New directions boost Beiersdorf, Kering considers Puma sell-off, halal beauty fourth largest global market, and quarterly results for Revlon, L'Occitane, Avon and Church & Dwight.
New directions boost Beiersdorf
again proved the major growth engine for Beiersdorf. The German-based multinational, who also own and Eucerin, beat analysts estimates for Q3. Global sales climbed 6.8 per cent to 5.035 billion euros (AUD$7.67 billion). Strong areas of growth were eastern Europe - up 7.3 per cent - and South America - up 13 per cent.
Apart from new skincare products launched overseas such as Nivea Anti-Wrinkle Serum Pearls, Beiersdorf is also challenging and Schick in the women's razor market. The multinational test-marketed the Nivea disposable razor in Austria in February and Germany in September. According to Beiersdorf CEO, Stefan Heidenreich, the razor has sold so well it is poised to knock off Gillette Venus in both markets. A glittering prize indeed. According to Euromonitor, Gillette controls 54 per cent of the global market for women's razors and Schick accounts for 22 per cent.
Heidenreich says that Beiersdorf expects to expand beyond disposables but will keep the focus on women's razors. The company has bullishly raised its forecast for 2015 and expects global sales to increase by 3 to 4 percent for the remainder of the year.
Kering considers Puma sell-off
The athleisure and well-being trend isn't a licence to print money. Nike might be buoyed by its women's sportswear business but rival sporting good giant Puma has posted flatlining sales for the past four years. Collaborations with Usain Bolt and Italian soccer star Mario Balotelli have lifted sales over the past 18 months. But Kering, the luxury goods group that also owns Gucci, is considering a sale of its majority stake in the German mega-brand.
Kering, then called PPR, bought control of Puma in 2007 in a deal that valued the sports manufacturer at 5.3 billion euros (AUD$8.08 billion). Way back then, luxury goods companies were looking to expand their reach and revenues by hitching a ride on the athleisure trend. Designers such as Stella McCartney and Alexander McQueen linked their fashion chops to major sports brands such as Adidas. John Varvatos, the US menswear designer, boasts the longest-standing partnership in footwear - a 14 year licensing agreement with Converse.
Francois-Henri Pinault, Kering's CEO, also added other sports-oriented brands to the group's stable and predicted that by 2020 the sporting goods division would generate annual sales of 9.6 billion euros (AUD$14.6 billion). An ambitious plan that has been de-railed as Puma's global sales have remained static at 3 billion euros (AUD$4.57 billion) since 2011.
Kering contacted potential buyers for Puma last year, notably from Asia and the Middle East. The group has sold off several underperforming businesses over the past decade, including French department store chain Printemps. Analysts are predicting that Kering is likely to sell off Puma in the second half of 2016 in a deal valued as high as US$4.4 billion. In the meantime, executives will be going all out to boost Puma's performance before the group returns to focusing solely on luxury.
Halal beauty fourth largest global market
Nearly a quarter of the world's population is Muslim and the demand for halal beauty is soaring according to the 2015 Global Islamic Economy Summit. A new report from the Dubai government reveals the global Muslim market represents a combined beauty and personal spend of US$46 billion. The fourth largest market in the world after the US, Japan and China. The Middle Eastern market is growing so fast that major Western companies, including , are manufacturing exclusive fragrances to be sold in the Gulf region.
No prizes for guessing that the United Arab Emirates (Dubai, Abu Dhabi etc) has the highest regional expenditure at US$4.9 billion. Turkey ranks second at US$4.4 billion, followed by India (US$3.5 billion), Russia and Indonesia (both at US$3.4 billion) and Malaysia (US$2.6 billion).
The growth in halal beauty is also having a huge effect on R&D investment in the organic, vegan, vegetarian sector. As we reported recently, the Polish brand Inglot invented the world's first "breathable"nail polish - O2M - for women seeking a more natural alternative. The company later discovered that the health benefits of moisture and oxygen passing through the enamel also allowed Muslim women to wear the revolutionary formula during prayer because it conformed to religious guidelines. Inglot recently announced a global expansion over the next five years, including 220 new stores in the Gulf region.
Iran's beauty and personal care market is the seventh largest market in the world says Euromonitor. Sales are expected to triple over the next five years. Sephora is leading the charge and has announced plans to open seven stores in Iran next year.
Quarterly results for Revlon, L'Occitane, Avon and Church & Dwight
First the good news. Increased net sales of colour cosmetics and hair colourants boosted Revlon's Q3 results in the US by 4.6 per cent to US$255 million. International sales didn't fare as well with a drop of 5.3 per cent to US$216 million. But CEO Lorenzo Delpani declared the quarter's results to be strong, in spite of a total sales slip of 0.2 per cent. In addition to the core brand, Mitchum deodorants, professional haircare ranges and the American Crew men's grooming brand also helped to buoy sales, especially overseas.
was battered by a strong US dollar and sluggish sales in North and South America, notably Brazil. The direct seller reported that net sales slumped 22 per cent in Q3 to US$1.7 billion. Revenues were down 16 per cent in the Asia/Pacific region to US$146.2 million. But South America dropped 26 per cent to US$790.9 million and 17 per cent in Nrth America to US$230.6 million.
helped to push Church & Dwight to better-than-expected Q3 results. The multinational's sales of speciality products rose 2.9 per cent to US$80 million. Domestic consumer sales rose 4.7 per cent to US$656.4 million. Overall company profits increased to US$120.4 million, up from US$115.9 million for the same period last year. But analysts warned that Church & Dwight could face increased competition in its core areas from a re-focused P&G.
The drop in Mainland Chinese tourists to Hong Kong and Macau dented 's profits. Global sales for the French prestige chain were up 12.5 per cent year-on-year to US$605 million from March through September. But global disruptions and higher taxes combined to push profits down by 40 to 50 per cent.
Snippets from the wires
- It's months away but there is already a big build-up to the second edition of in-cosmetics Korea. The trade show will open its doors from 6th to 7th July in Seoul next year. Organisers are already expecting a 50 per cent increase in visitors to 4000 and French companies will unveil the first French Pavilion. South Korea has the highest per capita use of skincare in the world.
- Selfridges is in the middle of a 300 million pounds ( AUD$641 million) renovation of its Oxford Street flagship store in London - due for completion in 2018. The storied UK retailer also opened the Denim Studio, the largest denim space in the world. Owned by Canadian entrepreneur, Galen Weston, the Selfridges Group has announced the buy-out of Arnotts, one of Ireland's oldest department stores. The Dublin stalwart joins Brown Thomas, Canada's Holt Renfrew and de Bijenkorf from the Netherlands in the Selfridges stable, where sales spiked 4.3 percent to January 2015 to AUD$2.77 billion.
- Gen Y now has the edge in numbers over Baby Boomers says IBISWorld - just. Out of the nation's current population of 24 million, 26.5 per cent are Gen Y, 26 per cent Baby Boomers and 21.7 per cent Gen X. "Silents", a.k.a those aged 73 to 90 represent 7.2 per cent of the population and Gen Z - 14 years and under - 17.8 per cent.
- Falling ad revenue continues to blight Conde Nast's print business in the US. As the publisher moves to a more digital future, seven staff have been laid off from the US edition of GQ magazine. More staff cuts will follow across the stable with Glamour rumoured to be next in line for "trimming".
Image crop: @hudabeauty
Newsletter image: Instagram.com/Puma
