Healthy holiday shopping season, but trouble could lie ahead, NRF says
NEW YORK — Despite caution among consumers, retailers wrapped up 2012 with a healthy holiday shopping season, according to a new report by a retailing trade group.
The National Retail Federation said Tuesday that holiday retail sales increased 3% over the year before, to $579.8 billion. December retail sales increased 0.8% seasonally adjusted from November and 2.1% unadjusted year over year. Nevertheless, the 3% increase was still below the NRF’s projected 4.1% growth. Meanwhile, nonstore holiday sales grew 11.1%.
"For over six months, we’ve been saying that the fiscal cliff and economic uncertainty could impact holiday sales," NRF president and CEO Matthew Shay said. "As the number shows, these issues had a visible impact on consumer spending this holiday season. We can’t expect consumers to continue to carry the burden of growing our economy — Washington must put political differences aside and do what it takes to get our country growing again and Americans back to work."
But retail sales growth is "highly unsustainable" due to tax-related pressure on income, spending and weather-related issues in the next few months, Guggenheim Securities analyst John Heinbockel wrote.
December retail sales figures released by the Department of Commerce — which showed total retail and food services sales but excluded products like automobiles, restaurants and gas stations — showed a 0.5% seasonally adjusted increase and a 4.7% year-over-year adjusted increase. General merchandise stores’ seasonally adjusted sales were unchanged month to month and decreased unadjusted 3.4% year over year, while health and personal care stores’ seasonally adjusted month-to-month sales increased 1.4% as unadjusted year-to-year sales decreased 0.7%.
"While nonstore retailers increased a hearty 11% this December, total December sales could not make up for shortfalls in certain categories like electronics," NRF chief economist Jack Kleinhenz said. "Heading into 2013, consumers could continue to think twice about their discretionary purchases as they face decreases in their paychecks and other concerns with their household budgets."
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Hong Kong’s Li & Fung acquires Lornamead
HONG KONG — Hong Kong-based Li & Fung — a multinational consumer goods sourcing, distribution and logistics group — has acquired Lornamead for about $190 million.
Lornamead owns and manages a portfolio of U.S., German and U.K. personal care brands — such as Finesse, Aqua Net, Yardley and Lypsyl — across hair, body, skin and oral care product categories. It has operating platforms in the United States, Germany and the U.K., and sells more than 20 brands in more than 60 countries to a variety of large retailers, including CVS and Walgreens in the United States; Rossmann and DM in Germany; and Boots, Tesco and Sainsbury in the U.K. Lornamead generated net sales of approximately $155 million in its financial year ended March 2012.
The transaction excluded cash on Lornamead balance sheet, the Yardley business outside the United States — which was sold by Lornamead in a separate transaction prior to this deal — as well as certain other operations that were retained by Lornamead shareholders.
“The acquisition of Lornamead will further expand our market share in the beauty business on a global basis,” stated Bruce Rockowitz, group president and CEO of Li & Fung Limited. “This is a very strong platform and will allow us to deepen our relationships with major retailers across all key markets and provide enormous cross-selling opportunities among our existing business networks. In addition, as we see increasing opportunities in the beauty business across Asia, this transaction will add a strong growth driver for LF Asia in the beauty and cosmetics arena.”
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Walmart announces launch of Drew Barrymore’s beauty collection
NEW YORK — It’s official. Actress Drew Barrymore — through a collaboration with Maesa, a creator and manufacturer of beauty products — is launching her new Flower cosmetics line in Walmart.
The new collection is comprised of 181 eye, face, lip and nail products ranging from $4.98 to $13.98, and will be available in more than 1,500 Walmart stores and on Walmart.com by the end of January.
Actress, producer, director and former co-creative director of her own CoverGirl campaign (2007 to 2012), Barrymore has a true passion for makeup. Flower encompasses her favorite cosmetics that she’s used throughout her career.
"Today, too many women overpay for quality makeup or make a unnecessary extra trip to a department store to purchase their cosmetics," stated Carmen Bauza, VP beauty and personal care at Walmart U.S. "This partnership will save our customers time and money. Flower is the premium cosmetics line our customers have been asking for, and is the newest addition to Walmart’s broad assortment of beauty products that help women feel beautiful at a great value."
As an owner of the brand, Barrymore takes pride in promoting Flower, which in turn allows the company to put all of its money into the formulations and packaging, and not into advertising, the company stated. The result: This saved revenue allows Flower to spend two to three times more on formulation and packaging than the average mass market brand, resulting. Flower is manufactured in the United States and not tested on animals
Drew will surely bring a great deal of attention to the brand. Too bad she did not focus on the formulations being natural with a name like Flower. Perhaps Walmart shoppers are not ready for naturals.