Schick owner buys hipster men's shaving brand Harry's Inc for US$1.37 billion; more than 5 million Australians suffer from skin, hair and nail issues; luxury and professional beauty stronger for Coty in Q3; and Puig committed to sales target of AUD$4.18 billion by 2025.
Schick owner buys hipster men's shaving brand Harry's Inc for US$1.37 billion
It's not just the spectacular growth of the men's grooming market that's attracting the big bucks. Most of the recent corporate attention is very focused on where the money is spent. According to ResearchAndMarkets, the global men's personal care market is expected to reach US$78.6 billion by 2026. There's been a lot of hype about men's makeup and skincare, but shaving and its accessories account for over 50 per cent of the market.
Edgewell Personal Care owns the Schick, Banana Boat and Wet Wipes brands and is the latest multinational to buy a shaving startup. Unilever bought the Dollar Shave Club for US$1 billion in 2016 and P&G, who also own Gillette, acquired the Bevel brand through its acquisition of Walker & Company late last year, which offers better access to the ethnic and African-American shaving markets.
Schick has been faltering lately in this shift to further consolidation of the global men's shaving business. Edgewell has acquired Harry's Inc, the fastest-growing men's shaving brand in the US, in a cash-and-shares deal worth US$1.37 billion, eclipsing the Unilever/Dollar Shave Club buyout.
Founded in 2013 by Andy Katz-Mayfield and Jeff Raider, Harry's sales more than doubled last year when the brand entered Walmart and Target stores in the US. In 2017, Harry's was launched in the UK, its first international market. The two founders will stay on as part of the executive team. Like the Dollar Shave Club deal, the new acquisition targets customers beyond traditional retailers, notably younger demographics.
More than 5 million Australians suffer from skin, hair and nail issues
The latest Roy Morgan health research paints a grim picture. Over 19.2 million Australians suffered from at least one form of illness or medical condition in 2018. It's easy to see why sales of health supplements are skyrocketing. The two most reported illnesses are related to bones, joints and muscles (68%) and allergies/cold and flu illnesses (67.6%).
According to the researcher, concerns about skin, hair and nails ranked number 6 in the "top 10", with 44.6 per cent of Aussies claiming to suffer problems – over five million people. No wonder sales of probiotics and yogurts containing probiotics are soaring. Issues with the digestive system clinched the number 5 spot, as 49.5 per cent of people worried about their gut health.
According to Michele Levine, CEO, Roy Morgan Research: "More than one third of Australians reported having an illness or condition from each of the following categories: ear, nose or throat, digestive system problems, lungs and breathing issues, skin, hair and nail-related ailments and mental health problems. Women are more likely to report suffering from back and shoulder pain, stress, leg cramps, arthritis, fatigue and dry skin and itching problems and are more on the front foot and seek out a solution".
Luxury and professional beauty stronger for Coty in Q3
Coty has been affected by supply chain disruption and senior management changes over the past few months. But CEO Pierre Laubies remains optimistic. Net revenues reached US$1.99 billion in Q3 – a drop of 10.1 per cent compared to the same period in 2018. While revenues for the first nine months of the multinational's fiscal year declined 8 per cent to US$6.55 billion.
The Luxury division kicked goals as key brands including Burberry, Calvin Klein and Gucci recorded market share gains, as did new launches such as Chloe Nomade and Marc Jacobs Daisy flankers. Boss Bottled Infinite also propelled Hugo Boss back into growth. Luxury sales for Q3 totalled US$729.2 million. Revenues in Europe, Coty's largest regional market, increased, particularly in Germany, the UK and Spain. The Asia/Pacific region and Middle East were other hotspots for prestige.
Consumer Beauty, the multinational's largest division, saw net sales fall 17.8 per cent over the period to US$840.3 million. Haircare sales dipped, except for Wella. Sally Hansen produced a single digit sales increase and Covergirl, Rimmel London and Max Factor matched the average growth of the masstige makeup sector.
OPI delivered an upbeat performance in the Professional Beauty division, where sales totalled US$421.1 million. The Glide hot brush also buoyed ghd results. According to Mr Laubies, Coty must capitalise on the solid results of the luxury and professional beauty divisions and address the weakness of consumer beauty's fortunes.
Puig committed to sales target of AUD$4.18 billion by 2025
When a company has been in business for more than a century and remains family-owned, taking the longterm view becomes a default choice. The Barcelona-based fragrance and fashion group has reported revenues of 1.933 billion euros (AUD$3.1billion) for 2018 – almost flatlining with its 2017 results. Puig's stable of power brands includes Carolina Herrera, Nina Ricci, Paco Rabanne, Jean Paul Gaultier, Dries Van Noten, Penhaligon's and L'Artisan Parfumeur and the company remains confident of achieving its sales target of 3 billion euros (AUD$4.18 billion) by 2025.
Puig still generates 14 per cent of its revenues in its home country of Spain, where sales slipped 3 per cent last year. But sales in North America and the European Union, which account for 45 per cent of the company's global business, rose 9 per cent to 854 million euros (AUD$1.37 billion). The rest of the world, including Australia and the Asia/Pacific, represent 41 per cent of Puig's sales and revenues reached 800 million euros (AUD$1.28 billion).
Puig plans to further support its own brands such as Paco Rabanne and Carolina Herrera to aim for annual sales of 1 billion euros (AUD$1.64 billion) over the next few years. Paco Rabanne currently ranks number four worldwide and Carolina Herrera has climbed to 11th position, mainly due to the phenomenal success of Good Girl. Jean Paul Gaultier achieved a historic high last year, gaining major traction in travel retail. Penhaligon's is also in double digit growth, reports Puig, and L'Artisan Parfumuer is poised to go global. The first makeup products from Christian Louboutin will roll out later this year, further lifting Puig's bottom line.
Snippets from the Wires
- A record 18 countries, including Australia, took part in Esxence 2019. Held in Milan in late April, the 11th edition of the indie fragrance event showcased 221 brands – up 19 per cent on 2018. Attendance reached a new milestone of 7890 guests from 77 countries – an increase of 25 per cent on last year.
- The US prestige beauty market experienced only marginal growth in Q1 2019 compared to the same period last year. Overall sales inched up 1 per cent to US$4.1 billion. Notable increases occurred in lip colour (+8%), eyebrow makeup (+6%), men's skincare (+6%), women's skincare (+4%) and fragrance – 4 per cent for women and 6 per cent for men.
- Sephora entered the Hong Kong market in 2008, but called it quits two years later. The world's largest specialist beauty chain has announced it will open 8 new stores in Hong Kong over the next three years, starting with the swanky IFC Mall adjacent to the Four Seasons hotel.
