Chinese private equity firm buys majority stake in Jason Wu; Luxury skincare boom: Estée Lauder raises full year guidance for the second time; sales up 90 per cent for daigou-focused AuMake; and 8.3 million Australians buy vitamins and supplements.
Chinese private equity firm buys majority stake in Jason Wu
Jason Wu launched his first fragrance in Australia in October 2017, introducing the signature juice as a precursor to a full-blown beauty line. The Taiwanese-Canadian may be in a better position to fulfil his dream. Last year, the Zhejiang Semir Garment Co, a leading Chinese lifestyle and children's clothing company, acquired 11 per cent of the high fashion designer's business. But to further propel Jason Wu into the Chinese luxury market, private equity firm, Green Harbor Investments, has acquired a majority stake of JWU, the parent company of Jason Wu.
It can be tough for US-based fashion houses to gain global traction because of the dominance of the major European luxury conglomerates, including LVMH, Kering and Chanel. With offices in Beijing and Hong Kong, Green Harbor's other investments focus on education, healthcare and financial services. Jason Wu is the company's first venture into both fashion and the US, following in the wake of other Chinese investment firms such as Fosun and Shandong Ruyi, who have injected funds into storied labels including Lanvin and Carven.
Wu won the China Fashion Gala's leadership award last week at a lavish ceremony in New York, which augurs well for expansion into China. He earned his designer stripes under the watchful eye of Narciso Rodriguez before launching his namesake label in 2007. He was also the womenswear artistic director for Hugo Boss from 2013 to 2018. Early devotees included Ivana Trump and Mad Men actress January Jones, but his most publicised fans are Michelle Obama and the Duchess of Sussex.
Luxury skincare boom: Estée Lauder raises full year guidance for the second time
The Estée Lauder Companies (ELC) has raised full-year guidance for estimated net sales for 2019 for the second time this fiscal year – from 5 to 6 per cent to 7 to 8 per cent. The prestige pure beauty player has reported net sales of US$3.74 billion in Q3 – a double digit spike of 11 per cent year-on-year.
Skincare is the multinational's largest category and enjoyed a 21 per cent increase over the same period last year from US$1.4 billion to US$1.74 billion. A result that pushed overall net sales in the first 9 months of the financial year to US$11.27 billion – an uptick of 9 per cent.
The Asia/Pacific region was the bullet performer in Q3, where net sales soared a huge 25 per cent to US$966 million. Key brands singled out for their strong upsurges included La Mer, the Estée Lauder core brand, Origins, Tom Ford Beauty and M.A.C. Travel retail was another hotspot and half of ELC's top 10 brands achieved double growth in the fast-growing channel in Q3. Net sales of makeup, the multinational's second largest category, reached US$1.46 billion – an increase of 5 percent. Fragrance and haircare sales edged up 3 per cent and 2 percent, respectively, to US$392 million and US$136 million.
Sales up 90 per cent for daigou-focused AuMake
AuMake's $14.2 million buyout of rival Broadway last month created the largest China-focused offline and online retail platform in Australia. The daigou-focused company with strong sales in skincare and nutritional supplements has reported the second largest sales growth in its history for Q3. Sales rose 93 per cent to $9.9 million compared to the same period last year.
Several other milestones were also passed in the third quarter. Approximately 33 per cent of AuMake's total sales for the period were online, mainly through the Chinese social media app, WeChat. The retailer aims to grow its e-commerce business to 50 per cent of total sales and fast-track its own brand sales to $15 million to $20 million by fiscal 2020. AuMake's online data base has ballooned six times from 20,000 to 130,000 and profit doubled to $1.68 million over the period.
8.3 million Australians buy vitamins and supplements
A quick glance at the catalogues and aisles of Australia's leading pharmacy chains is all the proof you need that one third of the population buy vitamins and supplements. According to the latest report from Roy Morgan Research, 8.3 million Australians regularly purchase vitamins, minerals and supplements. Two-thirds of the bottles and packages – 65 per cent – are sold through the major pharmacy chains led by Chemist Warehouse, Priceline and My Chemist. Supermarkets rank second with a 27 per cent market share.
Women are the biggest buyers in all demographics in an average 6 month period – 33 per cent among under-25s, 45 per cent of those aged 25 to 34 and 59 per cent aged 35 to 49. There's a slight dip among older demos, but not much from the older Millennial/ Gen X highpoint – 53 percent of those aged 50 to 64 and 50 per cent aged 65-plus. Men under 25 are the least likely to reach for the pills and capsules – only 16 per cent.
According to Michele Levine, CEO, Roy Morgan Research, brands wanting to target key markets need to know more about potential customers than just their age and gender. "Factors such as attitudes to health and diet, family circumstance and socio-economic status, exercise participation and education all contribute to a consumer's vitamin purchasing decisions, and any brand that tailors its marketing campaigns accordingly will be better placed for success".
Snippets from the Wires
- China has again came up trumps for L'Occitane. The French prestige and natural cosmetics maker enjoyed net sales growth of 8.7 per cent in the first quarter of the year to 1.426 billion euros (AUD$2.278 billion). The company reports that some of the highest contributing markets to overall growth included Malaysia, Canada and Australia. But China, Russia and Brazil all recorded double digit growth of 12.1 per cent, 12.2 per cent and 11.1 per cent, respectively.
- Vegan silk polymers with anti-pollution and colour protection benefits are increasingly being used in hair and skincare. Swiss giant Givaudan, the world's number one player in the flavours and fragrances category, has acquired the German company AMSilk, a major global supplier of vegan silk polymers, as part of its Active Beauty Division. The buyout will also allow Givaudan to develop sustainable customised polypeptides for clean beauty skincare and haircare.
- Just over a month ago we reported that Brazilian heavyweight Natura, the owner of Aesop and The Body Shop, was in deal talks with Avon to buy both divisions of the company. last week, Korea's LG Household & Health Care bought Avon North America. Brazil is Avon's second largest market after the US and Natura has announced the company is still in advanced discussions to purchase Avon Products, the direct seller's global-facing division.
- Beiersdorf's organic sales rose 6 per cent in Q1 to US$2.2 billion. Nivea reported sales growth in all regions, with the Asia/Pacific region (including Australia) spiking 13.2 per cent. Global growth for La Prairie jumped by an impressive 27 per cent.
