Kline: Natural personal care markets in Western Europe, U.S. remain vibrant
PARSIPPANY, N.J. — The 2011 growth of the natural personal care segment waned slightly but still consistently outperformed the overall beauty market, according to recent findings from consulting and research firm Kline & Co.
According to Kline & Co., demand for natural personal care products remained strong within the well-established markets of Western Europe and North America, maintaining high growth rates. Research showed that, while the segment’s 2011 growth waned slightly compared with the five-year compound annual growth rate of 13.9%, it still consistently outperformed the overall beauty market.
Both of these markets are distinctly different as market leaders vary from region to region; moreover, within Europe, the dynamics of the naturals market vary significantly between countries. In Western Europe, the natural segment is becoming more mainstream, but it’s the largely untapped markets of Central and Eastern Europe where opportunities show great promise, according to Kline & Co.
In addition, Western European and North American shares of the total market have been decreasing over the last five years at the expense of the emerging markets of Brazil and China. The latter are expected to draw the focus of astute companies keen to establish critical footholds in these budding markets. Savvy marketers also are opening up and exploring new channels of distribution, allowing access to new consumers and ultimately broadening demand, Kline noted.
Large, predominantly German drug stores, such as DM, Schlecker and Rossmann, represent the fastest-growing pan-European channel. In the United States, traditional natural health food stores still lead the way; however, mass outlets, such as Walmart — which as an indicator of the retailer’s faith in the naturals’ market recently introduced its own private-label products — are quickly increasing in significance, Kline & Co. stated.
The benefits are manifold: By increasing the channels of distribution and allowing consumers easier access to natural products, both ultimately contribute to the segment’s growth.
Kline’s consumer industry manager Nancy Mills attributed the resilience of the natural personal care sector to ever-growing consumer awareness of health, environmental and sustainability concerns. "These drivers are near universal, but their influence varies significantly between markets,” Mills stated. “In Western Europe, consumers have a higher awareness and interest concerning product ingredients, business ethics and sustainability practices, and many are astutely avoiding products [that] are natural only in positioning. In Eastern Europe, where the movement is starting to blossom, consumers aren’t yet as discerning.”
“Natural personal care is not a fad, but a genuine movement that’s manifesting itself in ever diverse product applications,” Mills added. “The consumer is better educated, and this can serve the marketer well, particularly as credible certification standards are being implemented and recognized.”
The global market for natural personal care products is expected to maintain strong growth with a compound annual growth rate of almost 10% through 2016. The growth of truly natural products likely will outpace that of natural-inspired brands across most regions; however, natural-inspired brands will continue to dominate the global natural personal care market, according to Kline.
Ulta’s CFO Gregg Bodnar to step down
BOLINGBROOK, Ill. — Ulta has announced that it is implementing a CFO succession plan after Gregg Bodnar, the company’s CFO and assistant secretary, informed the company that because of a family health issue, he will be required to relocate to Michigan and will step down from his current position when a successor can be identified.
CEO Chuck Rubin and the company’s board, with the assistance of an executive search firm, will begin searching for a successor. In order to facilitate an orderly transition, Bodnar will remain in his present position pending the appointment of a successor and will assist in the transition. Bodnar joined Ulta as CFO in September 2006.
“While I regret that Gregg will be leaving the company later this year, I understand and respect his personal commitment to his family. Gregg has contributed greatly to Ulta, including building an excellent team that I am confident will maintain its strong performance. I am pleased that Gregg will continue in his current responsibilities and will assist in the successful hiring and onboarding of a new CFO,” stated Chuck Rubin, Ulta’s president and CEO.
Bodnar stated, “My decision to leave was made even more difficult given the strength of my relationship with Chuck, the management team and the board, and the confidence I have in the company’s strategy. I have enjoyed immensely being a part of the company’s success and look forward to its continued growth and remaining an investor in Ulta. However, I must attend to a family issue that requires me to relocate. I am confident that we have developed the strategy necessary to achieve a seamless transition. We have a very strong team in place across our organization, and I am dedicated to assisting Chuck and the board find the very best CFO and will remain in my position to provide an orderly succession.”
Ulta continues ‘positive momentum’ in Q4
BOLINGBROOK, Ill. — Ulta posted double-digit gains in same-store sales and net income during the fourth quarter.
Net sales for the quarter ended Jan. 28 rose 23% to $582.5 million. Same-store sales rose 11.5%, compared with an increase of 10.4% during the year-ago period.
Net income increased 53.8% to $46.3 million, or 73 cents per diluted share, compared with $30.1 million, or 49 cents per diluted share, in the year-ago period.
“As we look forward into 2012 and beyond, we are focused on building upon our successful strategies and determining priorities for the strong cash position we have developed,” stated Chuck Rubin, president and CEO. “Given the attractive returns from our new store program, we are further accelerating our square footage growth in 2012 to approximately 22%, or 100 new locations.”
Rubin also noted that its board of directors has declared a special cash dividend of $1 per share to shareholders of record as of March 20, with a payment date of May 15.
For the first quarter of fiscal 2012, the company expects net sales to be in the range of $452 million to $460 million, compared with actual net sales of $386 million in the first quarter of fiscal 2011. This assumes a comparable-store sales increase of 6% to 8%, compared with an 11% increase last year.