coping with covid-19 - wwd
TRANSCRIPT
A Publication of WWD
ISSUE #2MARCH 6, 2020
Coping With COVID-19With Asia accounting for up to half of the sales of beauty’s biggest companies — and
China a key source of production and components — the industry, like many others, is trying to gauge the impact of the coronavirus. For reports from across Asia,
Europe and the U.S., see pages 5 to 10. PLUS: Skin Care’s Latest Launches, The Hottest Hand Sanitizer Around and This Week’s Executive Moves.
ILLUSTRATION BY MATTHEW BILLINGTON
Beauty Bulletin
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2
MARCH 6, 2020
THE BUZZ
Loewe opens their first New York City store on
79 Greene street.
RED HOOK ¬ Kith and Estée Lauder are gearing up for round two of their collaborative effort, launching on March 7 at Kith stores and online and at Selfridges London. The first collaboration consisted of skin-care products bearing Estée Lauder’s branding from 1946. The second partnership launches in celebration of International Women’s Day with four products at $195, including the Pure Color Envy Lipstick in “Kith Red.” The products come in custom packaging inspired by Estée Lauder’s original packaging and then in translucent plexi cases that double as a clutch and feature the Kith monogram pattern. The partners are also hosting launch events on March 7 and 8 at Kith Soho in New York City and Selfridges, with custom spaces offering product customization. Customers can choose one of 12 shades of lipstick and one of five shades of powder. —Obi Anyanwu
¬ Coronavirus has spawned some bizarre social media behavior.Face masks have taken over the zeitgeist, with influencers wearing the protective coverings as a health precaution — or fashion
statement? Or, perhaps, both?Model Bella Hadid, shoe designer
Amina Muaddi and YouTuber Logan Paul have all shared Instagram posts of themselves in masks, though Paul's was the
most extreme. The controversial YouTuber seemed to be poking fun at COVID-19 — which has killed more than 3,100 people, according to the latest press reports — while wearing a gas mask, captioning his post, "f--k the corona virus [sic]."
Face masks are in demand due to the coronavirus outbreak, but the Centers for Disease Control and Prevention recommends that only those who show symptoms — and not those who are well — should wear face masks to prevent the virus from spreading, according to its web site. Masks, it seems, are not enough to keep one from contracting the virus. A better option: washing one's hands. —Alexa Tietjen
¬ Maybelline is bringing back its nail business exclusively to Dollar General.
The L'Oréal-owned brand, which has mostly been able to avoid the sales slump its legacy peers are facing in the U.S. mass market, is bypassing drugstores and going straight for the dollar channel with the launch of Maybelline Fast Gel exclusively at Dollar General on March 6. Fast Gel will also be available on dollargeneral.com.
The new line consists of 18 shades including a top coat, and is described as an "extended-wear formula." The polishes are priced at $2.50 each.
Amy Whang, senior vice president of Maybelline, said creating Fast Gel for Dollar
General was an "opportunity for incremental growth." "It's certainly a retailer that we see the American consumer moving to."
The last time Maybelline sold nail polish in the U.S. was 2015. Nail, like makeup, has been a challenged category in the mass market.
Maybelline, which for years managed to stay ahead of the market, saw sales in tracked channels slip in 2019. Sales were down 4.1 percent for the 52 weeks ending Feb. 22, according to Nielsen scanner data. Mass beauty was down 0.7 percent for the year.Dollar General already carries an assortment of Maybelline franchises, including Fit Me and Great Lash Mascara. —Ellen Thomas
Maybelline to Launch Fast Gel Nail at Dollar General
The Thread: Face Masks Are Taking Over the Zeitgeist
Maybelline Fast Gel
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Product Love The most engaging skin-care and makeup items on social media for February.
CHERRYPICK IS a social media analytics firm that measures product engagement at the stockkeeping-unit level. Here, their top 10 for skin care and makeup products that lit up social platforms in February. In the former category, attributes like glow and radiance garnered the highest “POPI” score (Cherrypick’s metric which measures the relative percentage of demand for a specific product across social media.) Huda Beauty’s much anticipated skin-care launch, Wishful Skin, generated the most demand, and Milk’s latest addition to its Vegan Milk line was in the top 10, too.
