BW Confidential - Issue #1 - April 2010 - (Page 40)

Market watch Western Europe Two-tone market An analysis of beauty’s ups, downs and opportunities in Western Europe’s big five markets C ompany executives describe 2009 as a tale of two halves, with the first six months hit by the worst effects of the recession and retailer destocking, and the rest of the year seeing a slight uptick as the distribution began re-ordering and consumers started spending more. Western Europe could be described as a tale of two types of markets, with countries such as Germany and France coming out of the crisis relatively well, while Spain and Italy suffered severe declines. Germany perhaps was the most resilient of the big five Western European markets, largely because the economy there was not hit as hard as its neighbors. The beauty market’s sales increased by 1.7%, while selective products sold in perfumeries fell by just 1.6%. France’s selective market also did relatively well. The prestige sector saw one of the smallest declines in markets covered by NPD—sales were down by 1.4% in value. Meanwhile, the second half of the year in the UK and a surge in Christmas sales boosted overall sales for the year. The prestige market saw sales increase by 2.8%. “ What needs to be improved is service. We are emphasizing advice and BA training as this is what will bring consumers into the stores and create loyal customers Clarins md France Philippe Perrin private labels at supermarkets gave branded products a run for their money. Italy too was hit hard, with prestige sales down by 4%. Overall the cosmetics and fragrance market in Western Europe was down by around 1.2%. According to L’Oréal, this compares to -2.2% in North America, -8.2% in Japan and an increase of 8.9% in new markets. Europe’s common ground Despite the divide, retailers and manufacturers in Western Europe share much common ground. Retailers across the region criticized suppliers last year for strong price increases, which they say put off consumers. They also continue to bemoan the oversupply of product. The Federation of European Perfumery Retailers vice president Robert Leygues comments: “Brands do around 20% of business with new launches, while retailers do just 10% with new launches, which just means our stock increases.” Brands meanwhile worry about their In southern Europe however, the picture was a little different. Sales in Spain’s selective market decreased by 5%.The market saw a significant trading down and ” 40 April 2010 - N°1 - BW Confidential credit: stock.xchng/TouTouke

Table of Contents for the Digital Edition of BW Confidential - Issue #1 - April 2010

Update - Brand and retail recap
Take note - Market facts, figures and trends
Launches - The latest fragrance, skincare and make-up launches
Best of BW - Market highlights
Interview - Sephora international & development md Olivier Schaeffer
Insight: make-up - Category overview
 - Industry viewpoint
 - Trends
Wellness report - Overview
 - Industry roundtable
 - Spa case studies
Travel retail - Europe: little chance of a rebound
Market watch: Western Europe - Regional analysis
 - Germany
 - France
 - UK
 - Spain
 - Italy
Radar - Six up-and-coming beauty brands
Packaging special -  Industry analysis
 - Innovation
Last word - UBS analyst Nik Modi's outlook for 2010

BW Confidential - Issue #1 - April 2010