Henkel buys Joico maker for $US485 million; The Hut Group secures $AU886 million with an eye to more beauty buyouts; Affluencers - IPSOS fingers new purchase drivers; and Australia's social media obsession.
Henkel buys Joico Maker for $US485 million
Most beauty fans are more familiar with the brands of Zotos International. The wholly-owned subsidiary of Shiseido is the parent company of Joico, AGEbeautiful, ISO and Bain de Terre, one of the first spa-inspired haircare brands. Founded in 1932 and acquired by the Japanese giant in 1988, US-based Zotos operates worldwide and offers a full range of professional haircare, texture services and hair colour products. Global sales reached $US230 million in fiscal 2016.
Zotos has become one of the fastest-growing, medium-sized companies in professional haircare over the past three decades. But Shiseido has decided to concentrate more on Asia and its VISION 2020 expansion strategy, especially in mass and prestige skincare and personal care. Henkel, the German multinational and manufacturer of Schwarzkopf, has agreed to buy Zotos International for $US485 million, with the deal closing in December.
The US is the world's largest single professional haircare market and Henkel has been beefing up its presence for some time. In 2014, the company acquired three US haircare companies –Sexy Hair, Alterna and Kenra. In March this year, Henkel strengthened its position in South America and the US with the buy-out of Nattura Laboratorios, the parent company of Pravana and Tec Italy with annual revenues of $AU151 million.
The Hut Group secures $AU886 million with an eye to more beauty buyouts
Estée Lauder, Unilever and L'Oréal are just a few of the key multinationals who have embarked on corporate shopping sprees in recent years. British-based The Hut Group doesn't play in the same financial league. But the fast-growing online retailer has upped its investment ante by securing an $AU886 million revolving credit facility earmarked for infrastructure development and more beauty acquisitions in a bid to springboard "significant international growth".
The recent buyouts of ESPA, Illamasqua, Glossybox and Aussie online retailer RY.com.au were all acquired after The Hut Group raised $US200 million in funding from major investors, including US private equity heavyweight BlackRock, in early 2016. But banks are the main backers this time and the list includes some of the biggest names in finance – HSBC, Citibank, Barclays, JP Morgan and Santander.
This year has seen a real acceleration in investment for The Hut Group, confirms Founder and CEO, Matthew Moulding. The company currently trades across 140 websites and 30 currencies, with international sales accounting for 73 per cent of overall sales.
Affluencers - IPSOS fingers new purchase drivers
We're seeing a spate of new labels attached to age-old habits and practices. The Gig Economy is simply another way to say working part-time. Breadcrumbing is a lot easier these days because of technology, but countless relationships have been put on hold and sustained by random letters or papyrus scrolls over the centuries. It's also a longterm custom for wealthier people to be friendly with others whose bank balances are similar to their own.
One of the main issues with followers on Instagram and other social media is that there's little demographic and income level information. The IPSOS Affluent Survey reveals that so-called Affluencers represent 71 per cent of affluent consumers with an annual household income of at least $US125,000. More importantly, this target group have a major impact on the shopping and buying behaviours of others.
According to the market research company, Affluencers not only play a major role in the luxury market, their opinions and influence are felt across every purchasing category. They also buy more than general Affluent consumers who represent about 16 per cent of the population in wealthier countries like the US and Australia. We've witnessed the importance of micro-influencers on purchasing behaviour. Affluencers take this approach to the next level for marketers, says IPSOS, because brands have it both ways. A core group that buys a lot, in addition to giving advice.
The Stats - Australia's social media obsession
There are still plenty of holdouts but Australians are obsessed with social media. According to the latest September data from SocialMediaNews.com.au, the top 10 platforms are head-and- shoulders above the rest. A high percentage of the Chinese community in Australia also use Chinese social media such as WeChat (2.75 million monthly active users), RenRen (60,000 monthly active users) and Weibo (30,000 monthly active users)
- Facebook - 17 million monthly active users
- YouTube - 15.7 million UAVs
- WordPress.com - 5.5 million
- Instagram - 5 million monthly active users
- WhatsApp - 4.8 million monthly active users
- LinkedIn - 4.2 million monthly active users
- Snapchat - 4 million daily active users
- Tumblr - 3.8 million monthly active users
- Twitter - 3 million monthly active users approx
- Tinder - 3 million users approx
Snippets from the wires
- Australia, Africa and Asia were strong growth markets for Beiersdorf in the first nine months of the year. The German multinational's global sales jumped 4.9 per cent to $US6.22 billion. Revenues for hero brand Nivea climbed 3.7 per cent and La Prairie continued to be a power performer with a sales spike of 13.5 per cent.
- Dubai-based Huda Kattan, Instagram's wealthiest influencer, launched her cosmetics brand Huda Beauty in 2013. Sales are expected to reach $US200 million by the end of the year. But Kattan wants to take the brand to the next level and has hired Financo, the US boutique investment bank, to seek out a private equity investor keen to buy "a very small stake" in her eponymous brand.
- China and Brazil delivered double digit growth of 22.7 per cent and 13.5 per cent respectively for L'Occitane en Provence over the six months to September 30th. The prestige French beauty chain's global sales for the period lifted to $AU828.55 million.
