Dolce & Gabbana sign new license with Shiseido, L'Oréal goes niche with acquisition of Atelier Cologne, major study debunks Chinese shopper stereotypes, and The Shaver Shop eyes major expansion.
Dolce & Gabbana sign new license with Shiseido
D&G elected not to make the move to Coty following the P&G sell-off. Since January, speculation has been rife about which leading multinational would succeed in coaxing the luxury Italian luxury house to join its stable. Dolce & Gabbana is a real prize, enjoying beauty and fragrance sales of $US446 million in 2015. By choosing Shiseido as its new licensee, the global super brand has sent a clear message to the premium cosmetics and skincare industry.
D&G's skincare and cosmetics business was something of a sideline in contrast to the brand's fragrance revenues during its time at P&G. The future looks very different. Following anti-trust scrutiny, D&G will be able to harness 's triple-axis capabilities across skincare, fragrance and cosmetics from October 1st. The new license will stay close to its European roots, however, and will be managed by the Shiseido Group's Paris office.
The agreement is a win-win for Shiseido. Global travel retail will be a crucial channel to rapidly boost D&G's beauty and fragrance sales, notes Masahiko Uotani, CEO of the Shiseido Group. The new deal will also fast-track the Japanese multinational' s Vision 2020 strategy to maximise top-line growth over the next four years.
L'Oréal goes niche with acquisition of Atelier Cologne
For the past few years, leading fragrance experts such as Michael Edwards have been asking - Do we need a new name for niche perfumery? In the 10 years from 2003 to 2013, annual launches of niche fragrances increased from 128 to 395 and continue to rise. A runaway growth rate that has seen major players like acquire such prestige brands as Le Labo and By Kilian. Puig has also been very active in the fast-growing sector with the buyouts of Penhaligon's and L'Artisan Parfumeur.
L'Oréal has joined the exclusive club with the acquisition of Atelier Cologne. Founded in 2009 by Sylvie Ganter and Christophe Cervasel, the brand retails in 800 locations across 40 countries, including Australia. The company also has six standalone stores - three in France, two in the US and one in Hong Kong.
L'Oréal's luxury division has been building its cred in high-end fragrance for some time now. First with the Armani Prive lineup, followed by the exclusive Le Vestiaire des Parfums range from Yves Saint Laurent, Maison Lancome, Replica by Martin Margiela and the recent Ralph Lauren Collection.
Atelier Cologne has major points-of-difference from its chic stablemates. The brand traces its roots back to the French tradition of premium fragrances using the finest raw materials and specialises in "cologne absolues". It's also unisex and produces fragranced soaps, shower gels, body lotions and candles. In 2015, the percentage growth of premium fragrances exceeded the growth of mass scents for the first time, reports Euromonitor - 7 per cent, in contrast to 5.7per cent.
Major study debunks Chinese shopper stereotypes
With beauty brands in hot pursuit of Chinese shoppers, it's amazing how many myths are past their use-by date. Oliver Wyman, the global management consultants who operate in 26 countries, have released the report - The Changing Face of the Chinese Traveller - to put the kibosh on the main misunderstandings. It is true, though, that cosmetics are the most commonly purchased category.
. "They go abroad only to shop".
No, they don't. While it's true that nearly every Chinese tourist does go shopping when overseas (what nationality doesn't?), a hefty 63 per cent say that sight-seeing is their main travel motivation. Only 15 per cent finger shopping as the sole reason to hit the road.
. "They spend indiscriminately".
Again, no. On average, Chinese travellers spend $US1200 on shopping when abroad, says Oliver Wyman. Collectively, that adds up to billions, but only 50 per cent is personal. Thirty two per cent said they spend up big on gifts for the folks back home and 19 per cent for re-sale.
. "They always travel in groups"or "Independent travellers are quickly replacing groups"
Both groups are on the rise. Independent travellers are becoming more common, but they are complementing group travel - not replacing it. Groups still have the edge the greater the distance from China. Unsurprisingly, Hong Kong and Macau report the highest percentage of solo visitors.
. "Chinese travellers are more trouble than they are worth".
Cultural misunderstandings are less of a problem in countries with a large resident Chinese population such as Australia, the US and Canada. According to Oliver Wyman: "Today, there is no such thing as the archetypal Chinese traveller; they are complex and multi-faceted. If businesses make broad generalisations, they will lose key opportunities".
The Shaver Shop eyes major expansion.
Founded 30 years ago as a repair shop for electric razors, The Shaver Shop has become a major Australian retail success story. In mid-June the company announced plans to raise $98 million for a July 1st IPO date. No wonder. Sales have risen from $34 million a year in 2014 to a forecast of $106 million for the 2016 financial year, with the average store worth $21,000 per square metre in sales.
This rapid rise can be traced to the 2011 acquisition of an 80 per cent stake in the company by an investor consortium, led by Brodie Arnhold, chief executive of the Melbourne Racing Club, Brian Singer, co-founder of Ripcurl and Alan Green, co-founder of Quiksilver. At the end of last week, The Shaver Shop achieved the magic target of 100 stores - 80 in Australia and 20 in New Zealand. The company is growing so fast that none of the IPO funds will be allocated to expanding its network by 45 more stores over the next three years.
In spite of the name, The Shaver Shop stocks a wide variety of grooming products, shavers and trimmers and 53 per cent of its customers are women.
Snippets from the wires
- Storied department store chains around the world are boosting their online presence through acquisitions. Hudson's Bay Company, parent of Saks Fifth Avenue, acquired flash sale site, Gilt, and French stalwart Printemps bought e-commerce site, Place des Tendances. Galeries Lafayette has followed suit with the buyout of InstantLuxe.com, a re-sale site for certified luxury goods. Founded in 2009, the successful business has 700,000 members.
- Pola Orbis, the parent company of , is on a roll. The leading Japanese cosmetics player has announced sales of 106 billion yen ($AUD1.38 billion) for the first six months of the year.
- Adidas poached Kanye West from rival Nike in 2013 to revive flagging sales in the US. The strategy worked. The German sportswear company has re-signed West for a long-term deal, claiming it is the most significant partnership between a non-athlete and a sports brand. Adidas plans new stores selling Kanye's Yeezy-branded products and will introduce new sports performance designs.
- Japan's battle to stem the tide of K-Beauty continues. KOSE, the leading Japanese skincare player, is celebrating its 70th anniversary this year. As part of its ongoing expansion, the company will introduce its brightening Sekkisei range in US travel retail.
