Ardent Leisure sells Goodlife Health Clubs for $260 million, more Aussies become vegetarians, Melbourne Airport to increase retail space by 30 per cent, and sales up as Coty suffers net loss in Q4.
Ardent Leisure sells Goodlife Health Clubs for $260 million
The Rio Olympics have probably prompted many armchair athletes to spring into action. If so, the future of Goodlife Health Clubs, one of the largest gym networks in Australia, looks good. Owner Ardent Leisure has signed a $260 million deal to sell the lucrative business to Quadrant Private Equity, one of Australia's top-performing private equity firms. Quadrant also took a stake in St Ives, the Western Australian healthcare business, in July, valuing the company at $300 million.
Consisting of 76 clubs with more than 200,000 members, Goodlife Health Clubs is expected to earn $30 million over the current financial year. But that's small beer to Ardent Leisure, which is positioning itself as a global entertainment company.
Deborah Thomas, the much-respected former editor-in-chief of the Australian Women's Weekly, is now the CEO of Ardent Leisure. The fast-expanding business operates the Dreamworld theme park on the Gold Coast, the AMF bowling business and 27 Main Event centres in the US, mainly located in Texas.
The Goodlife sell-off also includes Hypoxi, Ardent's exercise equipment business. According to Thomas: "The divestment of the Health Club division enables the group to execute a pipeline of high-yielding Main Event Entertainment centres in the US and disciplined investment in the theme parks and bowling businesses".
More Aussies become vegetarians
Yellow, one of Sydney's leading fine dining restaurants, went vegetarian earlier this year with vegan and veggie tasting and a la carte menus. The latest report from Roy Morgan Research backs the savvy marketing move. Over the past four years, the number of Australians who follow a mainly vegetarian diet has risen from 1.7 million (9.7 per cent of the population) to 2.1 million (11.2 per cent).
It's a nationwide shift with 12.4 percent of people in NSW claiming to be vegetarian. Tasmania also boasts a high percentage of non-meat lovers - 12.7 per cent - followed by WA (10.9 per cent), South Australia (10.4 per cent) and Queensland (9.2 per cent). As expected, vegetarianism is a more popular way of life among inner city urban types, led by Sydney (14.4 per cent), Hobart (13.3 per cent) and Melbourne (12.7 per cent).
Most Australians make the switch to a vegetarian diet for health and weight loss reasons - 48.7 per cent - says Roy Morgan. Numbers could keep on growing because 53.4 per cent of Australians say they eat much less red meat than they used to. Immigration and multiculturalism have also played a major role in the rising incidence of vegetarianism in Australia.
According to Norman Morris, Industry Communications Director for Roy Morgan Research: "Vegetarianism is frequently a cultural choice for the segment known as New Australians, nearly one third of whom follow a diet free of or low in meat. Comprised largely of Indian, Chinese and other Asian immigrants living in outer suburban areas, New Australians are well-educated, socially connected and in the early stages of their careers."
Melbourne Airport to increase retail space by 30 per cent
Global travel retail giant Dufry has been re-confirmed as Melbourne Airport's international duty-free operator through to 2022. One of the first strategies under the new contract is to totally revamp the duty-free business in Terminal 2, with the layout to be completed by the first quarter of next year.
Beauty is sure to play a strong role. Andrew Gardiner, chief of retail at Melbourne Airport, was formerly Sydney Airport general manager retail. I interviewed him a couple of years ago for the Australian Financial Review and he is very gung-ho about the beauty business. The new shopping emporium in T2 opened under his watch and he oversaw the expansion of many major beauty brands in the space, including Lancôme , , , and .
Chinese customers became a major shopping force at Sydney Airport and Gardiner expects a similar uplift in Melbourne. The city has become the preferred international gateway for many overseas visitors, he says, with Chinese passenger traffic increasing by 24 per cent in 2015. This latest expansion follows the opening of the new T4 terminal in Melbourne last December.
Sales up as Coty suffers net loss in Q4
There's no pain without gain, even for rapidly expanding multinationals. Coty has cited the costs of recent acquisitions for its profit slump in the fourth quarter. Net loss for the period was $US31 million, in contrast to a profit of $US21 million for the same period last year.
The good news, prior to the closing of Coty's $US12.5 billion acquisition of the P&G brands in October, is that the three months to June 30th delivered the biggest quarterly rise in sales since the company went public in 2013. Total net revenues rose 5.5 per cent to $US1.08 billion.
Colour cosmetics sales proved a winner, rising by seven per cent as Rimmel London, and Sally Hansen proved their worth. OPI was also a power performer as sales rose five percent in the Asia/Pacific region, notably driven by Australia.
The continuing decline of celebrity fragrances impacted Coty's fortunes. The fragrance division suffered an 8 per cent decline overall, in spite of solid growth from Miu Miu's first fragrance and the franchises. In an Olympic year, Adidas products achieved good growth as the Playboy and philosophy brands didn't meet expectations for the skin and body care division which posted a 10 per cent slide in revenues.
Snippets from the wires
- Philippe Starck has lent his expertise to a wide range of lifestyle products, including a homewares collection for Target. The French designer signed a deal with the Perfumes y Diseno Group, which makes fragrances for Desigual, three years ago. The first fruits of the collaboration went on counter at Neiman Marcus in the US last week. A trio of scents called Peau de Soie, Peau de Pierre and Peau d'Ailleurs.
- Shiseido has a strong track record in studying the effects of running and other exercise on the skin. The Japanese multinational established the Shiseido Running Club in 1979. According to the company's latest survey, more than 100 million people around the world love a good jog or something more intense. Shiseido have launched a new website called Run, Run, Run Beauty offering tips on sun protection, fashions and hairstyles and more.
- Victoria Beckham's limited edition collaboration with Estée Lauder is due to hit counters worldwide in mid-September. Tom Ford has set the bar high for team-ups with Lauder. Over the past 10 years, Tom Ford Beauty has reached annual sales of $US500 million. Market analysts are expecting a reasonable start to the Victoria Beckham lineup, suggesting first year sales of $US10 million.
- Beauty retailers in the US such as Ulta and Sephora have been very successful in luring beauty mavens away from the Internet, reveals a new study by TABS. Both chains enjoyed double digit growth in 2015 and 20 per cent of those surveyed said they preferred to buy at stores with beauty advisors. So much so, that sales at cosmetic speciality websites slumped 33 percent last year. Amazon also saw a drop-off of 6 per cent in online beauty sales.
