Estée Lauder takes legal action – Brandon Truaxe exits Deciem; Global wellness industry reaches $US4.2 trillion; Victoria's Secret parent looks to offload La Senza; Dior's Joy fragrance boosts bottom Line for LVMH.
Estée Lauder takes legal action – Brandon Truaxe exits Deciem
Investing in an edgy brand can have unforeseen repercussions but few have been as dramatic as Estée Lauder's acquisition of a 28 per cent stake in Deciem last year. Just over a week ago, founder Brandon Truaxe announced on Instagram that Deciem was closing its operations. By Wednesday, the action had moved from social media to the courtroom.
Estée Lauder filed an injunction in Canada, the company's home base, to remove Truaxe from the Deciem board and his position as CEO – even though he insisted on describing himself as merely "a worker". The multinational claimed that Trueaxe's erratic behaviour is "causing irreparable harm to Deciem's business, and chaos and confusion for Deciem's employees, customers, consumers, suppliers, landlords and other stakeholders". In addition, Estée Lauder said that the Deciem debacle is also hurting its own reputation because of its association and investment in the company.
On Friday morning, a Canadian judge ruled in favour of Lauder's application to appoint co-founder Nicola Kilner as the sole, interim CEO and remove Truaxe. Deciem stores overseas will reopen shortly and the company will resume normal business as soon as possible.
Global wellness industry reaches $US4.2 trillion
At one time educating consumers about the microbiome would have taken some years but the term for the bacteria-rich layer that sits atop the surface of the skin which is crucial to its health has achieved cut-through in double-quick time. According to Mintel, 86 per cent of US Millennials say they are interested in skincare containing probiotics. No wonder when the global wellness industry experienced galloping growth of 12.8 per cent from $US3.7 trillion in 2015 to $US4.2 trillion last year. A huge 5.3 per cent of global economic output.
The worldwide spa economy is now worth $US118.8 billion, reports the Global Wellness Institute, and the thermal springs market spiked to $US56.2 billion last year. Wellness tourism grew at double the rate of tourism overall in 2017 - 6.5 per cent - to $US639 billion, with international travellers taking 830 million trips.
The 10 major categories of the global wellness industry and their current growth rates are:
- Personal care, beauty and anti-ageing – + 4.1 per cent
- Healthy eating, nutrition and weight loss – + 4.1 per cent
- Wellness tourism – + 6.5 per cent
- Fitness and mind-body – + 4.8 per cent
- Preventive and personalised medicine and public health – + 3.7 per cent
- Traditional and complementary medicine – no exact figures
- Wellness real estate ( centres, clinics, etc ) – + 6.4 per cent
- Spa economy – + 9.8 per cent
- Thermal/mineral springs – + 4.9 per cent
- Workplace wellness programs – + 4.8 per cent
Victoria's Secret parent looks to offload La Senza
L Brands, the parent company of Victoria's Secret, recently announced the closure of the iconic US department store chain, Henry Bendel, following the upcoming festive season. La Senza could also be exiting the L Brands stable as the multinational revealed it would "pursue all alternatives" for the brand billed as "the world's sexiest lingerie at seriously hot deals" to focus on core brands such as Victoria's Secret and Bath & Body Works.
La Senza pulled out of Australia in late 2012. All 19 licensed stores were shuttered, leaving an online store which continues to operate. The brand has 126 own brand stores in North America and 188 licensed international stores. Estimated revenues for La Senza in 2018 are expected to reach $US250 million, with an operating loss of $US40 million.
In August, L Brands slashed its guidance for the second time this year. Victoria's Secret has struggled lately but beauty and regular lingerie sales have shown growth to offset a decline in the revenues of Pink, the sub-brand focused on Gen-Zers and younger Millennials. Bath & Body Works reported double digit growth in same store sales of 13 per cent over the last quarter.
Dior's Joy fragrance boosts bottom line for LVMH
Hiring Jennifer Lawrence has proved a good bet for LVMH. The A-list star is the face of Dior's Joy fragrance and the multinational enjoyed a 14 per cent jump in its perfumes and cosmetics business for the first nine months of 2018, driven by the new release and other Dior stalwarts such as Sauvage, J'adore and Miss Dior. The world's largest luxury goods group has reported a 10 per cent overall revenue increase for the January to September period to 33.1 billion euros ($AUD53.79 billion).
Colour cosmetics and skincare were also bullet performers, notably Rouge Dior lipsticks and the Abeille Royale range from Guerlain. Increased sales in North America and Asia pushed Sephora's sales up 2 per cent. A roaring Q3 built on the success of the first half of the year, posting a 10 per cent increase across categories for the period to 11.4 billion euros ($AUD18.2 billion).
Snippets from the wires
- Scentre Group officially opened its first greenfield development late last week – the $470 million Westfield Coomera on the Gold Coast. Described as "the living centre of the future", the huge complex boasts an iPlay Adventure fun park, a purpose-built recreational park dubbed The Backyard, cinemas and 140 speciality retailers. H&M and Mecca Maxima will join the mix soon.
- Shiseido's recent re-launch of its prestige makeup ranges is designed to lessen the Japanese giant's emphasis on skincare. Over the next three to four years, Shiseido is poised to increase its colour cosmetic offering to 20 per cent of total revenues and fast-track sales to other Asian countries to reach sales of $US1.75 billion by 2020.
- The global haircare market is expected to climb to $US105.3 billion by 2024, predicts Transparency Market Research. The Asia/Pacific region is the largest geographical market with a 33.12 per cent share. Four major multinationals account for 55 per cent of total worldwide haircare sales - Henkel, Procter & Gamble, L'Oréal and Unilever.
- South Korea is also a leader in cosmetic surgery. According to the Asian nation's Ministry of Health & Welfare, close to 50,000 foreigners came to South Korea last year for a nip-and-tuck or injectables, spending $US188.3 million. But that's just a fraction of the 397,882 "medical tourists" that made the journey for general surgery, neurosurgery and dermatology treatments.
- Foreign tourist arrivals to the Asia/Pacific region soared 5.7 per cent in 2017 to 646.3 million, reports the Pacific Asia Travel Association (PATA). An increase of 35 million over the same period 12 months earlier. Australia and New Zealand attracted 50 per cent more additional arrivals. The APAC region registered duty-free and travel retail sales of $US30.8 billion in 2017, adds Generation Research.