Elisabeth King reports on media interns winning a major payout, Estée Lauder relying on super-premium skincare to reach target, Jurlique going for gold in China, and too many selfies now a mental disorder

Media interns win a US$6.4 million payout

As we reported in June last year, US District Judge William Pauley's decision that Twenty-First Century Fox Inc's Searchlight Pictures should have paid two interns who worked on the Oscar-winning movie Black Swan opened the floodgates. The test case triggered dozens of lawsuits in the US, where the laws prohibiting interns being used as entry-level workers without payment are the same as in Australia. Major media companies such as Hearst, Condé Nast and the Warner Music Group were among the first in the legal firing line.

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Condé Nast stopped its internship program last October and finalised an undisclosed payout three weeks ago. Now media and entertainment giant, NBCUniversal, who produce the long-running global smash Saturday Night Live, have agreed to pay US$6.4 million to thousands of interns who filed a class action suit. A less expensive strategy than facing a court which would have probably awarded a higher amount. The decision not to pay interns by a company earning US$23.5 billion in annual revenues could easily be construed as wilful.

In his landmark summing-up of the Searchlight Pictures case, Judge Pauley observed that on-the-job experience, the chance to build resumes and obtain references does not negate the fact that interns should be paid because employers are "primary beneficiaries" of their work. Outten & Gold, the Manhattan law firm who fought the NBC Universal case, has carved out a reputation for fighting intern class actions, including those against Condé Nast, Hearst and ICM, the literary and talent agency. Under the legend - Entry level jobs are disappearing. Fight back against unpaid internships - the Park Avenue legal team run a specialised website - www.unpaidinternlawsuit.com

Estée Lauder relies on super-premium skincare to reach US$11 billion target

On November 2nd, 's () Re-Nutriv Ultimate Diamond Sculpting/Refinishing Dual Infusion hits counters worldwide, including Australia. The high-priced anti-ageing serum - $450 - should deliver the goal Lauder is a whisker away from reaching - US$11 billion in sales over the next year. It won't take much. The world's leading prestige-only beauty player - number four after L'Oréal Paris, Unilever and P&G - reported sales of US$10.97 billion at the end of the fiscal year in June - a lift of 8 per cent.

Skincare leads the pack for the Estée Lauder Group with global sales of US$4.76 billion in the year to June 2014, in contrast to makeup revenues of US$4.21 billion. Apart from the impressive figures, the most interesting aspect of Lauder's surge is that the group have achieved such spectacular results by channelling more resources into fewer products.

(), for example, has slashed its new product offerings over the past two years to focus on more targeted products such as Smart Custom-Repair Serum. So has the core Lauder brand with a re-jig of its global cult product - Advanced Night Repair Synchronized Recovery Complex II.

According to Euromonitor analyst, Rob Walker: "In a global beauty care market where there is intense pressure to bring new products to market, it seems counter-intuitive to cull new offerings. Yet, by so doing Estée Lauder has freed up substantially more cash to spend on its prestige portfolio. We should expect to see Estée Lauder-owned brands grow in visibility across the myriad of small to mid-sized cities of China, emerging Asia and Latin Amrica over the next five years".

All regions where the appetite for prestige skincare shows no sign of slowing down. It's worth noting that Estée Lauder makes higher margins on skincare - 16% - than its overall business - 11% - so chasing the premium skincare market not only beefs up the multinational's bottom line but also its share price.

Jurlique goes for gold in China

China's economy may be slowing but the nation's lust for cosmetics is still raging at a double-digit clip. Jumei is China's number one beauty e-tailer with net revenues of US$483 million last year, reports Frost & Sullivan. Founded only four years ago, 30 year old CEO Leo Chen launched an IPO on the New York Stock Exchange in May to become one of China's youngest Internet billionaires.

Jumei's successful strategy of appealing to China's increasingly affluent young women rests on focusing on vertical makeup and skincare brands such as , Estée Lauder and (). In marketing speak, a vertical brand focuses on concentrating on a truly great product or market. In a major coup, Jumei has entered an agreement to sell 38 products embellished with anti-counterfeit tracking codes. The online colossus views the partnership as another milestone in its efforts to lift product quality standards not only for its own rapidly expanding business, but for the overall Chinese beauty market.

In a separate deal, Jumei has also become the exclusive online partner for Givenchy Cosmetics in China. The gorgeous range which debuted to Australian media at the recent Sephora showing in Sydney.

Taking too many selfies? - It's officially a mental disorder

Anyone who owns a smartphone is "love bombed" by a deluge of selfies and Instagram heaves with me, me, me snaps. Watch out, though, if you are a repeat offender. The American Psychiatric Association (APA) has officially designated "Selfitis" as a mental disorder.

Going further, the APA has defined the obsessive/compulsive desire to take selfies and post them on social media as a cry for help to make up for low self-esteem and a lack of intimacy. A similar diagnosis to - no surprise - narcissism.

Before getting too worried, there are three levels of the disorder and it might not be too late to change. There is currently no prescribed treatment beyond recognising the syndrome, says the APA, but temporary relief is available through cognitive behavioural therapy.

  • Borderline Selfitis - Taking selfies at least three times a day but NOT posting them on Twitter, Facebook or Instagram.
  • Acute Selfitis - Taking three shots or more AND posting them on social media.
  • Chronic Selfitis - An uncontrollable urge to take selfies around the clock and posting them on one or more social media sites more than 6 times a day.

Snippets from the wires

  • Kim Jong-Un is even more generous to North Korea's power elite than his late father. According to Chinese Customs data, the secretive Asian country imported US$644.3 million worth of cosmetics, liquor, watches, jewellery and carpets in 2013. Under Kim Jong-Il, annual imports of luxury goods were less than half that amount - approximately US$300 million.
  • Unilever's global sales rose 2.1% in the thid quarter of the year. Personal care sales spiked 3% to US$5.7 billion, led by , , and .
  • Inter Parfums is riding high with net sales in the three months to September 30th increasing 6% to US$134.2 million. sales rose 23% with the introduction of the brand's first male scent - Jimmy Choo MAN. Male scents also spurred a 10% rise in sales. Agent Provocateur's new juices - Fatale and Fatale Pink - which were recently launched to Australian media have already gone gangbusters in the US.
  • Not so long ago luxury spas out-did themselves in spruiking niche skincare products familiar only to the fashion-forward. Increasingly, well-known prestige skincare brands are proving to be a bigger lure to affluent travellers. La Mer products are used in the Vendome Spa in the Park Hyatt in Paris. has followed suit by opening its first hotel boutique in the Grand Resort Bad Ragaz in Switzerland - a bastion of Europe's old money crowd.

 

20 October 2014 - Elisabeth King reports on Estée Lauder's purchase of Le Labo, BYS Cosmetics' expansion, department stores on the comeback trail, and IT Cosmetics winning six QVC Beauty Awards

13 October 2014 - Elisabeth King reports on the Chanel and Coty hook-up, the success of the global spa and wellness industry, a legendary perfume marketer triumphing again, and the beauty20 consumer awards tapping top online brands

6 October 2014 - Elisabeth King reports on Monaco "royals" scoring major beauty contracts, L’Oréal teams up with Puma, Puig sells Payot to French equity firm, and Australians rank number 4 in the world for online media engagement