French giant Groupe Rocher acquires Arbonne International; Unilever moves into probiotic skincare with investment in Gallinee; Revlon re-groups after change in leadership; and H&M reduces number of store openings after profit nosedive.
French giant Groupe Rocher acquires Arbonne International
Founded in 1959 by French beauty entrepreneur, Yves Rocher, Groupe Rocher fills the number 15 slot in the World's Top 30 International personal care and beauty rankings, excluding US companies. With annual sales of $US2.2 billion, the group's revenues outpace Japanese leaders such as Kose and Pola Orbis (owner of Jurlique), Clarins and L'Occitane. With an eye to boosting the multinational's direct selling chops, Groupe Rocher has inked a deal to acquire Arbonne International.
Both companies specialise in botanically-based skincare ranges. Arbonne, founded in Switzerland in 1975, enjoys global sales of $US550 million. With a network of 250,000 independent consultants, Arbonne products are mainly sold in the US, the UK, Australia, New Zealand, Canada, Taiwan and Poland. Financial details of the agreement were undisclosed.
Unilever moves into probiotic skincare with investment in Gallinee
The brainchild of two savvy Frenchwomen, Gallinee grabs attention by stating a simple fact – 90 per cent of the human body is made up of bacteria. Before you recoil, it's this amazing micro-flora ecosystem that helps the skin stay healthy. Gallinee claims to be the first skincare brand to combine pre, pro and post-biotics to help restore the skin's natural balance. Key products include La Culture Body Milk and Facial Hydrating Cream.
Unilever Ventures, the investment arm of the giant multinational, has become a lead investor in Gallinee's Series A financial round. The minority stake investment will help the pioneering company extend its global reach and boost its product range and R&D budget. Probiotic skincare is a fast-growing trend and L'Oréal-owned La Roche-Posay has been very prominent in promoting its success in microbiome research.
The dermocosmetic brand is not alone. Every major player is already looking into the skin microbiome because the science is there and the consumer interest, too, says Gallinee co-founder, Marie Drago. Unilever also released its latest financial results. Net profit for the 2017 fiscal year jumped 16 per cent to $AUD10.21 billion. Kate Somerville and Dermalogica were power performers in the prestige division, with Living Proof, the Dollar Shave Club and Hourglass all posting double digit growth.
Revlon re-groups after change in leadership
Following the departure of CEO Fabian Garcia after less than two years, Paul Meister has been elected Executive Vice Chairman of the Revlon board and will take over the running of the company on a temporary basis. He has extensive financial and investment experience in a wide range of industries and recently served as CEO of InVentiv Health, a leading provider of commercial, consulting and clinical research services to the pharmaceutical and biotech industries.
According to Revlon Chairman, Ronald Perelman, 2017 was a difficult year for the heritage colour cosmetics company following the successful integration of Elizabeth Arden and the increasing growth in e-commerce and speciality beauty stores. Full year sales for 2017 are expected to be $US2.7 billion, a less-than-estimated result after the $US870 million buyout of Elizabeth Arden in mid-2016. Fourth quarter sales reached $US785 million, in contrast to US$801 million for the same period 12 months earlier.
Revlon has transformed its digital operations over the past year or so, including tiered marketing, data collection and social media. But the company's reliance on third-party retailers and it's own marketing and advertising efforts is proving a stumbling block at the moment as many other major beauty players ramp up their online businesses to sell directly to consumers.
H&M reduces number of store openings after profit nosedive
Australian sales have been a bright spot for H&M, rising 31 per cent to $AUD415.7 million for the full year as the fast fashion giant continues to expand nationwide. But the global picture was not so rosy for the three months to November last year. Pre-tax profits slumped 34 per cent and sales dipped 4 per cent.
To claw back ground, H&M has announced it will close 170 poorly performing stores around the world and open 390 new ones in 2018. The Swedish multinational will also push into two new markets – Uruguay and Ukraine. Launching new brands is another tactic to fuel growth. H&M debuted Nyden, a Millennial-oriented, affordable luxury brand, last year and has announced it will introduce its ninth brand – Afound – which will focus on discounted fashion and lifestyle accessories from H&M and third-party brands. Online sales are also top-of-mind, notably through the company's partnership with Alibaba's Tmall in China.
In contrast, Inditex, the owner of Zara, reported a sales increase of 10 per cent to $US21 billion in the first nine months of 2017.
Snippets from the wires
- The revamped Coach fragrance license has become a bullet performer for Inter Parfums. Following the global release of Coach for Men in the lead-up to Christmas, the American bag maker’s scents are now Inter Parfums fourth largest brand. Global Q4 sales for the fragrance manufacturer rose 11 per cent to $US149.5 million. Sales of the three largest franchises – Montblanc, Jimmy Choo and Lanvin – jumped 4 per cent, 20 per cent and 5 per cent, respectively.
- The reformulation of best-selling skincare ranges has become a mini-trend. One bottle of Kiehl’s Powerful-Strength Line-Reducing Concentrate is sold somewhere in the world every minute. But the L'Oréal-owned brand is launching a new and improved version following 89 clinical trials.
- In a recent blog post from Mintel, the researcher reported that the top three sunless tanner brands featured on social media in the US were all Australian – Bali Body, Loving Tan and Bondi Sands.
- Anyone who just arrived from another planet would think that Rihanna invented diversity in beauty. But M.A.C's tagline – All Ages. All Races. All Genders – was coined in 1984 and the brand was a pioneer in offering a huge range of foundation shades. The Lauder-owned brand continues to push the envelope and has partnered with African beauty vlogger Nyma Tang of Darkest Shade fame to create a red lipstick for darker skin tones.
- Getting fit is big business from gym membership to workout clothes. According to Roy Morgan Research, the Australian sporting goods market is worth $1.2 billion and the market leader is Rebel Sport with a 20 per cent market share and annual sales of $230 million.
