Unilever invests in Millennial makeup brand; Amazon to enter athleisure market with private label brand; Fenty Beauty, Christian Dior and Louis Vuitton fuel double digit growth for LVMH; and Aussie consumers regain optimism reports Westpac.
Unilever invests in Millennial makeup brand
Unilever bought Hourglass, the high-performance luxury colour cosmetic brand, for an undisclosed sum at the tail end of June. As we reported recently, the makeup category is enjoying explosive growth in all markets and the Asia/Pacific region is poised to overtake the US as the dominant player. Unilever Ventures, the multinational's investment arm, has led other institutional heavyweights, including American Express, in a $US3 million seed funding round for US cosmetics brand, Beauty Bakerie.
The fast-growing indie star was founded in 2011 by American Millennial, Cashmere Nicole, and the bakery-inspired line is now sold in over 100 countries, including the US, Canada, the UK and Brazil. A digital native brand with an Instagram following of more than 400,000, Beauty Bakerie will use the funding to expand its product offering and promotional activities. Through to the end of the year, the brand will launch in 10 doors of Forever 21's new Riley Rose chain in the US, Sephora stores in Southeast Asia, 40 Wojooh stores in the Gulf States and on the QVC home shopping network in the UK. Unilever is also buying into the "diversity of beauty" message because of Beauty Bakerie's amazing shade range and popularity with young African-American women.
According to Anna Ohlsson-Baskerville, Director of Unilever Ventures: "We have been impressed by Beauty Bakerie's e-commerce-led model and consistent digital growth, as well as the strong engagement of the brand's Millennial consumer base".
Amazon to enter athleisure market with private label brand
Amazon has a history of developing private label brands such as Scout + Ro, Goodthreads menswear and Paris Sunday, a young women's range exclusive to Amazon Prime members, to fill gaps in its inventory and to send a warning shot to companies who are reticent to sell their full range through the e-commerce giant. Bloomberg reports that leading Taiwanese manufacturer Makalot Industrial, who make clothing for Uniqlo and Gap, and Taiwan's largest textile company, Eclat, who supply Nike, Lululemon and Under Armour, have begun sending shipments to Amazon for a private label athletic apparel brand.
The global athleisure market is still growing strongly, but new brands have really put the pressure on market leaders such as Nike, Lululemon and Under Armour through fierce discounting. News that a global competitor like Amazon was gearing up to flog own-brand yoga pants and the like prompted slumps in the share prices of the Big Three. Earlier this year, Amazon hired Kirsten Harris as senior brand manager for Amazon athletic apparel, a veteran of Zella activewear and Nike.
Fenty Beauty, Christian Dior and Louis Vuitton fuel double digit growth for LVMH
LVMH shares soared to a record high last week following higher-than-expected Q3 results for the world's largest luxury goods group. All divisions reported double digit growth, pushing revenues to US35.4 billion for the first nine months of the years – Perfumes and Cosmetics (+14%), Fashion and Leather (+14%), Watches and Jewellery (+13%) and Selective Retailing, including Sephora, (+12%).
Total Perfume and Cosmetics sales for the January to September period reached $US4.7 billion. LVMH reported that Fenty Beauty, distributed exclusively through Sephora, got off to "an exceptional start". Christian Dior was another power performer through the launch of Miss Dior EDP, the J'adore and Sauvage fragrance franchises and the Rouge Dior lipstick line. Sephora's organic revenue growth was propelled by new store openings worldwide, including Australia, the renovation of existing stores and online sales.
Aussie consumers regain optimism reports Westpac
Almost everything is over-analysed these days from capital city housing markets to temporary slumps in consumer spending. Ups and downs caused by human nature and well-known seasonal habits rarely feature as "explanations" in such earnest reports. The beauty industry, for example, has known for years that people get out and about more during summer and want to look better as they bare more flesh, which is why 60 per cent of new product launches hit the shelves between September and March.
There's been a recent spate of poor spending figures over the winter months. But the arrival of Spring has yet again made Australians more likely to loosen their purse strings, says the Westpac-Melbourne Institute Consumer Sentiment Index. A jump of 3.6 per cent in October pushed the index to its highest level in a year, marking the first time optimists have outnumbered pessimists since last November. Consumer confidence has risen by over six per cent in the past two months. According to Westpac chief economist Bill Evans, the welcome boost is consistent with an improving global economy, less concern over a rise in interest rates because of heated house prices and strong employment gains.
Snippets from the wires
- Like Sephora, H&M entered the Australian market three years ago. The fast fashion giant will shortly expand its network to 25 stores, following the opening of Stockland Townsville on October 19th, Stockland Rockhampton on November 2nd and the Canberra Centre on November 23rd.
- Coach has been trying to regain its lustre with acquisitions such as Kate Spade and shoemaker Stuart Weitzman. The US bag maker has also revived its fragrance fortunes with licensee Inter Parfums via last year's new signature scent for women and the recently launched Coach Man. To reflect its multi-brand status, Coach Inc has announced a corporate name change to Tapestry Inc, to come into effect on October 31st. Social media posts have been scathing and the company's share price dropped three per cent on the news.
- French fashion mag L'Officiel came and went in Australia. But the Jalou Media Group have announced the launch of L'Officiel USA. Firstly, with an international digital platform to debut on November 6th. A print edition is scheduled to launch in February next year.
- Dupes can be damaging. Coty has been awarded $US6.5 million in damages against Excell Brands, a US company selling copycat fragrances through major retailers such as Kmart and Amazon in the US. Products such as Serenity and Possession mimicked Calvin Klein Eternity and Obsession. Following a three year battle, a New York judge concluded the case with the classic line – "Imitation may well be the sincerest form of flattery, but if taken too far it can also be costly".
- Pfizer CEO Ian Read has hinted that the US drugmaker is looking to sell its consumer health division, which includes ChapStick. A sell-off that could net as much as $US14 billion. Major players such as Nestlé, Bayer and Johnson & Johnson have been fingered as the most likely interested parties.
