Revlon eyes top 10 ranking, Hyatt buys Miraval Wellness and Spa Group, seismic shifts in multibillion-dollar global eyewear market, and loyalty programs keep Aussies and Kiwis faithful.
Revlon eyes top 10 ranking and $US5 billion in sales
Last year's acquisition of Elizabeth Arden by Revlon took the financial world by surprise. Most analysts were expecting an announcement that the heritage colour cosmetics company itself was the target of a buyout. CEO Fabian Garcia has informed employees of the combined company, which generates $US3 billion in global sales, that the future looks very bright indeed. By restructuring and rejuvenating its core brands, Revlon Inc. is aiming for $US5 billion in worldwide sales within the next five years to become a top 10 global beauty brand.
Under the new directive, there will be four global brand teams – Revlon, Elizabeth Arden, Fragrances and Portfolio Brands, including Almay. In addition, Revlon has inaugurated a new “consumer-facing regional structure" comprising five major geographies – North America, Latin America, Europe, the Middle East and Africa and Asia/Pacific, including Australia and New Zealand. At the moment, North America accounts for 60 per cent of revenues, but the major focus for growth will be China, South Korea, Japan and Taiwan.
Taking a swipe at acquisition mania in the global cosmetic industry, Garcia says that instead of paying outrageous valuations for new brands, Revlon will spend its money rebuilding and revitalising its iconic brands.
Hyatt buys Miraval Wellness and Spa Group for $US215 million
Hyatt is already a key player in the $US420 billion global wellness-tourism category. Three years ago, the hospitality multinational with $US4.4 billion in annual revenues launched a global holistic health and wellness strategy, hinging on sustainably sourced food and increased fitness and spa services. The acquisition of the Miraval Group, a renowned provider of wellness and mindfulness experiences, for $US215 million from KSL Capital Partners is core to Hyatt's global expansion, says CEO Mark Hoplamazian.
Miraval's flagship property in Arizona has been one of America's benchmark wellness resorts for more than 20 years. In addition to the buyout price, Hyatt will invest a further $US160 million by 2020 to expand the original Arizona Resort & Spa. The company will also redevelop the recently acquired Trevaasa Resort in Texas and complete the acquisition of the Cranwell Spa & Golf Resort in Massachusetts. The Miraval Life in Balance spa brand, which opened its first location in California last year, was also part of the deal.
Adding Miraval to the Hyatt family creates a great opportunity to advance the brand's expansion while building a greater depth of expertise in wellness and mindfulness, says Hoplamazian. “We know that wellness is an area that is becoming increasingly important to our guests and we share Miraval's belief that wellness is more than fitness and nutrition – it's a lifestyle."
Seismic shifts in multibillion-dollar global eyewear market
Sunglasses are a major beauty accessory. When a woman is wearing designer shades, it's difficult to tell whether she is in her late 20s or early 40s. The global eyewear market was valued at $US100 billion in 2015, according to Grand View Research. A figure expected to keep on growing not only because of the anti-ageing effect of sunnies, but also because of increasing awareness about eye care as the median age in most developed countries and China continues to rise.
In the industry's largest-ever deal, Italy's Luxottica and France's Essilor have agreed to a $US49 billion merger deal. The companies’ combined revenues in 2015 totaled $AU22.57 billion. Designer Giorgio Armani owns a 5 per cent stake in Luxottica, but the HQ of the new group will be in Paris. Luxottica produces eyewear for major names such as Bulgari, Chanel, Ralph Lauren, Oakley and Ray-Ban. Essilor is the world's leading manufacturer of ophthalmic lenses.
LVMH is reported to be in the final stages of acquiring a 10 per cent stake in Marcolin, another leading Italian eyewear maker, which manufactures glasses for its Emilio Pucci brand. The shares of Safilo, which holds the eyewear licenses for other major LVMH brands such as Dior, Celine, Fendi and Givenchy, dipped sharply on the rumours. The stake sale will give Marcolin a market value of up to $US531 million because of the company's ability to acquire all of LVMH's eyewear licenses.
Loyalty programs keep Aussies and Kiwis faithful
Twitter killed its “Buy Now" button last week. Little wonder according to Nielsen's Global Loyalty Sentiment Survey. All factors being equal, 56 per cent of Australians and 57 per cent of New Zealanders prefer to buy from retailers with loyalty programs. A good loyalty program can also prompt more visits and increased purchases. Sixty-one per cent of Kiwis and 59 per cent of Aussies agree that loyalty programs are key motivators for continuing to choose a retailer.
Major pharmacy groups are constantly updating their loyalty programs and the Priceline Sister Club is one of the most popular in the country. The four major reasons for the success of a loyalty program are divided between financial – rebates or cashbacks and discounts, and non-financial – free products and free shipping. Of equal importance to 67 per cent of Australians and 73 per cent of New Zealanders is that rewards should be available across all channels – in-store, from a website or on a mobile device.
Snippets from the wires
- China will overtake New Zealand as Australia's number one overseas tourist market this year. According to Tourism Research Australia, Chinese tourists will spend $20.3 billion by 2021/22 – 35 per cent of total international expenditure.
- L'Occitane created the Le Couvent des Minimes brand in 2004. The brand is sold in 15 countries and Gardener's Hand Healer has become its cult product. That's not enough and L'Occitane has sold the brand to the HLD Group, owner of Laboratoires Filorga and Laboratoires SVR, the anti-ageing and derm skincare brands.
- Beiersdorf has declared 2016 as, "a successful business year". Following a strong fourth quarter, the German multinational's organic sales rose 3.2 per cent for the year to 6.75 billion euros ($AU9.18 billion).
- According to the KPMG 2017 Global Online Consumer Report, together with some South American nations, Australia and New Zealand are the only countries where the e-stores of bricks-and-mortar retailers are more popular than online only stores. Other takeaways include: Australian customers complete an average of 16 online transactions per year with an average value of $205. More than 65 per cent of transactions are from retailers in Australia and New Zealand, in contrast to 13.1 per cent from Western Europe and 11.1 per cent from the US.
Image: a Miraval resort