1. wishful skin
Yo Glow Enzyme Scrub
2. first aid beauty Facial Radiance Pads
3. fourth ray beauty A-Ha Moment Exfoliating Enzyme Mask
4. kate somerville
Kx Active Concentrates Ceramides
+ Omegas Serum
5. kylie skin by kylie jenner Foaming Face Wash
6. glow recipe
Watermelon Glow Ultra-Fine Mist
7. charlotte tilbury Magic Eye Rescue
8. milk makeup
Vegan Milk Cleanser
9. derma e Purifying Gel Cleanser
10. wet-n-wild x Bretman Rock
Jungle Rock 3-in-1 Face Mist
TOP 10 SKIN CARE
1. jeffree star cosmetics
Blood Lust Palette
2. benefit cosmetics Precisely, My Brow Pencil
3. hauslabs Le Monster Matte Lip Crayon
4. colourpop cosmetics
Lilac You a Lot Shadow Palette
5. anastasia beverly hills
Amrezy Palette
6. too faced Born This Way
Super Coverage Multi-Use
Sculpting Concealer
7. fenty beauty by rihanna Pro Filt’r Hydrating Primer
8. colourpop cosmetics
Ultra Blotted Lip
9. urban decay All Nighter Matte
Setting Spray
10. pat mcgrath labs
Skin Fetish Sublime
Perfection Foundation
TOP 10 MAKEUP
3
MARCH 6, 2020
NEWS FEED
ANDREA LISBONA KNOWS why you don't like hand sanitizer.
The Barcelona native is the
founder and chief executive officer
of Touchland, a hand sanitizer brand
whose moisturizing mist looks like it
walked out of an Apple store. For the
past decade, Lisbona has immersed
herself in the niche world of hand
sanitizers and the complaints such
products tend to receive — the sticky
residue they leave behind, the dry
skin they cause, the inevitable vodka
smell — and thinking of ways to
reverse them.
In late 2018, she launched
Touchland's direct-to-consumer
business. The Miami-based company,
she said, has since done about $2
million in sales.
"What we're doing is kind of like
what Nespresso did with the coffee
market: taking a category that has
been forgotten for 20 years and
improving it," Lisbona said. "[It's]
a whole new market for the beauty
generation."
In December 2018, a month after
launch, Touchland's average order
value was $19. Now, it's $50. Sales
have jumped even more — 900
percent, to be exact — since the
outbreak of coronavirus.
"We don’t have more buyers, but
the buyers we have buy 10 times
more," Lisbona said. "From $2,000
a day to $20,000 a day — and
it’s been maintaining for the last
three weeks."
In February, Touchland entered
1,200 Ulta doors. Its products are also
sold via Amazon, Urban Outfitters
and Revolve.
The company recently raised
$1.75 million in its second round
of funding, led by Align Ventures
(an investor in Billie and Hims),
Spring St. Group and two more
venture capital firms. Touchland was
originally born out of an acceleration
program, Zobele Group's Join and
Win program, as well as a Kickstarter
campaign that reached its funding
goal in 24 hours.
"The Kickstarter campaign ended
up being 450 percent funded,"
Lisbona said. "The best part is 50
percent of the buyers were from
U.S., so it was a reassurance for us to
launch in the U.S."
Touchland's Power Mist — which
comes in a variety of scents such as
watermelon, cinnamon and lavender
— is a blend of aloe vera, essential
oils and 67 percent ethyl alcohol.
It's cruelty-free, vegan and TSA-
friendly, and each 1.3 fl-oz. bottle, $12,
contains at least 500 spritzes.
The bottle, though, is just as
important as the formula. During
the development process, Lisbona
challenged her team to come up with
a design that follows the Golden
Ratio. The result is a thin, white
bottle, almost the height and width
of an iPhone.
Touchland's early adopters
were Millennial women, but its
demographic has since widened.
The company was growing about 20
percent month over when suddenly,
in June 2019, sales tripled online and
conversion jumped from 3 percent
to 9 percent. The growth correlated
with a feature in the July issue of Real
Simple — a discovery Lisbona made
after calling customers directly to ask
them how they heard about the brand.
"The Millennial target buys for
themselves, but the Real Simple
target, they are buying in bundle
and giving away," she said.
Pure DesignAt a time when hand sanitizers are on every desk, Touchland is combining form and function to drive growth. BY ALEXA TIETJEN
“MY BEAUTY ICON IS David
Beckham,” said Helen Mirren to a
room of laughs at a panel hosted
by L’Oréal in Los Angeles. “He’s
gorgeous. And he’s metrosexual,
which I love…I love David Beckham.”
“The tattoos,” chimed in Viola Davis.
The two actresses, 74 years old and 54
years old, respectively, are spokeswomen
for L’Oréal’s newest campaign — Age
Perfect, a line dedicated to women who
are aged 50 years and older.
On a more serious note, Davis said
her beauty icon was her mother.
“And I always say, Miss Cicely Tyson.
That was it for me. It started and
ended there,” said the producer and
actress, who’s the first black thespian
to receive the “Triple Crown” of the
industry, receiving an Oscar, Emmy
and two Tony awards.
What made her say yes to L’Oréal?
“They mentioned that this is the first
time we’ve had a woman of your age,
54, a dark-skinned black woman as a
global brand ambassador,” Davis told
WWD earlier in the day. “My big word
at this point in my life is legacy. What
do I want my legacy to be? What you
leave behind has to be something that’s
bigger than yourself, something that
people can benefit from in their spirit.
