IPO looms for e.l.f Cosmetics, top beauty ad spends in Australian print media, natural ingredients power the whitening skincare market, and healthy growth for Henkel and Inter Parfums.
IPO looms for e.l.f Cosmetics
In February last year, private equity firm TPG Capital bought a 49 per cent stake in JA Cosmetics, the parent company of e.l.f cosmetics, in a deal which valued the budget brand at US$300 million. One of the fastest-growing beauty brands in the world, e.l.f products are sold in 17 countries, including Australia, and revenues climbed to US$125 million in 2014.
Founded in 2004 by Joseph Shamah and Scott Borba, over 50 per cent of the company's products are sold online. Mass retailers such as Target and Walmart in the US and Kmart in Australia are the natural retail venues for the inexpensive, high quality brand which has ballooned from 13 makeup items to over 300 SKUS, including bath products and professional tools. Coty and Helen of Troy have both shown interest in acquiring e.l.f in the past and they could get another chance to bid.
JA Cosmetics has appointed an undisclosed bank to launch an IPO for e.l.f, say insiders, which could take place as early as the first half of next year. TPG and co-owner Warburg Pincus sold off the Neiman Marcus department store group two years ago for US$6 billion.
Top beauty ad spends in Australian print media
What was the most advertised beauty product in local print media in October? The Perfectly (Un)Done range, reports analysts My Market Insight (MMI), with an ad spend of $247,000. The top five makeup/nail brands spruiking their wares with ad dollars last month were: ($217,689), Sally Hansen ($205,361), ($156,286), ($94,405) and Chanel ($87,508).
MMI also tracked beauty editorial mentions in Australian print media for the year. Lipstick is the product that racked up most page space in 2015. Coty should be happy that nails were the second most featured product - OPI and Sally Hansen scored the most reviews, followed by essie. Eyeshadow ranked third, followed by foundation and mascara. The mascara wars are still raging with L'Oréal Paris, Maybelline New York and Rimmel London dominating mascara coverage in print.
Natural ingredients power the whitening skincare market
More and more women are looking for naturally-based whitening and brightening products. Last week introduced the Sydney beauty media to its improved White Lucent range, featuring hyaluronic acid which occurs naturally in the skin and PRO Resistance technology. A buyer from one of the major pharmacy chains recently told me that 's new release - Natural Pigmentation Oil - is "walking off the shelves".
In a recent report from Frost & Sullivan, the global whitening ingredients market - not finished products - reached US$381 million last year and is expected to grow to US$827.9 million over the next five years. Natural ingredients, mainly from plant extracts, are strong drivers in the booming sector, says the British researcher, and women are also looking for multi-benefit products which perform more than one role.
The whitening ingredient hydroquinone and its derivatives are banned in Western Europe and North America, a factor which is also springboarding serious investment in botanical R&D. A uniform skin tone is the Holy Grail in all key markets adds Frost & Sullivan and cosmetic formulaters are also developing whitening products for the neckline, arms and feet as well as the face. Whitening and brightening products have become a major star of the anti-ageing category as women seek more radiant complexions. Brazil and the Middle East are also becoming lucrative markets as sales in Asia, the US, Australasia and North America continue to enjoy double digit growth says Frost & Sullivan.
Healthy growth for Henkel and Inter Parfums
Henkel may have missed out on buying a chunk of P&G's haircare business but the maker of Schwarzkopf is on a roll. Slower economic growth in China failed to make too big a dent on profits and the multinational's third quarter revenues increased 12.3 per cent to 778 million euros (AUD$1.17 billion). A result that prompted Henkel to raise its full year forecast to exceed 10 per cent growth by year's end.
fragrances were the bullet performer for Inter Parfums for the first nine months of the year. One of the fragrance maker's top three best-selling licenses, sales spiked 51 per cent on recent releases such as Jimmy Choo Man and Illicit. , which recently released its first women's fragrance, enjoyed a 6 per cent hike in sales. But Lanvin, popular in Russia, suffered a 1 per cent decline because of the country's challenging economic conditions.
Karl Lagerfeld fragrances nose-dived a whopping 45 per cent but other mid-sized brands picked up some of the slack - Boucheron ( up 26 per cent) and (up 18 per cent). Inter Parfums net sales for the quarter grew 3.5 per cent to US$138.9 million and the company is on track to reach between US$460 million and US$470 million by the end of the year. According to Chairman Jean Madar: "The licensing agreements signed over the past 12 months with Abercrombie & Fitch, Hollister and Coach, and our acquisition of the Rochas brand, are all important catalysts for future growth".
Snippets from the wires
- Korean beauty brands are targeting Japan, China and major Western countries from Europe to the US. India is also firmly on the radar. A trade agreement between the countries means that Korean beauty products do not attract import duties. A consortium of Korean beauty companies, including PLK International and Esthetics House, have teamed with distribution company Rajshree Enterprises to launch in 70 outlets across 21 cities by the end of 2016.
- Elizabeth Arden Red Door Spa has bought Manicube, the US in-office beauty and grooming services company for an undisclosed sum. Across the Atlantic, Gebr.Heinemann in Germany, one of the world's leading travel retail operators, has named Elizabeth Arden its 2015 Supplier of the Year.
- Sales during Guanggan Jie, China's famous Singles Day, have surpassed last year's record of US$9.3 billion. James Bond star Daniel Craig and Kevin Spacey featured in a four hour variety show hosted by Alibaba, the Chinese e-commerce giant. Sales moved past US$10 billion and 70 percent of transactions were made using mobile phones. Unilever, P&G and were the key cosmetic players in this year's shop-a-thon hailed as the "most international yet".
- The merger between Yoox and Net-a-Porter has already paid off. The newly merged e-commerce players reported a revenue jump of 21.5 per cent for the first nine months of the year to AUD$1.81 billion.
- Increased tourism from Asia and a weaker Aussie dollar are driving the Australian tourism industry to new heights. Currently worth $118 billion a year, IBISWorld estimates strong growth to $129.7 billion by 2020/21. The top five spending nations for 2014/15 were: China ($7 billion), the UK ($3.5 billion), the US ($3.03 billion), New Zealand ($2.49 billion) and Japan ($1.34 billion).
