Prestige Beauty Brings In $2.5 Billion for Q2 2014

Posted: August 21, 2014

In the second quarter of 2014, sales of U.S. prestige beauty products were $2.5 billion, a 5 percent increase from Q2 2013, with sales growth across each of the three primary categories.

“The robust performance of prestige beauty in the second quarter is quite encouraging! Primary prestige segments continue to be market drivers, but the industry is realizing the opportunities and revenue that lie among smaller, more specialized segments,” said Karen Grant, vice president and global industry analyst, The NPD Group, Inc. “With the current momentum as a platform, we expect the next two quarters to be positive, leading to annual performance a bit softer but in line with the low to mid-single-digit growth trend of 2013.”

According to The NPD Group’s BeautyTrends, for U.S. prestige beauty category sales performance (in dollar sales, April–June 2014 vs. April–June 2013), makeup Q2 2014 dollar sales were $1 billion, up 8%; skin care Q2 2014 dollar sales were $844 million, up 2%; and fragrance Q2 2014 dollar sales were $632 million, up 5%.

Face products were the growth drivers in makeup, accounting for nearly half of category sales and outpacing category growth slightly. Eye and lip makeup combined account for nearly 46% of the category dollar sales, almost as much as face makeup, and their combined growth was greater than their face counterparts. Nail was the only makeup segment with sales declines in Q2 2014.

Soft skin care sales did continue in Q2 2014; however, there are highlights within the face segment and sets/kits. As in makeup, face products were skin care’s growth drivers, representing more than a third of the sales and setting the pace of the category performance. Sets/kits represent just 10% of skin care dollar sales, but their 4% growth outpaced the category.

In fragrances, juices account for 65% of total prestige fragrance sales, and they continue to drive the category with 7% dollar growth compared to Q2 2013. Fragrance ancillary sales add to the prestige category growth with a 3% increase in dollar sales, though at just 6% of the market, it’s a subtle note. “Consumers are looking for something new and fresh with each season. Delivering on this demand while sustaining engagement with established products is the balancing act that will continue to prove its benefits for the prestige beauty industry,” added Grant.

Lip Lock: Lip Cosmetics Segment Grows Nearly 9% 2012-2014

Posted: August 20, 2014

It’s not just lip service–according to new research from Mintel, after experiencing a 2% decline from 2011-2013, the lip cosmetics segment posted gains of nearly 9% between 2012 and 2014, with sales poised to reach nearly $1.4 billion in 2014. While lip cosmetics still account for the smallest percentage of total color cosmetics sales, it is currently the strongest performing segment in terms of growth, compared to 6.4% ($4.8 billion) growth for the facial cosmetics market and 4.2% ($3.4 billion) gains for eye makeup during that same time period.

Bold lip colors continue to be the on-point trend, with nearly one third (32%) of lip product users aged 18-24 looking for intense lip colors, compared to less than 20% of respondents aged 25+. This trend-driven and cyclical nature of the category has elevated the status of lip makeup, making it a must-have item for many women.

Lip cosmetics are used by the vast majority of women, with nearly nine out of 10 (87%) reporting usage. Lip balm has the highest overall penetration, with 60% of women using it, followed by lipstick at 58%, although there is a definite generation gap. The 18-24 demographic uses lip balm to lipstick to the tune of 72% vs. 50%, while the over 65 senior set uses lipstick over lip balm 82% vs. 45%. Of those who use lip cosmetics, 67% look for moisturizing/hydrating claims while 61% seek out long-lasting lip wear and almost half (48%) are swayed by lip-softening properties.

“Lip cosmetics have the highest overall reported use among color cosmetics. Lip balm, lipstick and lip gloss all have similar rates of penetration, suggesting that many women rely on a suite of lip products depending on the occasion or desired look,” says Shannon Romanowski, beauty and personal care analyst at Mintel. “The addition of skin care benefits, including moisturizing and softening, also provide some added functional benefits. Sales of lip products are on the rise, as more women may be returning to the segment.”

Although Mintel research finds color cosmetics users rely on mass brands, it seems many are inclined to turn to prestige brands for facial cosmetics. Forty-four percent (44%) of highlighter/illuminator users purchase from a prestige brand compared to only 24% of lip gloss users who bought prestige.

