Dec 11, 2017: Elisabeth King reports on this week's business news

Walgreens Boots Alliance invests $US416 million in China's leading pharmacy chain; Ariana Grande exceeds $US150 million in global fragrance sales; 30 per cent of Australians check out catalogues when buying cosmetics, says Roy Morgan; and Estée Lauder signs extension deal for Donna Karan Fragrances.

Walgreens Boots Alliance invests $US416 million in China's leading pharmacy chain
Walgreens Boots Alliance last push into Asia was a franchise deal with Emart, South Korea's largest retailer, to open Boots-branded stores across the country. But China is even more of a potential goldmine for the world's first global pharmacy-led, health and well-being multinational. The company has signed an agreement to acquire a 40 per cent stake in GuoDa Drugstores Co for $US416 million. 

Walgreens Boots Alliance has had a presence in China for the past 10 years, but the new strategy is a different ball game altogether. GuoDa is the retail pharmacy arm of the state-owned China National Pharmaceutical Group, which operates 3500 pharmacies in 70 cities. 

Leading Australian players such as Chemist Warehouse, which broke its previous record of $17 million in sales within seven hours via Tmall during this year's Singles Day, have been major beneficiaries of  galloping growth in the Chinese pharmacy sector. According to Stefano Pessina, CEO of Walgreens Boots Alliance: " GuoDa is China's leading pharmacy chain and we believe that we can positively contribute to its continuous successful development with our global pharmacy expertise". 

Ariana Grande exceeds $US150 million in global fragrance sales
Escentials Brands, the Australian distributor of Ariana Grande's fragrances, are expecting the triple platinum artist's latest fragrance – Moonlight – to be a blockbuster over the festive season. Over the past two years, 220,000 units of Ariana Grande fragrances have been sold in Australia. Her first fragrance, Ari, debuted in 2015 and achieved the number one fragrance ranking in Priceline. A year later, the follow-up scent Sweet Like Candy scored 80 per cent of the debut fragrance's sales. 

The rest of the world loves Ariana as well, reveals Luxe Brands. Her first four fragrances, including Moonlight, have exceeded $US150 million in global retail sales. The Ariana Grande fragrance business continues to defy the trajectory of celebrity fragrances, says Joel B. Ronkin, CEO of Luxe Brands. "With Ariana's undeniable status as an international superstar, the success of the Ariana Grande fragrance portfolio is certain to continue to reach new heights". 

30 per cent of Australians check out catalogues when buying cosmetics, says Roy Morgan
The Internet leads by a country mile when Aussies go looking for purchase-related information, reveals Roy Morgan. But print publications retain a lot of influence on sales, says the researcher. According to a new report, 56 per cent of Australians check out catalogues when looking for information on products and services, 41 per cent look to newspapers and 30 per cent trawl through magazines on the path to purchase. 

Traditional channels for engaging customers still have a powerful impact, notes Michele Levine, CEO Roy Morgan. "Catalogues are rated highly by consumers for information about selecting children's wear (33%), purchasing toys (32%), purchasing cosmetics and toiletries (30%), purchasing small electrical appliances (29%) and purchasing large kitchen/laundry appliances (25%). Many consumers turn to magazines for information on home improvements and renovations, home interiors and furnishings and health and fitness products". 

Estée Lauder signs extension deal for Donna Karan Fragrances
The designer may have exited her eponymous Donna Karan and DKNY brands in 2015, but her legacy is powerful. In December 2016, LVMH, the world's largest luxury goods group, sold the two luxe brands to G-III Apparel for $US650 million. Estée Lauder has been the licensee for Donna Karan and DKNY fragrances for over 20 years and the multinational's Aramis & Designer fragrances division has just negotiated a multi-year license extension with the new owner. 

Fragrances have long been a key category for the Donna Karan licensing portfolio. The iconic Cashmere Mist is a routine inclusion in the annual rankings of the top-selling fragrances in the US and the DKNY Be Delicious franchise is an on-going global hit. The fashions also have a major fan base, accounting for sales of  $US88 million in net sales for Q3. 

G-III reported a net sales rise of 16 per cent to $US1.02 billion for the third quarter. The company also holds the fashion licenses for Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole and Cole Haan, in addition to a lucrative team sports business. 

Snippets from the wires

  • The Schwarz Group is the fourth largest retailer in the world. The German multinational owns Kaufland and Lidl supermarkets, both slated to launch in Australia. Lidl has become very popular in the UK and has launched a new range of eight fragrances called Aura by Suddenly, with several mimicking prestige bestsellers such as Lancôme La Vie est Belle.
  • YouCam Makeup is the world's leading AR beauty app with more than 2.3 million five star reviews on Google Play. Parent company Perfect Corp has been awarded Google Play's Best of 2017 award for Most Innovative App.
  • More and more beauty and cosmetic brands are hitching their star to vegan claims. In a first for a L'Oréal-owned brand, Garnier is launching Aloe Water Jelly as the multinational's first vegan product in early 2018. A day moisturiser, the formula is 96 per cent naturally-derived.
  • Men like to light up, too, reveals a US online candle review site. According to the National Candle Association, males accounted for 10 per cent of total candle sales in the US this year.