BEAUTY CARE

Multibenefit CC creams, foundations dominate

BY Antoinette Alexander

It’s as simple as B-C-D. Multifunctional makeup continues to — and will continue to — drive significant growth in facial cosmetics.

(For the full category review, including sales data, click here.)

“The upturn of BB cream usage is consistent with the staggering increase of new product launches over the past year combined with strong marketing efforts designed to educate women about product benefits,” stated Shannon Romanowski, beauty and personal care analyst at Mintel. “The multifunctional benefits of BB creams are broadly appealing, as the majority of makeup wearers agree that multifunctional makeup saves them time, money and allows them to reduce the number of products they use. With the recent emergence of CC and DD creams, the market is sure to continue its upward trajectory.”

According to Mintel, the color cosmetics category has grown 13% from 2008 to 2013 to an estimated $9.3 billion.

While these all-in-one products continue to enjoy the limelight, the downside is that some women are swapping out current products for such multifunctional makeup instead of making incremental purchases.

Mintel expects sales to increase 2% to 3% on a yearly basis through 2018.

Largely unknown in the United States prior to 2011, BB creams have made their mark here with a nearly 50% increase in product launches in 2013 compared with 2012. Now, the facial segment is giving way to the newest kid on the alphabet cream block: CC creams.

Launched in late 2012, CC creams, or “color control” creams, are now increasingly popping up on mass-market shelves.

Euromonitor International has found that the rise of BB and CC creams has led to a 29% value growth for the “other facial makeup” segment.

Ranked as the most important benefit in foundation, 76% of foundation users rated “evens out skin tone” as an important benefit, according to the “Makeup In-Depth Consumer Report 2012” by the NPD Group. “Evens out skin tone” also is ranked as the most important foundation benefit by each age and race/ethnic group evaluated.

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Coty forms new subsidiary in South Africa

BY Antoinette Alexander

NEW YORK — Beauty company Coty has announced the formation of a new, wholly owned subsidiary in South Africa in order to direct, manage and fully operate all of its South African business as well as its business in 13 other African countries.

Through a strategic agreement with long-term partner Indigo Brands Proprietary, a wholly owned subsidiary of AVI, Coty has secured Indigo and other subsidiaries of AVI as the exclusive manufacturer, distributor and marketer of Coty’s brands. For the past 13 years, Indigo has served as the exclusive licensee of Coty’s mass brands in South Africa.

This new agreement will allow Coty to closely manage its business, give it more financial freedom to promote Coty mass brands sales growth and enable Coty to increase its footprint in the region, the beauty company stated.

"This enhanced operating agreement will allow us to drive growth in Africa," stated Michele Scannavini, CEO of Coty. "We have been very happy with our partnership with Indigo and look forward to working with AVI. Our 13 year history of successful collaboration is a positive sign of even better developments yet to come."
 

 

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Coty reports Q1 results

BY Antoinette Alexander

NEW YORK — Coty posted a decline in net revenues during the first quarter, driven by a slowdown in the mass nail and fragrance markets, and consequently reduced low orders and trade destocking particularly in the U.S. mass channel.

“In the first quarter we faced a significant market slowdown in the fragrance and nail categories, particularly in the United States. This triggered heavy trade destocking and a slower order pace that meaningfully affected our U.S. mass market and overall business,” stated Michele Scannavini, CEO of Coty. “On the other hand, we are very pleased with our growth in the prestige channel and in the emerging markets, areas we had targeted for accelerated development.”

Net revenues during the quarter ended Sept. 30 totaled $1.2 billion, down 2.6% like-for-like and 2.9% as reported from the prior year. The company noted that the like-for-like decline was driven by the Americas, which experienced a 10% drop largely due to consumption slowdown in the mass nail and fragrance markets.

Net income increased to $93.5 million from $86.7 million in the year-ago period.

The decline in revenues was concentrated in color cosmetics, particularly Sally Hansen, which was impacted by the sudden and sharp trend inversion in the U.S. nail market, as well as increased competitiveness in the category.

Meanwhile, Rimmel continued to grow during the quarter. Over the last 12 months, Rimmel has been the fastest growing color cosmetics brand within the top 10 in the U.S. mass market, the company stated.

Fragrances grew 1% like-for-like, led by power brands Calvin Klein, Chloe and Davidoff. Segment growth also was driven by the strengthening of the Roberto Cavalli brand through new launches Just Cavalli for Him and Just Cavalli for Her, and the new launch of Katy Perry’s Killer Queen. Overall growth, however, was mitigated by the decline in certain celebrity fragrances and by expired licenses, including Kenneth Cole.

In the skin and body care segment, net revenues slipped 2% on a like-for-like basis, due in part to declines in the TJoy brand, mostly because of distribution network reorganization.

Looking ahead, the company stated that it expects to see the challenges coming from the market slowdown and trade destocking in the United States, and from the highly promotional environment in Europe, to continue in the next quarter. In the second half, Coty is looking to return to top-line growth in line with or better than the markets where the company competes, fueled by further acceleration of its growth in emerging markets, innovation and investment plans supporting its power brands.

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