TPG in talks to buy stake in Anastasia Beverly Hills; Gucci and Tiffany fragrances power strong growth for Coty; Analysis - L'Oréal's Global Plans for Stylenanda; and South Korean tourist spend in Australia jumps past AUD$1.6 billion.
TPG in talks to buy stake in Anastasia Beverly Hills
In February news broke that Anastasia Soare was looking to sell all or part of her cult eyebrow brand, Anastasia Beverley Hills. Following its recent minority stake acquisition in Rodan + Fields, TPG Capital is reported to be in advanced talks to acquire a similar minority foothold in the fast-growing brand which brings in an estimated US$340 million a year, reports WWD.
Sold in Australia through Sephora, Anastasia Beverly Hills was founded in 2000. Today, there are 485 products in the lineup and there has been a shift away from brows to lipstick, eyeshadows and highlighters. An early pioneer of Instagram marketing, the brand now has 16 million followers and counts Kim Kardashian among its celebrity fans.
TPG Capital is the majority owner of e.l.f Cosmetics and Beautycounter and could value Anastasia Beverly Hills as high as US$3 billion for the proposed investment. Last year Kline Group fingered Anastasia Beverly Hills as one the beauty industry's most buyable brands. Soare, who immigrated to the US from Romania in 1989 as a 32 year old single mother who didn't speak English very well, is being hailed as America's newest beauty billionaire by Forbes.
Gucci and Tiffany fragrances power strong growth for Coty
Coty's luxury division was on a roll in Q3 of the multinational's 2018 fiscal year. Revenues grew 19 per cent to US$752.5 million. Recently launched fragrance blockbusters such as Gucci Bloom, Tiffany & Co and Chloe Nomade performed exceptionally well in North America and Europe. Total revenues for the period rose 9.4 per cent to US$2.2 billion. Results that boosted Coty's net revenues for the first nine months of the 2018 financial year to US$7.1 billion – an increase of 31.2 per cent.
Coty re-launched Covergirl and Max Factor, two of its acquisitions from P&G, and leveraged Clairol Nice 'n Easy late last year. The consumer beauty division posted a lift of 3 per cent during Q3 and professional beauty revenues increased by 10 per cent. Our results were generally in line with our expectations, said CEO Camillo Pane. "The luxury division continued to deliver strong results, while our professional beauty division once again demonstrated consistent growth. We continued to reshape our growth profile by strengthening our iconic global brands, supported by recent re-launches".
Analysis - L'Oréal's Global Plans for Stylenanda
The early dust has cleared and the figures have emerged. As we reported recently, L'Oréal bought Stylenanda, the South Korean makeup and fashion brand founded as a website for re-cycled clothing in 2004 by Kim Soo-hee. According to Forbes, Stylenanda boasted sales of US$101 million in 2016 and L'Oréal has acquired the company for close to US$370 million.
The makeup brand 3CE accounts for 70 per cent of Stylenanda's sales and is sold in 70 locations across Asia, mainly China, Hong Kong, Singapore, Japan and Thailand, and through Sephora in Australia. To date, the K-Beauty phenomenon outside Korea has focused on the best-selling skincare brands of the two major South Korean beauty players, AmorePacific and LG Household & Healthcare. But the recent L'Oréal buyout of Stylenanda marks the dawn of a new age which it hopes will lead to the first truly global makeup brand from South Korea.
The world's largest pure beauty player already has plans in place to position 3CE in a similar fashion to new stablemate NYX Cosmetics. Accessible prices will be just as important as innovation and runway trends. Founder Kim Soo-hee, who has featured in the Forbes Asia Emergent list of 25 leading female entrepreneurs, says that with L'Oréal's backing Stylenanda is on track to become a world-renowned brand and leader of global beauty trends. Alexis Perakis-Valat, President of L'Oréal's Consumer Products Division rubber-stamps the comment – "Stylenanda captures Seoul's vibe, edge and creativity. It is perfectly positioned to nourish the growing appetite for makeup of Millennials in China, Korea and beyond".
South Korean tourist spend in Australia jumps past AUD$1.6 billion
The spotlight has been firmly on China as the fastest growing international tourism market to Australia. But South Korea is actually growing faster from a smaller base, with South Korean tourists spending AUD$1.6 billion in 2016 – an increase of 34 per cent over the previous year. The ninth largest source of international visitors, over 302,000 South Koreans visited Australia in 2017.
South Koreans are travelling overseas in unprecedented numbers, reports the Bank of Korea. In the first three months of the year, 7.43 million South Koreans headed overseas – an increase of 14.1 per cent over the same period in 2017. With wallets and purses at the ready, South Korea's total overseas tourism spend for the three months to March 31st was US$8.5 billion – an increase of US$1.12 billion on the final quarter of 2017.
New Zealand, the US and the UK fill three of the top four rankings of international visitor arrivals to Australia. But the Asia/Pacific region accounted for 10 out of the top 15 tourism markets and 60 per cent of overseas arrivals in 2017. South Koreans have the second highest incomes in Asia behind Japan and Tourism Australia has targeted the wealthy nation though Korean Air and K-Pop stars. With their love of beauty and fashion, young South Korean women like to travel in small groups and several Australian hotel groups have accommodated this "share” form of travel in room configurations.
Snippets from the Wires
- Unilever bought Carver Korea last November. One of the nice little earners acquired in the deal was the A.H.C skincare line, a high-end spa and clinic range with superior hydration claims founded in 1999. Aimed at 20-somethings, A.H.C is already available in 20 airports and duty-free locations in China and Korea and will roll-out to global travel retail by the end of the year.
- eBay Australia has partnered with Flybuys – Australia's most popular loyalty program. The move is the biggest potential growth spurt for Flybuys since the Virgin Velocity frequent flyer team-up of 2016. eBay customers earn one point for every $2 spent on designated items.
- Global sales of La Prairie soared 55.5 per cent in Q1 2018 to help boost parent company Beiersdorf's group organic sales to 1.807 billion euros (AUD$2.86 billion) – an increase of 6.5 per cent.
- A nationwide rollout to all Ulta stores in the US was a key driver of e.l.f Cosmetics Q1 results with sales lifting to US$65.9 million.
- Thor Equity and Meyer Bergman bought London's Burlington Arcade, linking Piccadilly and Bond Street, for AUD$186.7 million in 2010. Following several major upgrades, the historic shopping gallery which celebrates its 200th anniversary next year has been sold to private investors for AUD$538.5 million. First put on the market last year with hopes of AUD$718 million, the UK's longest covered shopping street attracts four million visitors a year and is home to global luxury brands, including Chanel, la Perla, Penhaligon's and Manolo Blahnik.
