Kylie Cosmetics to make first bricks-and-mortar move; Indie Beauty Expo expands to London and Berlin; 2018 set to be a record year for beauty buyouts; Fast work - More consumers want instant beauty products.
Kylie Cosmetics to make first bricks-and-mortar move
It's been a landmark year for Kylie Jenner. The 21 year old hit global headlines recently when Forbes estimated her net worth had reached US$900 million. Yet only three years has passed since the launch of the first products under the Kylie Cosmetics banner – matte liquid lipstick and the sell-out Kylie lip sets. In a move that analysts are predicting will help Jenner to achieve billionaire status, Kylie Cosmetics will debut in Ulta Beauty stores in the US for the holiday season.
Like many other startup brands, Kylie Cosmetics is moving from online-only to bricks-and-mortar to springboard further growth. The exclusive partnership is also a major coup for Ulta Beauty, the number one specialist beauty retailer in the US, who will offer the white-hot brand just before Black Friday, Cyber Monday and the Festive Season.
Last week, Ulta reported that net income for its second quarter rose 29.9 per cent to US$148.3 million and the company opened 19 more stores across the US during the period. Net sales spiked 15.4 per cent to US$1.49 billion and e-commerce sales shot up 37.9 per cent to US$132.8 million. Although Ulta sells both prestige and mass brands, CEO Mary Dillon told analysts that such rapid growth presented even more of a threat to Sephora.
Indie Beauty Expo expands to London and Berlin
Australia's Inika and Black Chicken Remedies and New Zealand's Triumph & Disaster brands were among the 250 exhibitors at the Indie Beauty Expo held in New York from August 22nd to 23rd. The US has been the epicentre of the niche brand boom and the first Indie Beauty Expo debuted in 2014. LA and New York are the focal points of the indie beauty revolution and hold events in January and August each year. But Dallas is also on the calendar for any startups wanting to appeal to the vast south-western market in the US and May is the month to book your space or tickets.
The inaugural London Indie Beauty Expo will be held at the Old Truman Brewery in the city's East End on October 24th and 25th. While the first Berlin Indie Beauty Expo is slated for March 22nd and 23rd 2019. Entry to all events on both sides of The Pond is open to media, influencers, beauty professionals, cosmetic buyers and retailers interested in gaining a helicopter view of established or up-and-coming niche brands. Go to www.indiebeautyexpo.com
2018 set to be a record year for beauty buyouts
With the global beauty business centred in the Northern Hemisphere, August is a quiet time for beauty acquisitions as senior executives and owners head off on vacation. But with three months still to go, 2018 is shaping up to be a record year for buyouts, says investment banking firm, Alantra. In the second quarter of the year alone, a total of 41 deals were completed in the beauty and personal care industries worldwide.
Things really started to hit fever-pitch in 2015, notes Alantra, when the number of acquisitions escalated to 85 for the year. By contrast, immediately preceding years recorded 40 to 50 buyouts. There are two major reasons behind the phenomenon and the main one is the nature of the industry itself.
The personal care and beauty industries are dominated by a large number of multinationals such as Unilever, P&G, L'Oréal, Coty and Estée Lauder, and they have been cementing their position by acquiring brands that strategically fit their portfolios or will extend their chops in fast-growing areas. For all the hoopla surrounding the explosion of niche brands, only 19 multinational companies account for 90 per cent of global beauty sales.
Beauty has also become a target for private equity firms because the industry offers products with proven brand loyalty, high gross margins and a history of repeat purchases. Leading companies like TPG and L Catterton, the investment arm of LVMH, have made beauty a speciality area and are scouring the world for high growth brands. The growth of e-commerce and social media still has enormous potential to grow brands globally, so acquiring beauty and personal care brands is a smart strategy for investors. There's been a big move to acquire natural and organic brands, adds Alantra, and this trend will continue well beyond the end of the year.
Fast work - More consumers want instant beauty products
Blame it on the Internet but attention spans have imploded from minutes to seconds. Even articles tagged – a 5 minute read – are often bookmarked for later these days. In the beauty world, Foreo's UFO Smart Mask has become a global bestseller because it promises to produce similar results to a face mask needing 20 minutes to do its job in 90 seconds.
Kline & Co's new digital tracking service, Amalgam, reveals that many of the beauty and personal care products released in the first and second quarters of the year had second or minute times in their names. New face mask launches dominated the instant action contenders. Popular entrants included Clean & Clear Deep Action 60 Second Shower Mask, Dior Capture Totale Dreamskin 1 Minute Mask and Origins Out of Trouble 10 Minute Mask to Rescue Problem Skin.
In the US-based survey, Aussie 3 Minute Miracle Moist retained its number two position in hair treatments. Other hot buys included Lancome Visionnaire 1 Minute Blur, Trish McEvoy Jumbo Instant Eye Lift and GlamGlow Instamud 60-Second Pore Refining Treatment. It's interesting to see that 60 second and one minute are both used. Maybe the seconds timing just sounds quicker.
Snippets from the Wires
- Travel retail has become a game-changer for many beauty brands. DFS and L'Oréal have debuted the world's first airport store for NYX Cosmetics at New York's JFK Airport. More than 2000 products will entice travellers, in addition to the Beauty Bar, an interactive makeup station, and an Instagram Trending Wall.
- David Jones ramped up the battle for exclusives recently when the prestige department store chain withdrew Country Road, Mimco and Politix concessions from Myer stores. Last week, Myer announced it would be the exclusive department store partner for Aesop. The prestige skincare brand is now available in 11 Myer stores and online and will role out to two more counters at Myer Chermside and Maroochydore before the end of the year and Garden City in Perth early next year.
- Beauty products based on snail mucus have scored an avalanche of clickbait headlines worldwide over the past couple of years. But it's no passing fad, reports Coherent Market Insights. Over the next seven years, the global snail mucus beauty sector is estimated to grow by 10.8 per cent CAGR to US$795 million a year. A K-Beauty favourite, the Asia/Pacific region accounts for the lion's share of sales.
- Unilever launched Love Beauty and Planet, its first new mass market skincare brand in 20 years, in the US early this year. The vegan-friendly range has now rolled out in the UK with hopes of a global launch. Millennial and Gen Z consumers are fuelling the vegan beauty market, says Research and Markets, and estimates global sales will top US$20.8 billion by 2025.
