Huda Beauty to extend into sub-brands; LVMH to relaunch Jean Patou; Nestlé considers sale of Skin Health Division; and Japan's largest cosmetics portal fast tracks sales to Asia.
Huda Beauty to extend into sub-brands
Huda Kattan's meteoric rise to become one of indie beauty's most successful entrepreneurs catapulted her onto Forbes list of America's Richest Self-Made Women earlier this year. With an estimated net worth of US$550 million, Kattan was a safe bet for TSG Consumer Partners, the private equity firm whose portfolio includes Zoeva and Smashbox, to invest in Huda Beauty last December. At the time, the five year old brand said that the minority stake investment would be used to expand into new categories and internationally.
To drive the strategy, Huda Beauty has appointed two senior executives with strong track records. Nathalie Kristo, a veteran of L'Oréal who guided the rapid expansion of NYX Cosmetics, has been tapped as the US President of Huda Beauty. Across the Pond Helena Simpson, former international vice-president of Kendo, the LVMH-owned beauty incubator whose stable includes Fenty Beauty, Marc Jacobs Beauty and Kat Von D, joins as President for Europe. Both Nathalie and Helena bring incredible brand strategy expertise and knowledge of the industry which will be invaluable for the future of Huda Beauty, says Kattan.
Mid-year, word spread like wildfire that Huda Beauty would be launching a fragrance – its first foray beyond makeup. It has now been announced that a 4 SKU fragrance lineup will launch in November, the first of series of sub-brands to build a cross-axes beauty empire.
LVMH to relaunch Jean Patou
News trickled out in July that LVMH was circling Jean Patou, the 106 year old French couture house. The world's largest luxury goods group has confirmed the acquisition of a majority stake in the legendary fashion pioneer from Designer Parfums. The UK-based niche fragrance specialist bought the Jean Patou business from P&G Prestige in 2011 with the goal of reinvigorating its iconic fragrances – notably Joy and 1000 – globally. In Australia, Escentials Brands is the distributor of Jean Patou and has been successful in fuelling a renewed interest in the signature fragrances in pharmacies and department stores.
Jean Patou was the first designer to use his monogram in his fashion collections and pioneered the sportswear concept, including the first knitted bathing suits. LVMH has hired Guillaume Henry, the former creative director of Nina Ricci, who also played a pivotal role in the revival of Carven as a fashion brand. The first collection of clothing and accessories from the resurrected Jean Patou label will launch in the second half of 2019. A flagship store in Paris and an online store are also in the works. Many designers sell a lot more fragrances than fashions and the comeback of Jean Patou will no doubt extend to the fragrance business.
Nestlé considers sale of Skin Health Division
Global headlines are filled with news of the acquisitions and expansion strategies of giant multinationals. But some of the world's biggest names regularly divest themselves of brands that no longer appeal or are a good fit for future plans.
In 2014, Nestlé acquired full ownership of Galderma, the makers of Benzac, from L'Oréal and announced the formation of a new skin health division. Two years later, the Swiss titan upped the ante by forming a joint venture with Guthy-Renker, acquiring a majority stake in Proactiv, the world's leading non-prescription anti-acne brand. At the time there were big plans to increase the distribution of Proactiv to Europe, South America and Asia.
Nestlé’s Skin Health Division also includes Cetaphil and the dermal filler Restylane, but the multinational has announced it will re-assess the viability of its skincare operations with a view to divesting the once-prized portfolio. No easy task as the division employs 5000 people in 40 countries and has R&D facilities around the world.
Nestlé Skin Health reported sales of US$2.75 billion in 2017, with consumer skincare sales accounting for 35 per cent of revenues, followed by aesthetics at 34 per cent and prescription at 31 per cent. The company plans to intensify its focus on nutrition, health and wellness and will complete a review of its skincare operations by mid-next year.
Japan's largest cosmetics portal fast tracks sales to Asia
Launched in 1999, @cosme is Japan's largest consumer-to-consumer products information store. The portal boasts 14 million users and claims that 75 per cent of Japanese women in their 20s and 30s use the site and trawl through over 300,000 products from 32,000 local and domestic beauty and personal care brands.
Parent company Istyle inaugurated cross-border online sales in 2014 and launched an English language version of the @cosme store in mid-2015 to increase sales to other Asian countries, including China. Istyle's e-commerce and in-store sales reached US$120 million in 2017, securing the retailer a spot on Forbes Asia's Best 200 Under a Billion List.
There's plenty more to come as the demand for J-Beauty soars across Asia. The beauty broker has 25 @cosme stores in Japan and opened its first overseas outpost in Taiwan in mid-2017, following the acquisition of the country's leading cosmetics customer review site a year earlier. Istyle now has four stores in Taiwan and launched its first bricks-and-mortar store in Hong Kong in June, where it will have three outlets by year's end. The first @cosme store in Thailand will open in November with plans to open four more over the next three years. South Korea is also on Istyle's radar and the company is already supplying Japanese beauty products to local retailers.
Snippets from the Wires
- Cash has been falling out of favour with Australian consumers for years. New research from payments company Square reveals that 81 per cent of Aussie shoppers prefer to pay by card and 33 per cent are card-only shoppers. Pickpockets must be feeling the pinch as 77 per cent of those surveyed also said they carried round much less cash than they used to.
- British fashion retailer Boohoo is going gangbusters and 41 per cent of the company's sales across the core business and the PrettyLittleThing and Nasty Gal brands now come from outside the UK. Shares in Boohoo, which sells fashions, shoes, accessories and beauty products, soared 9 per cent on the news that revenues jumped 50 per cent in the six months to August 31 – by contrast to same period last year before – to reach AUD$713 million. The company's distribution centre in the UK is currently being extended to increase the group's capacity to generate AUD$5.41 billion of net sales worldwide.
- Haircare is a big focus at this year's in-cosmetics Asia, to be held in Bangkok from October 30 to November 1. The Asia/Pacific region is on track to become the world's largest regional haircare market by 2022, reports Global Data, driven mainly by increasing demand from China, India, Malaysia and the Philippines. According to market researcher Kantar, 50 per cent of consumers worldwide consider their hair to be damaged, dry, lifeless or limp. Anti-frizz and anti-pollution claims are especially important in Asia.
- Jo Malone has become a major hit with Chinese fragrance fans. The Lauder-owned brand has introduced a new tool on its recently launched store on Alibaba's Tmall which features a questionnaire designed to help consumers choose the ideal fragrance and tips on layering.
