Private equity firm Tengram buys indie brand Lime Crime; Google invests US$550 million in Chinese online giant JD.com; TPG takes minority stake in Anastasia Beverly Hills; L'Oréal to debut AR and livestreaming through NYX Cosmetics
Private equity firm Tengram buys indie brand Lime Crime
Founded by Doe Deere and Mark Dumbelton in 2008, cult makeup indie brand Lime Crime reported global revenues of US$30 million in 2017. Known for its cruelty-free, vegan positioning teamed with fashion-forward colours, the brand's Unicorn lipsticks and Diamond Crushers lip toppers are sold in such high-profile international retailers as Ulta, Bloomingdales and Selfridges. In Australia, Lime Crime is sold through more than 14 websites, including RY.com.au, beserk.com.au and makeupnet.com.au.
Tengram Capital Partners, the private equity firm whose other cosmetic industry investments include ReVive and Algenist skincare and this works, the natural beauty brand sold in Mecca, have acquired Lime Crime for an undisclosed sum. There's nothing secretive about the motive for the buyout which is to triple the fast-growing brand's revenues internationally over the next five years.
Co-founder Deere has stepped away from the day to day running of the company but retains a seat on the board. Stacy Panagakis, the former general manager of Fresh, the natural skincare brand sold exclusively by Sephora in Australia, will take up the reins as Lime Crime's new CEO. Panagakis has also worked for Stila so has major cred in natural and prestige makeup to take Lime Crime to the next level.
Google invests US$550 million in Chinese online giant JD.com
JD.com, China's second largest e-commerce services provider and the world's third largest online market by revenue, has made some major moves over the past year. In September 2017, the online giant increased its presence in Southeast Asia with a US$500 million joint venture with Thai retailer, Central Group, who also own major luxury department stores in Europe, including La Rinascente in Italy, KaDeWe in Germany and Illum in Denmark.
Expansion beyond mainland China was also fast-tracked with the opening of JD.com regional offices in Paris and Melbourne earlier this year. Boasting more than 266 million customers, JD.com's 618 Shopping Festival is second only to Alibaba's Singles Day. This year's retail bingefest, held from June 1st to June 18th, pulled in record revenues exceeding US$20 billion.
Launched in 2004 by entrepreneur Richard Liu, another of JD.com's major investors is Tencent, which operates WeChat, China's largest social network. Google has announced it will invest US$550 million in JD.com. Although that sounds a lot it's a drop in the ocean for the Chinese e-commerce titan, giving Google less than 1 per cent of its shares. But JD.com will access Google's global reach and join the Google shopping advertising platform to expand its business across the US, Europe and Australia.
TPG takes minority stake in Anastasia Beverly Hills
It's hard to know what TPG Capital regards as a strategic minority investment. The global alternative asset firm, as it bills itself, manages US$82 billion worth of assets and has 16 offices around the world, including Melbourne, New York, Beijing, London, Mumbai and Moscow. As we reported in May, TPG, who are also the majority owner of e.l.f Cosmetics and Beautycounter and recently acquired a minority stake in Rodan & Fields, was looking to buy all or part of Anastasia Beverly Hills.
TPG has opted for a minority stake in the cult eyebrow brand which pulls in US$340 million a year. Terms were not disclosed but the injection of funds will be primarily used for international expansion and to rev up online sales. According to Paul Hackwell, partner at TPG Capital – "As investors, we are excited by the opportunity to partner with dynamic entrepreneurs like Anastasia and Claudia to bring their vision to the next level. We are impressed by the company's differentiated product offering and strong consumer advocacy, and look forward to working closely with management to further accelerate growth".
Claudia is Anastasia's 30 year old daughter and started working with her mother's company as the receptionist of the brand's original studio. She is now President of Anastasia Beverly Hills and is credited with springboarding the company to its multi-million dollar status through her social media savvy. She is also a major Instagram star in her own right under the name Norvina Claudia and has amassed 1.3 million followers.
L'Oréal to debut AR and livestreaming through NYX Cosmetics
In March, L'Oréal bought ModiFace, the pioneering Canadian augmented reality specialist. The brainchild of engineering professor, Parhari Aarabi, the 11 year old company worked with 100 of the world's leading beauty brands at the time of purchase and was integrated into L'Oréal's Digital Services Factory. At the time the buyout was announced, L'Oréal signalled it would be using ModiFace's technology to "support the reinvention of the beauty experience around innovative services to help our customers discover, try and choose products and brands".
The first brand to feel the impact of the ModiFace acquisition will be NYX Cosmetics via a new service which allows customers to access a digital beauty assistant. Livestreaming consulting sessions using augmented reality and artificial intelligence will replicate the department store experience without leaving home. The digital BA will suggest appropriate shades, new looks and recommend products. Consumers will then be able to buy products and book future appointments. The aim is to roll out the service to more than 60 countries worldwide and to L'Oréal's entire portfolio of brands going forward.
Snippets from the wires
- According to Roy Morgan Research, nearly 14 million Australians aged 14+ browse online shopping or auction sites in the average four week period. The three most popular are: eBay (9.4 million), Gumtree (5.6 million) and Amazon (4.65 million).
- Bricks-and-mortar retailers have become a lot more optimistic about their prospects, reveals the Commbank Retail Insights report. Following a lift in foot traffic, 34 per cent of Australian physical-only retailers are more positive about the future – double the percentage of six months ago. Even better, 76 per cent have forecast higher revenues and 43 percent are expecting growth of 6 per cent or more.
- Currently, only 10 per cent of Procter & Gamble's commercial ads are directed by women. The multinational is the world's biggest advertiser and has announced that 50 per cent of its commercials will be directed by women by 2023.
- British pharmacist, Margo Marrone, founded The Organic Pharmacy in 2002. Today the Brit skincare and treatment brand based on homeopathic and pharmaceutical-grade ingredients is sold in 40 markets around the world and has annual revenues of AUD$10 million. The company has been acquired by leading Italian dermo-cosmetic player. Instituto Ganassini, which boasts a presence in 60 markets worldwide and an annual turnover of AUD$211.3 million.
