Luxasia enters Australia and New Zealand with majority stake in Pacific SMM; Walgreens heads upmarket with minority investment in Birchbox; global travel retail to reach US$120 billion; Estée Lauder reports 16 per cent jump in sales to US$13.68 billion.
Luxasia enters Australia and New Zealand with majority stake in Pacific SMM
Beauty and luxury lifestyle distributor, Luxasia, has cut a swathe through the Asia/Pacific cosmetics and fragrance market, negotiating joint ventures with global heavyweights such as LVMH, Puig, Yves Rocher and Elizabeth Arden. The Singapore-based company has also partnered with more than 150 brands, including La Prairie, Bvlgari, Guerlain, Prada and Hermes, through omni-channel retail, distribution and e-commerce. In its latest strategic move, Luxasia has taken a majority stake in fragrance and beauty distributor, Pacific SMM, to extend its reach to Australia and New Zealand and enlarge its regional presence to 14 countries.
Pacific SMM's 18-brand stable includes the celebrity fragrances of Rihanna, Sofia Vergara, Paris Hilton and Jessica Simpson and the prestige juices of Parfums de Marly, Jason Wu, Kenneth Cole, Chopard and Kate Spade. The company is helmed by Nicholas Gorick, one of Australia's most experienced beauty and fragrance executives, who is well-known to the local industry and beauty media through his high-level positions at L'Oréal Luxe and Cosmax Prestige Brands. Over the past 16 years, he has worked closely with such fragrance heavy hitters as P&G, Beauté Prestige International, Bvlgari, Burberry and Interparfums.
Pacific SMM will be renamed Luxasia Oceania and more skincare and beauty brands will be added to its fragrance-dominated portfolio. By combining Pacific SMM's extensive market knowledge in ANZ with Luxasia's end-to-end distribution and channel management competencies, Luxasia is well-poised to bring its repertoire of beauty brands to the ANZ market speedily and successfully, says Dr Wolfgang Baier, Group CEO, Luxasia.
Walgreens heads upmarket with minority investment in Birchbox
Drugstores and pharmacies stocking premium makeup and skincare isn't a new phenomenon. But the spectacular success of Ulta Beauty, now the largest specialist beauty retailer in the US, has given the trend a massive shot in the arm. In Australia, Priceline recently started ranging Napoleon Perdis and more prestige brands are on the way. Walgreens, the second largest drugstore chain in the US, has upped the ante through the acquisition of a minority stake in Birchbox, the online beauty subscription company.
The beauty category comprises 9 per cent of Walgreens total retail sales and the company has been doing some heavy lifting to expand its higher than sector average performance. Birchbox boasts 2.5 million active customers and will offer 40 new prestige and online-only brands currently not available in the US mass market to Walgreens. The huge retailer already has a Beauty Differentiation program in place in 3000 stores to spotlight exclusive brands and more upscale service. But from December through to early 2019, the chain will roll out Birchbox shops in an 11 store pilot scheme in Chicago, Dallas, Los Angeles, Miami, Minneapolis and New York.
Katia Beauchamp, co-founder and CEO of Birchbox, considers that the new partnership has enormous potential among "casual" beauty shoppers. "She is actually the majority of consumers, representing 70 per cent of the population. While they are interested in beauty, they aren't the ones gazing at influencer tutorials. They like new and exciting, but like to be presented with edited choices". The Walgreens trial stores will also offer subscriptions to Birchbox, test and play areas and more.
Global travel retail to reach US$120 billion
L'Oréal Luxe's recent launch of the Armani Box at Sydney Airport is just one of the many beauty and fragrance extravaganzas popping up in the world's major international airports. Even New York's JFK will embark on a much-needed US$13 billion makeover to grab more of the sales action. According to a report by Generation Research and the European Travel Retail Association, global duty-free and travel retail sales will reach US$120 billion by 2025.
Perfumes and cosmetics are rapidly expanding their slice of the duty-free pie worldwide, says Rene Weber, a luxury goods analyst at Swiss investment bank, Vontabel. Dufry, the world's leader travel retail company, has seen perfumes and cosmetics become its most lucrative category with a 30.7 per cent market share, adds Weber.
The Asia/Pacific region will be the major driver of international passenger numbers over the next 10 years, reveals the ACI World Airport Traffic Forecast. Total international passenger arrivals worldwide are expected to increase to 2.4 billion by 2030, with Asia expected to account for 52 per cent of the growth, followed by Europe (16%), North America (11%), the Middle East (11%), South America (10%) and Africa (2%). Young, urban travellers are having an outsize impact on travel retail sales, says Euromonitor International, and beauty brands will have to invest in more consumer-oriented and digital marketing initiatives to capture their attention.
Estée Lauder reports 16 per cent jump in sales to US$13.68 billion
Estée Lauder has announced two new global leadership appointments following double-digit growth for fiscal 2018. Andrew Ross has been tapped as Executive Vice President, Strategy and New Business Development, and Lisa Sequino has stepped into the role of Senior Vice President, Global General Manager, Becca. Central to our record performance has been our ability to unleash the power of our brand portfolio and our multiple engines of growth, says Fabrizio Freda, President and CEO, and the pure-play beauty giant is committed to keeping up the strong momentum.
There's plenty to build on. Net sales for the Estée Lauder Companies jumper 16 per cent in the financial year ended June 30th to US$13.68 billion. Key brands such as Estée Lauder, La Mer, Origins and Clinique all reported increases in skincare sales. Makeup revenues were buoyed by sales growth from Estée Lauder, Tom Ford and M.A.C.
Fiscal 2018 was an outstanding year for our company, says Freda. “We generated higher sales in every region and product category and gained global share. By investing in our hero franchises, fast-growing channels and digital and social media, we delivered double-digit sales".
Snippets from the Wires
- Supermarkets account for just over 12 per cent of beauty sales in Australia, second only to pharmacies. So-called grocery beauty sales are major news worldwide and growing strongly. UK chain Sainsbury's is significantly increasing its beauty offering. As part of the makeover, 11 speciality beauty aisles will be launched as a test trial across 11 stores, featuring premium brands such as Burt's Bees, Essie, Korres and Dr PawPaw. The Brit icon will also re-launch its 100 SKU own brand cosmetics range and debut fragrances in two stores in a separate test run.
- Asia is the epicentre of the men's grooming boom, especially Korea and China. L’Oréal is partnering with Tmall to create a new men's range for the Chinese market. China's number one online retailer will provide insights to help the French multinational customise products to meet the wants and needs of Chinese men.
- Japanese cartoon character, Hello Kitty, is the second highest-grossing franchise of all time, with estimated retail sales revenues exceeding US$50 billion. Collaborations with ASOS, Puma and surf brand O'Neill are just a few of the recent money-spinning team-ups to swell the coffers of parent company Sanrio. A new 8 SKU skincare and beauty lineup with The Creme Shop, including sheet masks, bath bombs and false eyelashes priced at US$10 or less, will debut at Hot Topic and Riley Rose stores in the US later this month and expand to CVS drugstores in January.
