BW Confidential - Issue #17 - March/April 2014 - (Page 12)

Update News recap Strategy In brief L'Oréal confident for 2014 At his New Year's address to the press, L'Oréal ceo Jean Paul Agon said he expects the cosmetics sector to grow in 2014 and that the French group will perform better than the market. "We are approaching this new year with confidence, determination and ambition [...]. We are determined to outperform the market, and grow one and a half times faster than the market," he commented. He declined, however, to specify how fast he expects the market to grow this year. Talking about 2013, Agon said that the group had seen a "good year". "We have the satisfaction of having grown in all divisions and all regions. We progressed faster than the market and so gained market share and reinforced our position." Agon explained that some divisions had seen extremely strong performances, such as the active cosmetics arm, which he called the "champion" of the year, and the luxury division. He attributed growth in 2013 to the group's products and brands, some which he said are going through a "renewal", such as Lancôme and L'Oréal Paris. Agon also said that last year saw the group move forward for the future, referring to a reorganization, whereby luxury division president Nicolas Hieronimus also took on responsibility for the active cosmetics and professional products divisions and The Body Shop. Also in terms of re-organization, Agon mentioned the restructuring of the group's business into eight key regions last year. Coty focuses on emerging markets US beauty group Coty has been busy when it comes to reinforcing its business in emerging markets. In December last year, the group set up a joint venture in the United Arab Emirates (UAE) with distributors Chalhoub Group and Jashanmal. The new entity, Coty Distribution Emirates LLC, is intended to strengthen Coty's business in the region. Chalhoub and Jashanmal already distributed Coty's products in the UAE. It also just signed a fragrance license with singer Enrique Iglesias. The company says the partnership will enable it to expand its business in emerging markets, particularly Brazil. Coty will launch a fragrance for the brand this summer. Emerging markets currently represent 24% of the group's total sales and the aim is to bring this figure to a third of sales in five years. The group has also made no secret of its intention to make more acquisitions. In a bid to strengthen its nailcare brand OPI's position in Europe, it bought UK-based company Lena White Ltd, the largest international distributor of the brand in January. Lena White has been OPI's distributor in the UK for the past 30 years. The group also just appointed former Labelux executive Catia Cesari senior vice president business development, mergers and acquisitions. LVMH claims good year despite sluggish Europe French luxury group LVMH's sales were up 4% in 2013 to €29.1bn. Organic sales growth was 8%. Net profit rose 0.4% to €3.44bn, while profit from recurring operations increased by 2% to €6.02bn. The group said it put in an "excellent performance" in 2013, despite exchange rate volatility and slower growth in Europe. It added that it had seen good momentum in Asia and the US. Perfumes and cosmetics sales were up 3% (+7% on an organic basis) to €3.72bn. The company said Parfums Christian Dior gained market share, thanks to J'adore, which performed particularly well in France, Dior Homme and Rouge Dior. At Guerlain, the group highlighted its La Petite Robe Noire fragrance and what it called the "rapid progress" of skincare line Orchidée Impériale. At the selective retailing division, sales grew 13% (+17% on an organic basis) to €8.94bn. The group said travel retailer DFS recorded strong sales increases, reflecting the first full year's integration of three new concessions from the end of 2012 at Hong Kong International airport. LVMH said its Sephora perfumery chain gained market share across all its regions, and that the retailer will continue to expand its distribution network around the world. The retailer recently opened its first store in Thailand. 12 Texas-based investment company TPG Growth has acquired a majority share in US-based budget make-up brand e.l.f. Cosmetics. E.l.f's founders will remain with the brand, which was founded in New Jersey in 2004. In 2011, investment company TSG Consumer Partners took a minority share in the company. US-based direct-sales company Avon's French subsidiary has gone into receivership. The business has been unprofitable for several years, according to industry sources. Avon France employs a staff of 127 and several thousand sales representatives. Last year, Avon announced it would cut 400 jobs across all regions and pull out of slow-growth markets, mainly in Europe, the Middle East and Africa. Shiseido-owned BPI has set up a joint venture with designer and current fragrance licensor Narciso Rodriguez in a bid to secure its partnership with the brand. The joint venture will be 70% owned by Narciso Rodriguez Corporation and 30% by BPI. Narciso Rodriguez trademarks in categories other than fragrance and cosmetics will be owned by Narciso Rodriguez Corp. BPI signed a license with Narciso Rodriguez more than 10 years ago. The joint venture reduces BPI's risk of Narciso Rodriguez finding another fragrance partner. In 2011, Spain-based Puig announced it would take over Jean Paul Gaultier, meaning BPI, which currently holds the Gaultier fragrance license, will lose the brand in 2016. Beauté Prestige International (BPI) is also to distribute Ferragamo Parfums in Canada as of this year. In 2013, Ferragamo signed with BPI to distribute its products in the US. March-April 2014 - N°17 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #17 - March/April 2014

Cover
Comment
Contents
Update
Brand & retail news recap
Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Guerlain ceo Laurent Boillot
Insight: Make-up
Category overview
Budget brands
The latest trends
Retail
Innovative strategies
Retail
Vending machines
Store concepts
Digital Social media content
Market watch: Latin America
Regional overview
Mexico: country analysis
Mexico: prestige retailing
Colombia: country analysis
Colombia: prestige retailing
Argentina: country analysis
Argentina: prestige retailing
Radar A profile of six up-and-coming beauty brands
Emerging markets Company profile: Mahogany
Travel retail: Brazilian travelers
Analysis
Industry viewpoint
Packaging: Decoration techniques
Trends analysis
Innovations
Last word Diagonal Reports analyst Jacqueline Clarke

BW Confidential - Issue #17 - March/April 2014