Private equity firm buys Iconic London; Astral Brands acquires Butter London; big money bets on Lady Gaga's beauty start-up; and Antioxidants - resurgent global beauty trend.
Private equity firm buys Iconic London
Iconic London launched in Australia through 21 selected Myer stores late last year. It was a homecoming of sorts for its founder, Jade Elliott. As a 21 year old, the English entrepreneur studied at the Makeup Technicians School in Sydney and worked as a sales assistant at Myer. In 2015, Elliott founded Iconic London as "a high-end makeup brand that was also fun and rebellious". A major hit from the start, prestige stockists include Harvey Nichols and Chrissy Teigen and Kim Kardashian lead the celeb fan pack.
London-based Blue Gem has acquired Iconic London for an undisclosed sum. The private equity firm has major investments in Liberty, the storied London department store, QMS Medicosmetics and Dr Vranjes Firenze, the world's leading luxury home fragrance brand. The new owners have already committed to a major US expansion for Iconic London later in the year.
Elliott will retain her role as founder and creative director. But Selma Terzic, currently the Managing Director of QMS Medicosmetics will take on the role of CEO. A beauty industry heavyweight, she was formerly the Business Development Consultant for Pat McGrath Cosmetics, Global Managing Director of PZ Cussons and General Manager of M.A.C in the UK.
Astral Brands acquires Butter London
The name Astral Brands might not ring a bell but Australians are very aware of the US company's beauty brands. Founded 40 years ago and an industry leader in natural and plant-based makeup and skincare, Astral's number one name checker is PUR, a top-selling mineral makeup brand in the US and sold through Myer and Adore Beauty in Australia. The other major in the stable is Cosmedix, a professional cosmeceutical skincare range sold in clinics and dermatologists nationwide and online. Astral also own Aloette, the direct-to-consumer skincare brand noted for its farm to jar philosophy.
Astral Brands have added another prestige player to its portfolio with the acquisition of Butter London, the fashion-forward nail brand formulated without the eight "nasties"of mainstream nail polish, including toluene and formaldehyde. In spite of the name Butter London is an American brand and has a major presence in the US, selling in Ulta, Kohl's and Nordstrom stores and online at Amazon. It is also sold in nine countries around the world, including Australia.
Financial details were not disclosed and Butter London is estimated to have revenues of about US$15 million a year. The company has expanded into makeup in recent years and the injection of funds will fuel future expansion as a colour cosmetics line.
Big money bets on Lady Gaga's beauty start-up
Ate My Heart, a company owned by Lady Gaga, quietly filed a US trademark in May for Haus Beauty, which covered makeup, fragrances, skincare, essential oils and tanning products. As usual, her timing is perfect. The first half of the year has seen private equity firms and venture capitalists pump US$464 million into US beauty brands and start-ups. In fact, 2018 is already on track to being the leading year of the past decade for such investments and Lady Gaga has now attracted serious attention.
Lightspeed Venture Partners, a Silicon Valley firm with US$4 billion under management, has already taken major steps into the cosmetic space with investments in Jessica Alba's The Honest Company and Gwyneth Paltrow's Goop. The company has revealed it has also made an investment in Haus Beauty. Like her celebrity rivals in the beauty bizz, Kylie Jenner and Rihanna, Lady Gaga has a huge social media following of 76.5 million on Twitter and 28.8 million on Instagram. With a full creative team already in place at Haus, the award-winning singer has the talent and now the financial backing to fulfil her beauty brand plans.
Antioxidants - resurgent global beauty trend
Antioxidants have been at the forefront of skincare development for decades. In the early 2000s, they moved from workhorse to superstar status and hardly a month went by without the launch of a new skin protector claiming to be more powerful than its predecessors. Professional and near-prescription brands like L'Oréal-owned SkinCeuticals have put antioxidants back in the spotlight in recent years because of their key role in protecting the skin from pollution and UV damage.
A new report from MarketsandMarkets reveals that the trend will keep growing and predicts that the global antioxidant ingredient market will increase at a rate of 5.6 per cent from US$115.1 million this year to US$150.9 million by 2023. The researcher doesn't see a repeat of leading cosmetics brands looking for new antioxidants to create a point-of-difference. Proven favourites such as Vitamins E, C and A will fuel on-going growth because they are naturally-derived and well-known.
Antioxidants also shield the skin from dehydration, prevent inflammation and slow the signs of ageing. The use of antioxidants is also expected to become more prevalent in haircare and makeup products, says MarketsandMarkets, and the Asia/Pacific region will become the world's largest market over the five year forecast period.
Snippets from the Wires
- Anyone who clicks onto European websites will be aware of the EU's new General Data Protection Regulation which came into force in late May. Increasing data privacy is the goal and that's a good thing, says L'Oréal, even though the multinational lost 50 per cent of the names on its database. According to chief digital officer, Lubomira Rochet, L'Oréal can now target ads at consumers who really want to see them and click-through rates have already improved.
- Colour cosmetics brands have been packing their foundations and complexion enhancers with added skincare benefits for years. The trend is now so huge, says the NPD Group, that 62 per cent of American women use makeup that promises to reduce fine lines, minimise pores and reduce redness.
- Cult beauty products just keep on selling to each successive generation. Lauder-owned Aveda is celebrating its 40th anniversary by re-launching its iconic bestseller – Cherry Almond Shampoo – which was discontinued for over a decade.
- Gen Z is rapidly taking over from Millennials as the sweet spot for beauty brands. In the US, Estée Lauder has teamed with myunidays.com, a student network, to offer major discounts on its leading brands such as M.A.C (10% off), Clinique (15% off) and Too Faced (10% off).
