The Hut Group continues shopping spree with Eyeko buyout; longtime investor acquires majority stake in Birchbox; private equity firm TPG nabs minority investment in Rodan + Fields; and skincare boosts bottom line for Estée Lauder.
The Hut Group continues shopping spree with Eyeko buyout
UK-based The Hut Group (THG) sparked headlines worldwide last year when the company snapped up Illamasqua, ESPA, Glossybox and Aussie online retailer RY. The rapidly expanding online beauty and wellness retailer has now acquired Eyeko for an undisclosed sum to cement it's position as Europe's largest retailer of premium beauty brands, including M.A.C, Lancôme and Estée Lauder.
Eyeko was founded in 1999 by British entrepreneurs, Max and Nina Leykind, and the brand's mascaras, liquid liners and brow gels are sold in Australia, the US and Europe. Justin Fullerton, the former General Manager of Benefit Australia, enjoyed a short stint as CEO in 2016 and Eyeko is stocked by leading international retailers such as Ulta, Sephora, Space NK and Selfridges. Alexa Chung has also worked with the brand as a creative consultant to leverage its cult status as a leader in innovative eye makeup.
According to Matthew Moulding, THG's founder and CEO: " We look forward to maximising Eyeko's unique offering across the globe through our world-class e-commerce platform, ingenuity and global marketing infrastructure.
Longtime investor acquires majority stake in Birchbox
Birchbox, the US beauty subscription service, has been hawking itself around for over a year. Potential buyers have included retail behemoth Walmart and the QVC shopping channel. But even though the company has more than 2.5 million active customers and partners with more than 100 brands, Birchbox is deeply in debt report analysts.
It's been a rocky ride for Birchbox since it launched eight years ago. Once valued at close to US$500 million, the company has raised US$90 million in investor funding. But 2016 was a downbeat year and Birchbox was forced to scale back growth plans and institute several rounds of layoffs.
Leading hedge fund, Viking Global Investors, a longtime investor in Birchbox, has acquired a majority stake for US$15 million. Co-founder and CEO, Katia Beauchamp, will continue to run the company. With a new injection of funds, she remains upbeat. "We are in a position to actively pursue plans that help further our mission and fuel our ambitious goals in the US and in our global markets".
Private equity firm TPG nabs minority investment in Rodan + Fields
Following its recent ranking as the number one skincare brand in the US, Rodan + Fields has attracted the interest of TPG Capital, who own a majority stake in e.l.f Cosmetics. To accelerate Rodan + Fields continuing growth, the leading private equity firm has made a strategic minority investment in the innovative skincare specialist.
In 2017, Rodan + Fields growth rate exceeded 40 per cent to push net revenues to US$1.5 billion. Founded in 2000 by leading derms, Dr Katie Rodan and Dr Kathy Fields, the brand has a network of more than 200,000 consultants in the US, Canada and Australia, catering to two million customers. Estée Lauder owned Rodan + Fields from 2003 to 2007 when its founders bought back the company.
In spite of Avon's woes, international investors have scaled up their interest in direct sales business models because more recent players, such as Coty-owned Younique and Rodan + Fields, make more savvy use of social media and infomercials. As a firm with a history of investing in businesses that are fundamentally changing their industries, we see Rodan + Fields as being at the intersection of emerging consumer trends, says Jim Coulter, Co-Ceo and Co-Founder of TPG Capital.
Skincare boosts bottom line for Estée Lauder
The Estée Lauder Companies continue to kick strong growth goals. Global sales for the third quarter ending in March saw net global sales soar 18 per cent to US$3.37 billion – up from US$2.86 billion for the same period in 2017. Travel retail, e-commerce and the Asia/Pacific region were standout engines of growth, noted CEO Fabrizio Freda.
Skincare sales were on fire, lifting 25 per cent to US$1.45 billion. Leading brands such as the core Estée Lauder brand, La Mer, Origins, Clinique and GLAMGLOW all enjoyed double digit growth. The same story played out in makeup where Estée Lauder and Tom Ford posted double digit increases and growth for M.A.C and Clinique was also solid to produce worldwide sales of US$1.388 billion. The outstanding Q3 results pushed the multinational's reported net sales for the first nine months of its 2018 fiscal year to US$10.39 billion – a 16 per cent uplift from the US$8.93 billion over the same period 12 months earlier.
The Europe/Middle East/Africa region clinched the number one ranking with sales of US$1.416 billion, followed by The Americas at US$1.181 billion and Asia/Pacific at US$773 million. Each of our biggest brands grew globally, with exceptional growth from Estée Lauder, said Mr Freda. "These results reflect our strong array of hero products, as well as product and service innovations". On the back of such gains, the Estée Lauder Companies has raised its growth expectations for the 2018 fiscal year to between 11 and 12 per cent.
Snippets from the Wires
- Shampoos and conditioners still make up the vast bulk of global haircare revenues. According to Evonik, the largest speciality chemicals company in the world, global sales of shampoos and conditioners will reach US$39 billion by the end of the year.
- Korean giant LG Household & Healthcare has debuted its Belif skincare range through Sephora in 17 European countries, including Germany, France and Italy. Inspired by 19th century apothecary formulas, the hydrating herbal lineup is already popular in Asia and stocked by 300 Sephora stores in the US.
- Meitu, China's most popular photo-editing app, was launched 10 years ago and has enjoyed the sort of growth Western competitors can only dream of. Shiseido, Dior and Gucci are just a handful of the major international beauty players who have collaborated with Meitu to reach its 481.3 million active monthly users.
- A report from One Click Retail estimates that Amazon's 2018 first quarter beauty and health sales in the US reached US$1.9 billion – a 31 per cent uptick on the same period last year. Sales of luxury beauty products increased by 57 per cent to US$200 million, with US$40 million earmarked for skincare.
