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THE BEAUTY REPORT: TOP 5 SUPPLIERS Major acquisition to alter beauty landscape


Following Coty Inc’s huge acquisition of 41 Procter & Gamble beauty brands, the 2015 beauty supplier ranking – as featured below – is likely to look a little different by the end of this year, as Charlotte Turner reports.


W


hilst many of travel retail’s most successful perfume & cosmetics


companies registered sales growth in 2016, many also admitted that it wasn’t easy. This was certainly the case for the No 1 beauty giant in travel retail, L’Oréal. Having said this, L’Oréal Travel


Retail reported that makeup was its ‘most dynamic category’ in 2016, in a year in which the global beauty powerhouse weathered challenges from volatile global markets. In an annual report, the company


praised the ‘remarkable success’ of its Yves Saint Laurent and Giorgio Armani brands in Asia, alongside high sales for Lancôme et Shu Uemura in the lip segment, as all L’Oréal Group brands contributed to growth. Makeup sales have also been


increasing for Estée Lauder Companies in recent months, primarily driven by the company’s fiscal 2017 second quarter acquisitions of Too Faced and BECCA; strong double-digit


increases


from Tom Ford in every region; double-digit gains from Smashbox and La Mer, and solid growth from Estée Lauder. In its 2017 fiscal Q3 results


statement, Fabrizio Freda, President and Chief Executive Officer, said that ‘virtually every brand’ contributed to travel retail sales growth for the company. “Our business in global travel retail and in China was exceptionally strong, driven by strong sales gains in virtually every brand.


“Our mid-sized and luxury brands, as well as online and specialty-multi retail channels, also led growth. Additionally, our recent acquisitions of Too Faced and BECCA performed above expectations.” Although clearly Coty and P&G’s [initially announced


Richemont moves for 5% Dufry stake


huge merger


in 2015] grabbed the headlines in 2015/2016, third-placed LVMH also had an announcement of its own this year.


Top 5 in beauty: P&C’s major players dissected


Self-consumption drives sugar confectionery sales


Big moves from big players In April, the Arnault Family Group announced that it was making a ‘simplified public offer’ to acquire the remaining shares in Christian Dior. LVMH is also looking to acquire Christian Dior Couture, effectively reuniting it with the Parfums Christian Dior brand; the latter being already part of the LVMH Group. Although LVMH sits in third


Also inside


June 2017 20


YEARS 1997-2017


Latin American DF&TR Market Special Report


Gucci Bamboo reimagined following Coty's acquisition of the brand among 40 others in the P&G portfolio.


Lagardère TR revenue hits $830m in Q1


Featured Interview: ASUTIL’s José Luis Donagaray


occurring in travel retail locations around the globe. This included the launch of Chanel


Budapest Airport facilitates real business model changes... p21 Kam Jandu


This content is for subscribers only. To receive a full digital copy of the June issue,


place in the beauty supplier ranking – thanks in large part to Parfums Christian Dior – Coty’s power play to acquire 41 P&G brands is certainly going to upset the table by the end of 2017. In 2015, news first broke of Coty


plus 12 monthly print editions and the critically acclaimed TRBusiness Top 10 International Operators Report, please visit


Inc’s deal with Procter & Gamble to merge the latter’s fine fragrance, colour cosmetics, and hair colour businesses via a tax-free Reverse Morris Trust transaction, to build a company with pro forma combined annual revenue of more than $10bn. In a major exclusive interview with


www.trbusiness.com/subscriptions


TRBusiness [which featured in the May issue of the magazine], Coty’s Senior Vice President of Global Travel Retail Philippe Margueritte said this merger is of the most – if not the most – important in beauty over the past decades. [Read more about the merger on p54]. Last, but not least, in fifth place


Kendall Jenner, Estée Lauder's world- famous poster girl, is helping to propel ELC's makeup sales.


JUNE 2017


Chanel continued to ramp up its travel retail presence in 2016 [at least in terms of its perfume and cosmetics portfolio] with several major high profile launches and activations


P&C category share of total DF&TR market2


Global P&C sales ($bn)2


Total market2 2 3


4 5


Estée Lauder Companies


LVMH


Procter & Gamble Chanel Group


31.9% 19.76 62.0


Source: Generation Research and TRBusiness figures from 2015. 1


Data provided by Generation Research. 2 Data taken from


TRBusiness Global Operators Report published in 2016 using 2015 figures.


TRBUSINESS 43 3


4 5


Beauty ranking in Global DF&TR1


1 L'Oréal Group


TALLINK’S MAGNUS SKJÖRSHAMMER | TFWA ASPAC REVIEW | SKYSERVICE FORUM | FTE & BARTA PREVIEW | ADVANTAGE INTERNATIONAL | L’ORÉAL | ESTÉE LAUDER | COTY | P&G | LVMH | CHANEL | M1ND-SET | PVM | MARS | RICOLA | HARIBO | FERRERO | NOW & THEN


“Our business in global travel retail and in China was exceptionally strong, driven by strong sales gains in virtually every brand.”


Fabrizio Freda, President and Chief Executive Officer, Estée Lauder Companies


N°5 L’Eau – the fifth interpretation of the all-time classic in 2016. For more on Chanel’s travel retail activity


TOP 5 SUPPLIERS IN BEAUTY (2015) Supplier


Beauty ranking in Global DF&TR1


1


Brand Chanel 2 Lancôme


Estée Lauder


Dior


Giorgio Armani


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