“I know what Miss Tyson did
to me when I saw her in ‘The
Autobiography of Miss Jane Pittman’
when I was seven, eight years old,”
she continued. “It made me believe
that I could dream, that I could be
someone.…I would love to give that
gift to another girl of color — to any
girl of course, but to any girl of color,
absolutely. It’s a part of my legacy.”
Looking back, when it comes to
her definition and idea of beauty, she
would tell her younger self that “she
was enough,” she shared. “L’Oréal
has the perfect mantra which is, 'I’m
worth it.' We’re worth it. You’re worth
it. You cannot build on a foundation
of anything other than self-love.”
Working in Hollywood, she said,
continues to be a challenge: “I’ve
experienced threefold: being a
woman, being a woman of 54 and
being a woman of color. That’s a triple
whammy. You want to talk a lack of
roles? It’s of biblical proportions. You
have to control the narrative.”
She’s doing just that with the
production company she runs with
her husband Julius Tennon, JuVee
Productions. She wants to produce
“everything,” she said with a smile,
donning a bright red lipstick. They’re
working on a number of projects,
including an adaptation of the novel
“The Personal History of Rachel
DuPree,” as well as a “black Golden
Girls,” and a biopic on former First
Lady Michelle Obama.
“My imagination is the only limit
to what our production company can
do,” added Davis. “And there is no
limit in my imagination.”
Viola Davis on Aging, Inspiration and Leaving a LegacyThe recently minted L'Oréal Paris spokeswoman spoke as part of the brand's new Age Perfect launch. BY RYMA CHIKHOUNE
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Touchland’s sales had soared even before the coronavirus outbreak.
Helen Mirren and Viola Davis joined forces for LOréal Paris Age Perfect Cosmetics.
4
MARCH 6, 2020
WEEKLY ROUNDUP
The Latest From WWD Fashion.Finance.Media.Retail.
ERIK NORDSTROM
¬ Nordstrom Inc. elevated Erik
Nordstrom to chief executive officer, while his brother
Pete has been named president and chief brand officer. The
new titles reflect their current and ongoing
responsibilities. Previously, they were
both copresidents.Erik Nordstrom said:
“These titles help clarify our respective roles, as we strive to maximize
our impact both as individual leaders and
as a team. Pete and I continue to be partners in ensuring Nordstrom’s
success, and we are both focused on
executing our long-term plan. We look
forward to continue working with our board to deliver on our shared vision for the future of
Nordstrom.”The management
changes came as the department store
retailer reported that fourth-quarter net
earnings dropped to $193 million compared
with $248 million during the same
period in fiscal 2018. Fiscal 2019 included
$29 million in charges, after tax, primarily
representing non-cash asset write-downs resulting from the
integration of Trunk Club in addition to debt
refinancing costs.—David Moin
¬ L’Oréal USA, The Estee Lauder Cos. Inc., Procter & Gamble Co. and Unilever were among the beauty companies that made the annual list of "Top Companies for Executive Women" compiled by the National Association for Female Executives.
The list recognizes U.S. companies that have a strong focus on best practices that move women to senior ranks, including
mentoring, sponsorship, executive succession planning and leadership development training. It also highlights corporate cultures of accountability for gender-equity results, including the involvement of the ceo and top leaders. In the fashion, retail and beauty world, those companies that made the top 70 companies also included Chico’s FAS, Kendra Scott, Kohl’s, PVH and Rent the Runway. —Lisa Lockwood
¬ Target Corp. said market share gains in beauty and apparel contributed to stronger fourth-quarter earnings, although sales suffered from a disappointing holiday period and weak demand in toys and electronics.
Earnings per share for the fourth quarter ended Feb. 1 of $1.69 a share exceeded analyst expectations of $1.65, but revenue of $23.4 billion fell short of Wall Street’s $23.5 billion projection. Same-store sales increased 1.5 percent, in
line with expectations.Fourth-quarter comps
reflected a 20 percent increase in comparable digital sales, while full-year comparable sales advanced 3.4 percent, reflecting comparable digital sales growth of 29 percent.
Beauty, an area in which Target continues to invest, “was driving acceleration in our performance. It’s gone from being strong to even stronger,” Brian Cornell, chairman and ceo, said. —Sharon Edelson
¬ The coronavirus is upending the spring fashion show calendar, with cancellations this week by Giorgio Armani, Versace and Ralph Lauren.
Armani has postponed to November the event scheduled for April 19 and 20 in Dubai to show his cruise collection. Separately, Versace said it would postpone its coed cruise show, slated for May 16 and Gucci said it was canceling plans to host its cruise 2021 show in San Francisco on May 18. Ralph Lauren, too, has canceled show. —WWD Staff
¬ PARIS — Two classic French pharmacy beauty brands have a new owner: Théophile LeClerc and Innoxa, formerly owned by the Laboratoires Visiomed, have been acquired by Frédéric Poux. Financial terms of the deal were not disclosed.
