Amazon and Yoox both rumoured to be in talks with Net-A-Porter, Gal Gadot tapped as new face of Gucci Bamboo fragrance, USFDA issues major warning against common claims, and bloggers key to reaching multicultural consumers.
Amazon or Yoox? Rumours that both are in talks with Net-A-Porter
Prestige e-tailer Net-A Porter has a market evaluation of around US$1.6 billion. But even though it is one of the fastest-growing companies for luxury giant Richemont, the UK-based company has yet to turn a profit. Two years ago, the company was said to be in sales talks with Yoox, the Italian online retailer, which has a similar market cap but is profitable. But Net-A-Porter founder Natalie Massenet was reluctant to sign-off on the deal.
Last week, two major rumours started swirling. WWD reported that Amazon was in talks to buy Net-A Porter to extend its reach to the luxury e-tailer's 2.5 million visitors-a-month audience. Amazon CEO Jeff Bezos has long made the online giant's interest in high fashion common knowledge. Three years ago, he told The New York Times that the company was tempted by the much higher gross profit per unit price tags of luxury fashion.
Following its foray into prestige beauty, fashion is now Amazon's fastest-growing category. The e-commerce giant has also hired a former editor at Vogue US to oversee its fashion site and will sponsor men's fashion collections in New York later this year.
Then came the news that a possible revival of the deal with Yoox could be in the offing. Both companies are pulling in major revenues - 700 million euros ($983.5 million) for the last fiscal year for Net-A-Porter and 524.3 million euros ($736.7 million) for Yoox. A combined company would be in a far stronger position to take on Internet rivals and beat off more intense competition from the world's big name department stores such as Saks Fifth Avenue, House of Fraser and Neiman Marcus.
One thing that is hard to dispute is that Richemont, which makes most of its money from high-end watches and Cartier and Van Cleef & Arpels jewellery, is looking for a buy-out or a merger.
Gal Gadot tapped as new face of Gucci Bamboo fragrance
It's amazing that Gucci has taken so long to name a fragrance after its iconic bamboo bag. But Gucci Bamboo begins its global roll-out in July and the woman fronting the ads will be Gal Gadot. Chequered career doesn't quite do justice to the 29 year old Israeli actress. She first hit the headlines as Miss Israel in the 2004 Miss Universe contest and became a firm favourite with males worldwide as the tough-but-sexy Gisele Yashar in the Fast & Furious movies. To further cement her feisty image, Gadot has also signed to play Wonder Woman in Zack Snyder's up-and-coming blockbuster, Batman Vs Superman: Dawn of Justice.
With ingredients such as Casablanca lily, ylang-ylang, Tahitian vanilla and amber, the new juice sounds as enticing as its namesake bag. First produced in 1947, Gucci craftsmen were tasked with finding a material that wasn't rationed following World War II to incorporate into their designs. Bamboo could be freely imported from Asia and Gucci invented a patented process to heat and shape the bamboo so it would retain its shape when the handles were fixed to bags. A huge hit for decades, famous fans have included Princess Diana, Naomi Watts and Beyoncé.
USFDA issues major warning against common claims
The issue of whether major beauty brands cross the line between drug and cosmetic claims has been simmering for decades. From time to time, the US Food and Drug Administration (USFDA), the de facto global watchdog of the beauty and personal care industry, sends letters to specific companies when they over-step the mark or issues blanket warnings to the entire industry.
In a new consumer update, the USFDA has singled out hair, skincare and eyelash claims which have moved outside legal requirements for cosmetics. Under US law, a cosmetic is a product designed "for cleansing, beautifying, promoting attractiveness, or altering the appearance". A drug is "a product intended for use in the diagnosis, cure, mitigating treatment, or prevention of disease" or "intended to affect the structure or any function of the body".
Common skincare claims targeted by the USFDA update include many that are taken as read by beauty editors worldwide such as the ability to increase the production of collagen and elastin, the two major structural proteins in the skin, to make it appear firmer and more elastic. Also under fire are products that claim to reduce inflammation, regenerate cells, prevent facial muscle contractions, boost the activity of genes or offer the same results as injections or surgery.
According to Linda M. Katz, director of the USFDA's Office of Cosmetics and Colors, there's been a huge rise in the number of unlawful claims on the Internet and product packaging over the past few years. "You walk into a store and see shelves of wonder products," she says. "If they are going to make drug claims, the products must be evaluated as drugs. If a product seems too good to be true, it probably is."
Bloggers key to reaching multicultural consumers
Beauty brands have long used multicultural and multi-racial spokesmodels. But the impact of - as the Americans say - minority bloggers has been under-reported. In Fashionista's 2015 list of the world's 20 most powerful personal style bloggers, half represent at least one minority group.
The US blogger database Fohr Card reports that 31% of its top 100 fashion influencers are Asian, Hispanic or black. "Brands are finally waking up to the importance of speaking to that side of the consumer base," says Fohr Card founder James Nord. "Oftentimes, the best way to do that is working with an influencer". It's a trend that's equally strong with beauty bloggers in the US and Australia, as the buying power and recognition of the needs and wants of different multicultural groups has soared.
Snippets from the wires
- Milan is hosting EXPO 15 which opens on May 1st. To take advantage of the fact that many visitors won't be in the market for the high-end clobber the Italian fashion capital is famous for, L'Oréal has opened a boutique solely dedicated to the L'Oréal Paris brand.
- Since launching three years ago, The Dollar Shave Club has become a minor force in the men's shaving market. In 2014, the company boasted sales of US$65 million and shipped 62 million razor cartridges. With 1.7 million members, the start-up is moving into the haircare space with the Boogie's lineup of styling products from gel to paste.
- Actress Jordana Brewster of Fast & Furious franchise fame is the new face of Pond's US, mainly to spruik its new Rejuveness Anti-Wrinkle Cream.
- Australians have really embraced smart TVs, reports Nielsen. In one of the fastest uptakes in the world, 30% of Aussie homes now have a smart TV. Internet penetration is now stable at 80%, says the researcher. Close to 73% of Australians now own a smartphone and 47% of homes have tablets.
- Got a start-up or small beauty brand to export? Superdrug, the UK equivalent of Priceline, is holding its first-ever Open House event in London on April 29th to attract new brands and suppliers. Instead of battling to get noticed or cold-calling, companies can contact SuperdrugOpenHouse@z-pr.com for more information.
- P&G is rumoured to be considering a spin-off of its beauty brands as a separate division. Whatever happens in the future, the multinational has announced it will invest US$300 million in a new beauty innovation centre in the US.
Images: Net-a-porter.