Romanowski adds, “Facial cosmetics, in general, are viewed as higher-risk purchases—women want to be sure that products are appropriate for their skin type and tone and therefore rely on in-store samples and consultants for guidance. On the other hand, users of lip cosmetics, especially lip balm, are more inclined to purchase from budget brands in comparison to users of facial and eye cosmetics. Lip products are likely perceived as low-risk purchases, driven in part by their lower prices in comparison to face and eye makeup. Ultimately, retailers are challenged to help women navigate the sometimes overwhelming color cosmetics category, especially when it comes to higher-risk—and higher-priced—purchases such as facial cosmetics.”

CEW(UK) Debuts ‘New Face’

Posted: August 20, 2014

CEW(UK) announced its new image in its mission to move beauty forward. To that end, CEW(UK)is unveiling a new logo and revamped website that will allow members to navigate more easily and utilize all of the new and improved benefits that will follow in the upcoming months. This follows the revamp of the U.S. CEW, which now features more networking and mentoring opportunities through its website, as well as other member perks.

Caroline Neville, president of CEW(UK), said, “Today, I am pleased to introduce the ‘new face’ of CEW. Over the last 22 years, CEW in the U.K. has grown and now boasts over 1,000 members. Add CEW members in the USA and France, and we are 6,000 members from 1,700 companies. CEW inspires the next generation of leaders who will shape the future of beauty.”

With the rebrand, CEW(UK) have created benefits and programs to increase the value of membership to members. It also aims to help move careers forward and keep members one step ahead with unparalleled access to industry influencers and talks and networking opportunities addressing topics that are shaping the beauty industry and by recognising achievement.

For more information, visit

Men in India Seeking Fragrance to Promote Themselves

Posted: August 19, 2014

At present, according to market researcher Canadean’s “Consumer Trends Analysis: Understanding Consumer Trends and Drivers of Behavior in the Indian Fragrances Market” report, men are consuming more fragrances than women in India, illustrating a strong male interest in the scent market. This growing trend will present fragrances manufacturers with prime opportunities for targeting Indian men, who seek out masculine fragrances to aid their professional image. As a result, Canadean data forecasts the fragrances market in India to grow at a CAGR of 26% from 2013 to 2018.

Indian men are becoming conscious about their image, which can be partially attributed to the building pressure to succeed in the workplace. Rapid urbanization, as men have flocked to the major cities in search of higher paid work, has led to continual pressure and competition in office environments. Kirsty Nolan, analyst at Canadean, comments, “Men in this scenario want professional and sophisticated fragrances that complement their workplace image, believing that this will help aid their career success.”

Men in India also are conscious about the price, meaning that brands, manufacturers and retailers need to be careful in the positioning of their fragrances. According to Nolan, “There is a willingness to pay for quality across India as 22% of fragrances consumption is motivated by this need; however, this is followed by 20% of consumption motivated by the search for better value. Fragrance companies need to ensure that they are providing men with an affordable, high-quality, daily wear that can be incorporated into the average man’s grooming routine.”

It was traditionally cultural for Indian men and women to use the same, unisex fragrances with scents which, in the West, would be exclusively associated with women. Rural men and those in smaller towns are still using these fragrances. As urbanization increases and a fascination with Western culture spreads beyond the cities, men are opting for more masculine fragrances that better suit the evolving culture, such as those with spicy, woody, oceanic and citrus notes. This opens huge opportunities for fragrance companies to explicitly target men with masculine fragrances and accompanying marketing campaigns.

Rhône Capital Makes Investment in Elizabeth Arden

Posted: August 19, 2014

With the announcement of its fourth fiscal quarter and year ended June 30, 2014, financial results, Elizabeth Arden Inc. also announced that investment funds affiliated with Rhône Capital have agreed to purchase $50 million of redeemable preferred stock of Elizabeth Arden and also will receive warrants to purchase 2.5 million shares of the company’s common stock at an exercise price of $20.39 per share, representing approximately 7.6% of the company’s outstanding common stock on an as-exercised basis.

Rhône Capital also has advised Elizabeth Arden that, subject to market conditions and applicable legal or regulatory approvals, it intends to increase its ownership of the company’s common stock over time. Rhône Capital has agreed to enter into a standstill with Elizabeth Arden, pursuant to which it will not acquire more than 30% of the company’s common stock after giving effect to the exercise of the warrants. Dividends on the preferred stock will be payable at a rate of 5% annually.

