Private equity firm Gryphon acquires majority stake in Milani Cosmetics; The Hut Group secures AUD$1.07 billion for further expansion; China's cross-border online purchasing to reach US$125 billion; and Gen Z females most prolific users of social media in Australia.
Private equity firm Gryphon acquires majority stake in Milani Cosmetics
Milani Cosmetics has been making bargain basement makeup that rivals its prestige counterparts for years. Inspired by the fashion capital of Milan, the US brand's comprehensive lineup is mainly manufactured in the US and Italy. In Australia, Milani is sold through its own dedicated website, leading online beauty retailers such as cosmeticcapital.com.au and selected Terry White Chemmart and other pharmacies.
San Francisco-based private equity firm Gryphon, which specialises in lower-end middle market brands, has made its first foray into the beauty industry by acquiring a majority stake in Milani Cosmetics. The company also encompasses Jordana Cosmetics, founded in 1986 and also available in Australia through its own local website. Current owners Ralph Bijou and Laurie Minc will retain a significant minority stake in the business and remain on the board of directors.
Milani products are sold in 75 countries, including the US and Australia. Michelle Taylor, an executive advisor to Gryphon will take on the role of interim CEO. A beauty industry veteran, she has held senior roles at Kate Somerville Skincare, Chanel, Kiehl's, Lancôme and Elizabeth Arden. Terms of the deal were not disclosed.
The Hut Group secures AUD$1.07 billion for further expansion
In a week when the global spotlight has been focused on the British royal family, The Hut Group (THG) has won the Queen's Award for Enterprise in the International Trade category. Following a series of acquisitions last year, including Australian online beauty website RY.com.au, and the recent buyout of Eyeko, THG has increased its revenues by 89 per cent over the past two years. The fast-growing company operates in over 140 countries in the health and beauty sector and ships to 195 destinations worldwide, including Australia.
There's plenty more to come, though. THG has secured an AUD$1.07 billion credit facility to expand its beauty portfolio and invest in mergers and acquisitions. Leading international banks, including Barclays, HSBC, Santander, Citibank and J.P. Morgan, form the bulk of investors. THG currently employs 4000 people and has distribution centres in the UK and the US. A third distribution centre is currently under construction in Poland to service continental Europe.
China's cross-border online purchasing to reach US$125 billion
China is the largest online shopping marketplace in the world and sales are expected to reach US$1 trillion by the end of the year. Australian beauty and health brands are vigorously chasing the Haitao market, the Chinese name for retailers selling into the Chinese online market from outside the country. Beauty and cosmetics make up 20 per cent of sales purchased from overseas retailers and total revenues from cross-border e-commerce are expected to soar to US$125 billion within six months, reports leading consulting firm Frost & Sullivan in partnership with Azoya Consulting, a leading solutions provider in cross-border e-commerce.
The news gets better. The average Chinese online shopper spends almost US$850 a year on products from overseas retailers because they are perceived as higher quality and there's a lower risk of counterfeiting. More than 63 per cent of those surveyed said they planned to increase their overseas and local e-commerce spend over the next year, reports Frost & Sullivan. Australia enjoys one of the top four trust ratings among countries selling into China. Japan has the highest trust ranking (72%), followed by South Korea (60%), the US (55%) and Australia (37%).
Gen Z females most prolific users of social media in Australia
Women of all ages outrank their male counterparts as users of social media in Australia, says Roy Morgan Research. But Gen Z girls and young women aged 14 to 24 years old far outstrip other age groups in their addiction to the main platforms, including Facebook, Instagram and Twitter. According to the new report, they spend 822 minutes per week clicking and flicking – an average of two hours per day.
Millennial women aged 25 to 34 narrowly beat Gen Z males, clocking up 550 minutes per week by contrast to 528 minutes. But Millennial males of the same age still rack up a respectable 367 minutes per week, placing them just ahead of younger Gen X women aged 35 to 49 who spend 335 minutes a week on social media. Men aged from their mid-30s to 50 fall just shy of the round figure of 300 at 298 minutes per week.
Social media has become so much a part of national life, says Roy Morgan, that women aged 50 to 64 average 239 minutes a week and men of the same age spend 181 minutes. Women aged 65-plus trawl through social networks for 125 minutes per week and men in the same age bracket stand alone as the only demographic who don't make it to three figures – at 83 minutes per week.
Snippets from the wires
- Athleisure brands are the biggest beneficiaries of Australia's addiction to exercise. According to Roy Morgan Research, the nation's number one sport/activity is walking (9.6 million participants), followed by gym/weight training (3.09 million) and jogging (2.02 million). Walking has soared in popularity over the past four years, reports the researcher, with numbers of vigorous strollers increasing by 800,000 since 2014.
- Chinese e-commerce titan, Alibaba, experienced a revenue leap of 61 per cent in the first quarter of the year to US$9.7 billion.
- Inter Parfums has posted a 20.1 per cent increase in net sales for Q1 of its fiscal year to US$171.8 million. The fragrance maker's three largest markets all enjoyed double digit growth – North America (+19%), Western Europe (+10%) and Asia ( +34%). The Montblanc and Coach brands led growth in Europe and Anna Sui and Oscar de la Renta propelled US sales.
- Revlon is facing major headwinds in the US mass retail market. Q1 global sales declined 5.7 per cent to US$560.7 million. Bright spots for the iconic company were an increase in international sales and Elizabeth Arden which posted growth of 10.4 per cent for the period to US$105.7 million.
- Turmeric has been used in Ayurvedic medicine for centuries to soften and heal the skin and treat colds. But Western interest in the versatile root's antioxidant and anti-inflammatory benefits has soared, reports Google. Worldwide searches centred on turmeric have spiked over 100 percent in the past 12 months. There has also been a triple digit increase in searches linked to turmeric face masks, says the tech giant.
