P&G sells Frederic Fekkai, Lucky Magazine goes quarterly as sales of US glossies decline, Beautycounter triples annual growth, and fragrance proves a weak spot for Arden and Coty.
P&G sells Frederic Fekkai
Hopes were high in 2008 when P&G bought the Frederic Fekkai haircare brand and salons from private equity firm Catterton Partners for over US$400 million. The terms of the new deal were not disclosed but the rumour mill says the purchase price could be as low as US$50 million. Mainly a US-based brand, the total Fekkai business has 225 employees, primarily stylists and salon workers.
The new buyers are UK-based Designer Parfums and LUXE Brands, who formed a new joint venture to make the acquisition. The Designer Parfums stable includes Jean Patou, Ghost and Aigner fragrances. LUXE Brands signed a lucrative deal with singer Ariana Grande earlier this year and the debut scent will launch globally in September. Both companies are subsidiaries of Shaneel Enterprises.
Investment bankers are working hard to find buyers for other P&G brands, including Wella Professionals, the Clairol salon haircare division and a clutch of designer fragrance brands from the P&G Prestige portfolio. The next few months should see a regular rollout of sell-offs from the multinational.
Lucky Magazine goes quarterly as sales of US glossies decline
Shopping magazines don't have the allure they once did. Lucky, the magazine that kick-started the global trend, is switching from a monthly to a quarterly. Sales plummeted 47.2 per cent in March alone and 14 staff members will be handed pink slips. Rumours are also rampant that the magazine will be sold off before the new format September issue appears on the newsstands. Lucky, once wholly-owned by Conde Nast, became a joint venture with e-commerce start-up, Beachmint, last year.
Lucky wasn't the only unfortunate US publication in March. Nearly all the major glossies suffered double digit drops in circulation - Elle (down 24.9 per cent), Cosmopolitan (down 23.6 per cent), Marie Claire (down 20.4 per cent), Glamour (down 20.2 per cent) and Vogue (down 11.2 per cent). Men's prestige titles also posted major drops - Esquire (down 12.3 per cent) and GQ (down 11.7 per cent). The only major glossy to flatline was Harper's Bazaar, which saw a slight increase of 0.8 per cent, leading WWD to advise publishers to choose Rihanna as a cover girl more often.
Beautycounter Triples Annual Growth
Last week we reported that Younique, the all-natural direct seller, was gearing up for global expansion. Beautycounter, which launched a year later in 2013, also specialises in environmentally-minded cosmetics. But, unlike Younique which pioneered direct-selling through social media, founder and CEO, Gregg Renfrew, stuck with the selling style that elevated and into major players.
In spite of the confusing first name, Ms Renfrew started the company after seeing Al Gore's documentary, An Inconvenient Truth. Although the company sells its all-natural, free-from products online, representatives hold parties and work on commission to introduce customers to bestsellers such as Dew Skin Tinted Moisturizer.
Private equity firm, TPG Capital, which owns e.l.f cosmetics, bought into the fledgling company in late 2014. Beautycounter now has 8600 direct selling consultants and has sold one million skincare products since its launch. Sales grew 325 per cent in 2014 and the company is on track to sell two million units by the end of this year. Gwyneth Paltrow is a fan and sells Beautycounter products on her lifestyle site, Goop.com.
Fragrance Proves A Weak Spot For Arden and Coty
First the good news. Sales of Elizabeth Arden-branded products rose 3 per cent in the third quarter reports the heritage brand. But celebrity and designer fragrances from major names such as Britney Spears, Hilary Duff, Elizabeth Taylor and Juicy Couture slumped 18 per cent. Arden's North American sales dipped 12 per cent but results from international markets were much better - with net sales declining by only 6 per cent. Adjusted sales for the period were US$191.4 million - a drop of 9.4 per cent in contrast to the same period last year. CEO Scott Beattie is more optimistic for the fourth quarter, fingering growing skincare sales, particularly in Asia, and new distribution strategies.
The , Rimmel London and Sally Hansen brands stayed strong for Coty in the third quarter. But the multinational's revenues were flat at US$933.8 million. Colour cosmetics were a highlight - increasing 6 per cent - but new fragrance launches couldn't make up for declines in sales of established scents - falling 2 per cent.
Sales growth in Australia, Korea and Southeast Asia couldn't make up for a decline in China and Coty's Asia/Pacific sales fell 2 per cent. Growth in the Americas spiked 5 per cent with an upsurge of revenues in the US and Coty's partnership with Avon in Brazil. Future results are expected to be boosted by the recently acquired Bourjois brand from Chanel and the multinational's "efficiency programs".
Snippets from the wires
- In the UK, PIPCU (The Police Intellectual Property Crime Unit) has launched an awareness campaign about the dangers of counterfeit beauty products called - Wake Up - Don't Fake Up. The problem has escalated across Europe. Over the past 18 months, PIPCU has closed down 5500 websites flogging fake fashion and beauty goods and seized $7 million worth of knock-offs. In 2013, EU Customs reported that it seized one million counterfeit fragrance and beauty products.
- A few years ago, plant stem cell skincare was all the rage. It still is says Mintel. The percentage of new global launches containing plant stem cells has tripled form 1 per cent in 2010 to 3 per cent in 2014. Asia is the sweet spot with South Korea accounting for 11 per cent of skincare launches featuring plant stem cells, followed by Japan at 11 per cent.
- No prizes for guessing that Coca Cola trumped the competition yet again in the latest annual Brand Footprint study from the Kantar Group. The UK market researcher analyses and ranks 11,000 global brands and Coke easily took out the top spot with 5.7 million consumer reach points. Colgate ranked second and Lifebuoy soap filled the fourth slot. But the fastest-growing brand in the top 10 was
, which moved up three spots to the number nine position.
- Printemps, the storied French department store chain, is celebrating 150 years of selling fragrances. From May 16th to June 20th, 11 window displays curated by top nose, Francis Kurkdjian, will entice visitors into the Printemps flagship store on Boulevard Hausmann in Paris. Featured fragrances include Miss Dior, Shalimar from Guerlain, Roget & Gallet Jean Marie Farina cologne, Caron Pour Un Homme and Yves Saint Laurent Opium. From this Tuesday to July 10th, perfume experts from , Lancôme , Giorgio Armani and more will offer fragrance workshops, talks and events.
- According to US Harper's Bazaar, fashion and beauty brands are spending more than US$1 billion a year on sponsored Instagram posts. Elite bloggers who have acquired more than six million followers can ask for between US$20,000 and US$100,000 a post. No wonder it's become so tempting to buy followers.
Image: Instagram.com/luckymagazine
