World's largest money manager takes majority stake in Creed fragrances; Alberto VO5 maker sells oral health, hair and skincare brands; 1.6 million Aussies use TikTok; and Coty appoints head of Jimmy Choo as new CEO.
World's largest money manager takes majority stake in Creed fragrances
Fragrance connoisseurs claim that you don't know perfumes unless you have tried a Creed fragrance once in your life. The Paris-based company was founded in 1760 by Englishman Henry Creed and is still family-owned. Long a celeb favourite, iconic juices such as Green Irish Tweed and Fleurissimo were inspired by movie legends, Cary Grant and Grace Kelly.
BlackRock, the world's largest money manager with US$7.43 trillion in assets under management, launched its Long Term Capital Fund in 2018 with the target of raising US$12 billion. Investors have injected US3.85 billion so far and the fund's first European acquisition is a majority stake in Creed. The brand is distributed by Agence de Parfum in Australia and Erwin Creed, a seventh generation family member, opened the Sydney flagship store in Double Bay in December 2018.
The financial details were not disclosed. Javier Ferran, the chairman of drinks giant Diageo, will become an investor and chairman of Creed. He will work closely with Olivier Creed, Erwin's father who currently helms the business, and has considerable experience in niche luxury brands. The core strategy will be to grow and expand Creed's business over the next three to five years, while preserving its heritage and expertise as the world's leading artisan fragrance company.
Alberto VO5 maker sells oral health, hair and skincare brands
High Ridge Brands filed for Chapter 11 bankruptcy in the US in December. One of the largest independent personal care companies in the US, its stable of 13 brands includes Alberto VO5 (known as VO5 in Australia), Zero Frizz, Reach and Thicker Fuller Hair. Two buyers have stepped forward - Tengram Capital Partners and an affiliate of the Perrigo company, the Ireland-based maker of private label OTC pharmaceuticals - to acquire two separate divisions of High Ridge.
Perrigo, an American company which shifted to Ireland in 2013 for tax reasons, turns over US$3.54 billion in annual sales - 70 per cent in the US. Since 2005, the company has made 14 acquisitions, including the Belgian pharmaceutical company, Omega Pharma, and Ranir Global Holdings, a world leader in private label oral care. An affiliate of Perrigo will acquire the oral care business of High Ridge Brands, including Reach and Dr Fresh, to extend its worldwide footprint in the category.
Private equity firm, Tengram Capital Partners, whose past and current personal care investments include NEST fragrances, DevaCurl and Lime Crime, will buy High Ridge Brands hair and skincare business, including the Zest, Alberto VO5, LA Looks, Salon Grafix and Thicker Fuller Hair brands.
The agreement will be conducted under Section 363 of the US Bankruptcy Code and will include a cash payment of US$120.5 million to High Ridge Brands. Perrigo estimates the acquisition will add US$100 million in net sales to its revenue base.
1.6 million Aussies use TikTok
TikTok, the short-film video app, reached the 500 million user milestone across 150 countries in 2018. A bare two years after its launch by Chinese tech company, ByteDance. Since debuting in Australia and announcing the opening of a local office last August, TikTok's aim of making Australia a key market has materialised. According to Roy Morgan Research, 1.6 million Aussies visit the website or use the app in an average four weeks. Over two-thirds - 1.1 million - are women and girls.
Organisations as diverse as the NFL and teeth whitening companies have created videos on the app as an increasing number of young people switch from Facebook and look beyond Instagram to express their creativity. Beauty companies overseas have been quick to see TikTok's potential in reaching young women and many cosmetic-focused tutorials have gone viral.
According to Roy Morgan, the top two demographics using TikTok are Generation Alpha (born after 2006) and Gen Z. Over 670,000 Australian Gen Zers use the app, followed by 537, 000 from Generation Alpha. Numbers drop to 308, 000 for Millennials and 88,000 for Gen X.
An important insight from the data revealed that although YouTube is still number one with Generation Alpha at 1.9 million, TikTok is now ahead of Instagram (490,000) and three times more popular than Facebook and Pinterest with the under-14s in Australia.
For brands trying to achieve cut-through with tweens and Gen Zers, the usage of TikTok is noticeably skewed to young women and girls, says Michele Levine, CEO Roy Morgan. A total of 1.2 million across Generation Alpha and Gen Z.
Coty appoints head of Jimmy Choo as new CEO
2019 was a year of change for Coty. Pierre Laubies, the former CEO of Jacobs Douwe Egberts, the maker of Moccona coffee, took over from Camillo Pane as CEO of Coty in November 2018. After an 18 month stint, Laubies will pass the baton to Pierre Denis during the European summer.
Denis is currently CEO of Jimmy Choo, the luxury shoe brand, and has held the position since 2012. During that time, the core brand reached sales of US$1 billion last year. With 30 years experience in luxury beauty and fashion, Denis is a veteran of LVMH, the world's largest luxury goods group, notably with the John Galliano and Christian Dior brands.
With the luxury division close to becoming the main cash cow for Coty, Denis will work to accelerate top line growth across the core fragrance, skincare and cosmetic categories. He will work closely with Chief Financial Officer, Pierre-Andre Terisse, who will add the newly-created role of Chief Operating Officer to his job specification.
Snippets from the Wires
- Direct-to-consumer and online sales and easy-to-use products are fast-tracking the global sheet face mask market, reports Allied Market Research. Worldwide sales are expected to reach US$392.1 million by 2026, says the data tracker. The cotton/microfibre segment represents close to one-third of sales and major players in the category include Korea's Tony Moly and AmorePacific, the Estée Lauder Companies, L'Oréal and Sephora.
- Chemist Warehouse has 12 stores in New Zealand in Auckland, Hamilton and Tauranga. The leading pharmacy chain will open its first store on the South Island in April in South City Shopping Centre in Christchurch. The company has a target of opening 10 more Kiwi stores by year's end.
- Germany is the largest natural and organic skincare market in Europe. According to Naturkosmetik Konzepte, sales in both sectors reached 1.38 billion euros ( AUD$2.32 billion) in 2019, attracting an additional 800,000 consumers.
- Whole Foods Market, acquired by Amazon in 2018 for US$13.7 billion, operates 500 stores in North America and the UK. The natural and organic foods giant also has a big footprint in the beauty sector. According to the company's cosmetics buyers, the top five trends in natural beauty for 2020 are: bakuchiol (a vegan alternative to retinol), blue light defence, watermelon as a hero ingredient, body masks and naturally-derived glycolic acid.