L Catterton-backed Intercos enters US$388 million financing agreement; L'Oréal Paris to debut 100 SKU Age Perfect Makeup Collection for the over-50s; November retail sales surge on back of Black Friday Bonanza; and refillables: Hermès and L'Occitane tap into the growing trend.
L Catterton-Backed Intercos enters US$388 million financing agreement
Some of the world's most influential beauty players intentionally keep low public profiles. Intercos is one of the most dynamic "Made in Italy" contract cosmetic companies and develops, manufactures and distributes colour cosmetics and skincare for some of the biggest names in the business, including Lancôme and Procter & Gamble. With revenues of US$767.5 million in 2018, the company has seven research centres, 12 production sites and 11 marketing offices in Asia, Europe, the US and South America.
In 2014, Catterton, the leading US private equity firm, took a 43 per cent stake in Intercos, reducing its share to 34 per cent with a sell-off to the Ontario Teachers Pension Fund three years later. LVMH, the world's leading luxury goods company, and Groupe Arnault, the family company of Bernard Arnault, the conglomerate's Chairman and the richest person in the world, merged with Catterton to become L Catterton in 2016. L Catterton is the largest consumer-focused private equity firm in the world with assets of US$15 billion.
When Catterton invested in Intercos, the main strategy was to accelerate the development pipeline and further expansion in the US and China. Intercos has secured a new financing agreement worth US$388 million from six European banks, including BNP Paribas. The company pulled back from an IPO in 2014, but analysts believe the move could be on the cards again following this financial injection. Intercos has also recently inked a deal with Shinsegae, the largest retailer in South Korea, to make cosmetics and skincare for the Asian market, including China.
L'Oréal Paris to debut 100 SKU Age Perfect Makeup Collection for the over-50s
Few beauty companies have championed the concept of ageless beauty for as long as L'Oréal. Older spokesmodels for the multinational's stable of brands have included Helen Mirren, Andie MacDowell and Viola Davis. But over the past decade, many brands have been so busy chasing Millennials and Gen Zers that they have dropped the ball when it comes to reaching out to longterm customers and offering new solutions to anti-ageing, especially in the colour cosmetics category.
Over the next few weeks, L'Oréal Paris will debut Age Perfect Cosmetics – starting in the US. The range is the brand's first complete and most extensive range for women aged 50-plus and boasts 100 SKUs. Each product is designed with the specific needs of Gen Xers and Baby Boomers in mind and is inclusive of diversity with 30 shades of foundation.
According to Dr Rocio Rivera, Vice-President of Scientific Communications for L'Oréal Paris USA: " Despite losing penetration in the category, the over 50 consumer is less likely to say (versus Millennials) that she doesn't want to apply makeup. It is a key part of her life and her routine and we are proud to offer a new range just for her. She stopped using makeup because she cannot find the products for her, she does not feel represented or she feels as if the makeup offered to her does no justice to her skin".
Standouts of the new L'Oréal Age Perfect Cosmetics lineup include Radiant Serum Foundation, Luminous Hydrating Lipstick, Anti-Feather Lip Liner and Brow Magnifying Pencil.
November retail sales surge on back of Black Friday Bonanza
The nation's retail sales spend for October was disappointing. But consumers could have been waiting for the huge discounts offered on Black Friday, Cyber Monday and Singles' Day. Data from the Australian Bureau of Statistics (ABS) showed annual retail sales growth jumped 3.25 per cent in November.
Another trend gaining ground is that the mega online sales events are also benefiting bricks and mortar stores as they join in the fray with their own deals coinciding with the major e-commerce events, says Russell Zimmerman, Executive Director of the Australian Retailers Association (ARA). "Online retailing, which covers these events, actually fell back to some extent in November; this tells us that what were originally online sales are now actively bolstering sales for traditional retailers", he notes.
November also saw a strong turnaround in the clothing, footwear and personal accessories category – up 4.9 per cent. Department stores also experienced a rise in sales of 4.4 per cent. While Other Retail, including pharmaceuticals, cosmetics, toiletries, newspapers and books, flatlined with a dip of 0.5 per cent.
Refillables: Hermès and L'Occitane tap into the growing trend
The use of refillable containers in cosmetics is a complex issue. Yes, the trend is more environmentally sound. On the other hand, it's also a good marketing tool for brands to gain repeat purchases. Human nature is always the wild card as well. The zero and reduced waste approach has a logical appeal, but consumers are still concerned about hygiene when it comes to refillables. Packaging is also one of the most competititve industries in the world because it is critical in encouraging and persuading consumers to buy a product.
Hermès is entering the beauty market through select retailers in March. The first product from the prestige French house is a refillable lipstick called Rouge Hermès. The range will be available in 24 colours linked to Hermès' legendary archive of 900 leather shades and 75,000 silk swatches of scarves. The initial purchase will cost US$67, with refills retailing for US$42. There will be two textures – matte and satin – and the lipsticks will be lightly scented with a fragrance from Hermès perfumer, Christine Nagel.
L'Occitane is increasing its refillable efforts. The premium French brand already offers eco-refills for certain products, but is trialling the fountain approach pioneered by Thierry Mugler with the best-selling Angel fragrance. To reduce its plastic footprint further, L'Occitane has installed three in-store "fountains" in France, Germany and Spain for three of its shower gels – Verveine Classique, Verveine Karite and Verveine Agumes. "We chose popular products, for which we know consumers would come back in store asking for more", says Corinne Fugier-Garrel, Packaging Concept Development Director for L'Occitane.
Snippets from the Wires
- Smartphones springboarded 84 per cent of e-commerce growth over the holiday season in the US, reports Adobe's Holiday 2019 Recap Report. Online spending during November and December reached US$142.5 billion – a 13.1 per cent surge over the same period in 2018 – with Americans spending US$50 billion through smartphones.
- Australians are still major carnivores, reports Roy Morgan Research, spending $13 billion a year on fresh meat. The Woolworths Group has the largest market share at 27.5 per cent, followed by Coles at 22.6 per cent and Aldi at 10.6 per cent. Specialist butchers still account for 20.9 per cent of the fresh meat market, but their market share is in longterm decline, says the researcher.
- Walgreens Boots Alliance sparked global headlines in November when the global titan in drugstore retail was reported to be exploring the possibility of a US$70 billion take-private deal. Little more has been said about the biggest private equity buyout ever. The multinational has released its Q1 2020 results with sales reaching US$34.3 billion – an increase of 1.6 per cent. Net earnings fell 24.8 per cent and the company's shares fell 6 per cent on the news.
