Mass and prestige deliver sturdy growth for Unilever; perfume and cosmetics crucial in LVMH's record-breaking performance; two Australian brands selected by Target accelerator in US; and double digit growth in the US and APAC for L'Occitane.
Mass and prestige deliver sturdy growth for Unilever
Unilever's personal care division overtook the multinational's food business in 2011 and the gap between the two units continues to widen. By 2021, Unilever's market share of the global skin and hair market is expected to reach 12 per cent. Analysts believe that the company could expand its reach to 16 per cent of worldwide beauty and personal care sales over the next three years with further acquisitions.
Unilever has every intention of continuing its corporate buying spree. The company is holding a Shark Tank-style conference in San Francisco from February 20 to 21 – the Personalized Beauty Summit – in order to seek out new prestige brands to buy.
Unilever has announced overall sales of US$56.74 billion for the 2018 fiscal year with personal care and beauty sales accounting for over 40 per cent of revenues at US$23.68 billion. Dove, the division' s largest brand, enjoyed a year of broad-based global growth. Skincare was also a star in the strong growth of Vaseline and Love, Beauty and Planet, the multinational's first personal care brand in 20 years. Last month, Unilever launched Love, Home and Planet in the US, the first natural home care range inspired by a beauty brand.
The prestige portfolio, encompassing Hourglass, Ren, Living Proof, Dermalogica, Murad and Kate Somerville, posted another year of double digit growth. As did the Dollar Shave Club, which now accounts for 8 per cent of the US shaving market, the biggest in the world, reports Euromonitor.
2018 was a solid year for Unilever, with good value growth and high-quality margin progression, says CEO Alan Jope. "Looking forward, accelerating growth will be our number one priority. With so many of our brands enjoying leadership positions, we have significant opportunities to develop our markets, as well as to benefit from our deep global reach and purpose-led brands. We remain on track for our 2020 goals".
Perfume and cosmetics crucial in LVMH's record-breaking performance
Fashion, leathergoods and watches remain the major cash cows for LVMH, the world's largest luxury goods group. But the perfumes and cosmetics division saw organic sales increase 14 per cent to 6.09 billion euros (US$6.97 billion) for the 2018 financial year, earning the conglomerate a top 10 ranking in the global beauty business. The titan's overall revenues surged 10 per cent over the previous year to 46.82 billion euros (US$53.54 billion)
Makeup was the hero for the perfumes and cosmetics category, clocking up 47 per cent of revenues by product category. Fragrances accounted for 35 per cent, followed by skincare at 18 per cent. Geographically, 35 per cent of LVMH's beauty and fragrance sales came from Asia, excluding Japan, 22 per cent from Europe, excluding France, 16 per cent from the US, 11 per cent from France, 11 percent from "other" markets and 5 per cent from Japan. Sephora continued to strengthen in all of its markets and in digital.
What's in store for 2019? Parfums Christian Dior is poised to accelerate its Maison Christian Dior concept and Guerlain will roll out more Parfumeur boutiques. Benefit continues to focus on what the brand does best – brows. Fenty Beauty is on track to rev up international expansion, notably in Asia. Parfums Loewe will premiere a new brand identity and two flankers of Flower by Kenzo and Kenzo World will make their debut.
Two Australian brands selected by Target accelerator in US
Target Australia has no affiliation with Target Corp in the US and their fortunes are dissimilar, too. The Aussie mall staple has been battered by challenging retail head winds, but Target US has a turnover of US$71.8 billion a year and is the eighth largest department store retailer in America. Less focused on price than Walmart, Target US is focused on "younger, more image-conscious shoppers".
Target Takeoff, one of a group of the retailer's accelerators, was birthed three years ago. Beauty, wellness and health are key categories, especially in the company's small-format stores. Target has been successful in upping its beauty footprint with private label brands, but has also been widening its overall wellness and personal care offerings with ranges from emerging startups that meet the "cheap chic" status so desired by younger customers.
The lineup of 10 emerging brands selected for this year covers natural skincare, wellness and beauty supplements. Following workshopping with 70 Target executives and former Takeoff graduates, they will showcase their products on February 28.
Two Australian brands have made the cut – Black Chicken Remedies, the natural and organic bodycare range, and Everyday for Every Body, a cruelty-free sunscreen and bodycare brand. Other contenders include: Allyoos, a "clean" haircare brand, Ducalm, an after-exercise skincare range, Olive + M, olive oil-based skincare, Pholk, a vegan brand inspired by African botanicals, Sahi Cosmetics, a luxury makeup lineup for all skin tones, SkinKick, for problem skin, Scotch Porter, a men's grooming player, and Terra Origin vitamin and powder supplements. The potential for any brand picked by by Target is huge because, in spite of the rise of China, the US remains the largest single beauty market in the world.
Double digit growth in the US and APAC for L'Occitane
L'Occitane upped its stake in LimeLife by Alcone to 60.48 per cent in January last year and the move has paid off in spades. Over the nine months to December 31, the prestige maker of beauty and well-being products enjoyed sales growth of 50.3 per cent in the US, much of it attributed to LimeLife.
Overall global net sales for the period rose 10.6 per cent to US$1.2 billion. Dynamic growth was also the order of the day in China – up 12.7 per cent – and Southeast Asia – up 23.6 per cent. Hong Kong was also a strong double digit performer, albeit at a slower rate. Although macroeconomic uncertainties are reducing consumer confidence in some markets, we managed to maintain solid growth, noted Reinold Geiger, chairman and CEO of L'Occitane.
Snippets from the Wires
- Men's subscription shaving services such as the Dollar Shave Club and Harry's have disrupted the global razor market. Billie, a US direct-to-consumer women's shave and body brand, launched in 2017 with the battle cry that women were paying a "pink tax" on razors of up to US$1351 a year. The fast-growing startup has scored US$25 million in Series A funding from Goldman Sachs Private Capital Investing group. Billie opened its first pop-up store in New York in December.
- The nation's spending tally grew 0.4 percent from November to December, reveals the Commonwealth Bank Business Sales Indicator. Small luxuries such as hotels and motels, fashion, barber and health and beauty services experienced the biggest growth.
- Inter Parfums has a big year coming up with the launches of a new Lanvin fragrance called A Girl in Capri, its debut fragrance from high-end jeweller Graff and a first step into direct-to-consumer online sales with the Lily Aldridge collection. Net sales for 2018 rose 14.3 per cent to US$675.6 million, largely fuelled by the Guess, Oscar de la Renta, Abercrombie & Fitch, Jimmy Choo and Montblanc fragrance licenses.
- Sydney hosted the annual international incentive conference for Jeunesse Global last year attended by 5000 delegates. The "youth enhancement" direct seller, specialising in skincare and supplements, has posted record sales for 2018 of US$1.46 billion.
- Chanel has debuted its first beauty playground store – Atelier Beauté Chanel – in SoHo in New York. Shoppers can leave their belongings in a locker and there are separate stations for each product category. There's also a "content creation" room where they can create flat lays for social media under Instagram-approved lighting, allowing every customer to become an influencer.
