Private equity firm buys Dr Scholl's for US$585 million; Givaudan acquires Drom to expand global fragrance presence; LVMH's revenues jump 15 per cent in first half of 2019; and sensitive skin a major issue in China.
Private equity firm buys Dr Scholl's for US$585 million
German pharmaceutical giant Bayer is in the midst of a major sell-off strategy. In 2014, the multinational bought the consumer healthcare business of Merck, another German pharma heavyhitter, for US$14.2 billion. An acquisition that included the Coppertone and Dr Scholl's brands.
In May, Coppertone was sold to Beiersdorf, the parent company of Nivea and La Prairie, for US$550 million and Dr Scholl's has followed the suncare stalwart to the block in quick succession. Yellow Wood Partners, with current investments in the Freeman Beauty and Ecotools brands, has acquired Dr Scholl's for US$585 million. The private equity firm is consumer-focused and past investments include Dr Teal's and Eylure.
Dr Scholl's is one of the most iconic names in global footcare with a history dating back 110 years. In 2018, the brand enjoyed sales of US$234 million. Bayer took over US seeds and agriculture giant, Monsanto, in a mega-merger deal worth US$66 billion – the largest all cash transaction on record – in 2017. The company is currently streamlining its business to focus on agriculture and healthcare.
Givaudan acquires Drom to expand global fragrance presence
Givaudan, the world's largest player in the flavours and fragrances industries, has been on a shopping spree this year. In April, the Swiss giant acquired the cosmetics division of AMSilk, the world's leading supplier of synthetic silk polymers. A month later, Givaudan completed the buyout of Albert Vieille, a French specialist in essential oils and natural ingredients for the fragrance industry. Founded in 1920 and based in Grasse, the spiritual home of fragrance, Albert Vieille sources ingredients from around the world and will cement Givuadan's growing share of the natural fragrance market.
Drom is another heritage company with a history dating back to 1911. Among the top 10 global leaders in creating fragrances for consumer products and fine fragrances, the Munich-based company set up an office in Sydney in 1982. Rapid expansion over the past 20 years has seen the implementation of an ambitious global strategy and Drom has manufacturing facilities in China, Germany, the US and Brazil. Worldwide sales reached 110 million euros (AUD$177.43 million) in 2018. Givaudan has acquired Drom for an undisclosed sum and the deal will close in the third quarter.
LVMH's revenues jump 15 per cent in first half of 2019
Bernard Arnault, Chairman and CEO of LVMH, the world's largest luxury goods group, leap-frogged Bill Gates recently to become the world's second richest man with a net worth of US$107.6 billion. It's not hard to see why as the conglomerate's revenues soared 15 per cent in the first half of 2019 to US$28 billion.
The Perfumes & Cosmetics division enjoyed a sales bump of 12 per cent over the same period last year to 3.236 blllion euros (US$3.606 billion) to deliver a profit of 387 million euros (US$431.3 million). Flagship brands such as Parfums Christian Dior, Guerlain, Parfums Givenchy and Benefit Cosmetics contributed the most to the continued success of the business. Sephora is part of LVMH's Selective Retailing division, which also saw strong growth of 12 per cent to 7.09 billion euros (US$7.91 billion). The world's largest speciality beauty chain gained market share in all of the 34 countries in which it operates and also enjoyed a strong upswing in online sales.
Sensitive skin a major issue in China
It's long been recognised that Asian skin is more prone to hyper-pigmentation. But it is imperative that beauty and personal care companies understand the nature of Asian skin and that it is more prone to sensitivity because of a thinner stratum corneum – the outermost layer of the skin – says Sharon Kwek, Senior Innovation & Insights Analyst at Mintel, an international leader in market research.
The payoff for an increased focus on skincare for sensitive skin across Asia is huge. In a recent report from Mintel, 44 per cent of female facial skincare consumers in China revealed that having sensitive skin prompted them to change or upgrade skincare products. A further 34 per cent who use sheet face masks said they would pay for a product formulated for sensitive skin.
Beauty advisors are very much back in fashion in Asia, reports Mintel. More than 73 per cent of Chinese beauty and personal care customers prefer to speak to a beauty advisor who can provide appropriate advice. "While Asians may be aware of their skin sensitivities, it is important that companies, brands, manufacturers and retailers support consumers in choosing the skincare that will work best for them", says Kwek. "This encompasses all consumer touchpoints, be it through an official brand website, advertising, in-store shopping experience or social channels".
Snippets from the Wires
- More and more beauty multinationals are aggressively pursuing direct-to-consumer (DTC) sales and e-commerce. Spanish fragrance maker, Puig, has launched a new brand called Queendom, aimed at younger Millennial and Gen Zers. Springboarded by Puig Futures, the company's recently founded incubator division, the first products bearing the new DTC label are travel accessories and T-shirts. But plans are underway for perfumes and cosmetics.
- The global jojoba oil market is predicted to reach US$272.4 million by 2020, reveals Reports and Data. The US is the largest market with a 22.3 per cent share. Over the past few years there has been a significant increase in the use of jojoba oil in sunscreens, lipsticks and balms because its stability extends shelf life.
- The global eyelash enhancement market reached sales of US$280 million in 2018, reports Fact.MR., the international market intelligence provider. North America accounts for the lion's share of the market – US$100 million. But as consumer demand for lengthening, strengthening and enhancing lashes continues to surge, the category is poised to record annual growth of 5 per cent.
