cosmetics and skincare rose 13 per cent over the period as New Zealand's main gateway enjoyed significant increases in passenger numbers from China (+10.5%), Hong Kong (+14.1%), Japan (+11.7&) and Thailand (+26.8%).
- Elemis could be the next skincare company on the block. Owned by L Catterton, the investment arm of LVMH, the prestige British brand is reportedly putting out acquisition feelers through leading investment multinational, the Jefferies Group.
- The UK is a key export destination for Australian skincare brands. According to Mintel, sales of facial skincare products in the UK are projected to reach US$1.5 billion by the end of the year. Over the next five years, facial skincare sales are expected to climb to US$1.73 billion, says the data tracker.