M. Steven Langman, co-founder of Rhône Capital, commented, “Having assessed the opportunity, and focused on the market positioning of Elizabeth Arden, the quality and potential of Elizabeth Arden’s brand portfolio, and the quality of the company’s management team, we firmly believe that this represents a unique investment opportunity to partner with a proven entrepreneurial organization and help them achieve their ambition to be a leader in the global beauty industry.”

E. Scott Beattie, chairman, president and CEO of Elizabeth Arden, added, “I am very excited to have Rhône Capital as an equity partner, to support the turnaround of our business in the short-term and the continued global growth and development of our brands and organization in the future. I am confident that we have a compelling business plan to improve the company’s performance. Rhône Capital’s investment and commitment to Elizabeth Arden in light of its significant experience in our industry is evidence that Rhône Capital shares our optimism and belief in the outlook for the company.”

Rhône Capital is an investment firm focused on global investments in businesses with international presence and global scale, with particular expertise in the consumer product, retail and beauty sectors and with a track record of adding value in public companies as a minority investor. In connection with its investment, Rhône Capital has the right to designate one member to Elizabeth Arden’s board for so long as it maintains its initial percentage interest in the company, and the right to designate an additional member in the event that Rhône Capital acquires an ownership stake in the company’s common stock of 20% or more on a fully diluted basis.

Kardashians to Launch Hair Care Line

Posted: August 18, 2014

Kourtney Kardashian, Kim Kardashian West and Khloe Kardashian—who also have a color cosmetics line in association with BoldFace Group—and hair care company Farouk Systems announced the launch of Kardashian Beauty, a line that will feature professional, salon-quality hairstyling products, tools and accessories at an approachable price point. The Kardashian Beauty line will debut in spring 2015.

Known for setting hair trends and constantly updating their hair styles, the Kardashian sisters continue to help define the category with their iconic manes and styling. The Kardashian Beauty products will include high-performance, innovative ingredients designed to create styles for signature Kardashian looks whether they be casual and bohemian or red carpet-inspired. Performance won’t sacrifice health with products also designed to deliver radiant, beautiful hair that is strong, healthy and brilliant.

“Farouk Systems is a company of hairdressers dedicated to creating beauty, new trends and innovative styling products, so the partnership with Kourtney, Kim and Khloe to introduce Kardashian Beauty was a natural fit,” said Basim Shami, CEO of Farouk Systems, Inc. “Our team worked hand in hand with the sisters to create a premium product line directly inspired by their iconic styles and individual hair needs, while also honoring our company’s commitment to offer superior quality professional products.”

While performance and quality were top of mind when developing the line, Kardashian Beauty reflects Kourtney, Kim and Khloe’s desire to bring high-end products to their fans at an affordable price point.

“We have been developing Kardashian Beauty carefully with our fans’ needs in mind as well as our individual hair care needs,” said the Kardashian sisters. “Our personal desire for healthy, beautiful hair and hands-on product development has allowed us to design products we felt were missing in the market.”

CEW(UK) Names 2014 Lifetime Achievement Honoree

Posted: August 18, 2014

CEW(UK) announced its 2014 Lifetime Achiever—Suzy Menkes, international editor of Vogue.

Imaginative, original and independent, Menkes has built a reputation for honest reporting and telling fashion like it is. Educated at Cambridge University in English literature and history, Menkes was spotted by Charles Wintour (father of Anna Wintour), who appointed her fashion editor of the London Evening Standard at age 24. Over three decades, her reviews and insights have appeared in the world’s leading press, from The Times of London to the International Herald Tribune. The author of several books, including The Royal Jewels and The Windsor Style, Menkes now brings her unique take on fashion to Condé Nast International online as international Vogue editor.

One of the best-known and best-loved fixtures of international fashion weeks, Menkes has been decorated with the Legion d’Honneur in France and awarded a British OBE. She divides her time between London and Paris and has an extended family via her three sons.

The 2014 CEW Achiever Awards, which promises to be an exciting and glamorous evening for CEW(UK) and its honorees, takes place on Thursday, November 20, 2014, at the Jumeirah Carlton Tower Hotel in Knightsbridge, London. Additional information available here.