Each beauty brand is more than 100 years old and has an established presence in a retail channel that straddles both beauty and medicine, an alluring combination to investors today as the wellness
and natural trends mount.T. LeClerc was created in
1881 by Théophile LeClerc, a Parisian pharmacist who developed a luminizing rice powder for the face as his first product. Today, the brand is sold in 18 countries.
Innoxa was founded in 1920 by François Debat, a dermatologist. Bestsellers include the Nacrée cream and the Gouttes Bleues eye drops, launched in 1950. The brand also has color cosmetics. —Jennifer Weil
Frédéric Poux Buys T. LeClerc, Innoxa
Beauty Firms Make 'Top Companies for Executive Women' List
Target Gets Boost From Beauty
Fashion Shows Canceled Due to COVID-19
T. LeClerc powder.
L’Oréal USA made the top 10 list for executive women.
Ralph Lauren Target in the last three years spent $4 billion on remodeling stores. L’O
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5
MARCH 6, 2020
DEEP DIVE: COVID-19
WITH WUHAN, a city of 11 million
and the epicenter of the coronavirus
outbreak, in lockdown for more than
a month, and factories around the
country either shut or operating with
a skeleton staff, buying a lipstick or
face cream would seem to be the last
thing on anyone's mind.
But in China, beauty spending is
on the rise after a sharp drop in sales
over the last two months.
A good portion of Chinese beauty
brands have shown resilience amid
the outbreak, finding ways to sell and
promote their products, focusing on
online sales and making donations
to fatigued hospital workers. As most
factories go back to work, the global
supply chain has also been slowly
recovering.
BUSINESS GOES ONLINEAt the beginning of the outbreak,
which coincided with the Chinese
New Year holiday in mid-January, the
nation was ready to spend a big chunk
of money on beauty and skin-care
products, as they are popular gifts for
workers who travel from the coastal
industrial and commercial hubs
such as Shanghai, Guangzhou and
Shenzhen to visit their families in the
countryside and less-developed areas.
But after more information was
disclosed about the severity of
the pandemic, and Wuhan and
its neighboring cities were put on
lockdown, the appetite for spending
disappeared, people stayed home and
the national holiday was extended.
Shops were closed and public events
were postponed or canceled.
Forest Cabin, or Lin Qin Xuan in
Chinese, a Shanghai-based skin-care
brand best known for its camellia
oil, said 90 percent of its sales
evaporated during the Chinese New
Year holiday period. "We will have
to file for bankruptcy if the situation
persists," founder Laichun Sun told
the local press.
Some 157 of its 337 points of
sales across China were shut due
to government regulations and
safety concerns. Sun turned to the
increasingly popular live-stream,
hoping to boost sales, but only two
people watched his live-stream debut
on Alibaba's Tmall.
Sun then penned an open letter to
his customers, calling for support,
explaining the situation and vowing
donations to nurses fighting at the
frontline in Wuhan. He believes
camellia oil can repair the damage to
nurse's skin after they wear masks for
a long period of time.
His letter soon caught the attention
of the public, thousands watched his
live-stream afterward and sales soared.
On Valentine's Day, more than 60,000
people watched his live-steam and
nearly 400,000 renminbi, or almost
$7,000 at current exchange, worth of
camellia oil was sold. He also received
360,000 likes during the streaming.
"I promised to donate 100 renminbi
with every order received and the
sales were doubled," he told WWD
China. "We were planning to adjust
our annual KPIs and budgets, but
after the live-stream, we decided to
keep our goals for 2020."
For China's beauty unicorn Perfect
Diary, a digital-first strategy shielded
the cosmetics brand from a cascade
of losses. The brand went into
physical retail last year and runs 49
stores. It outperformed MAC and
Estée Lauder and topped cosmetic
sales ranking during Tmall's 2019
Singles Day shopping festival.
Lei Sun, chief marketing officer
of its parent company Yat Sen, told
WWD that most of Perfect Diary's
stores have been closed since late
January, and that it halted its off-line
expansion plan. Its online business
continues to operate as usual.
Shanghai Jahwa, one of
China's oldest and biggest beauty
conglomerates, said on top of a shift
from physical retail to online shopping,
the demand for antibacterial products
has soared, and its factories should
return to full force by late March. ►
Chinese Beauty Industry Shows Resilience Beauty spending is bouncing back, and as most factories go back to work this month, the disrupted global supply chain is set to recover. BY TIANWEI ZHANG ILLUSTRATION BY MATHEW BILLINGTON
Coronavirus has spread quickly around the world.
6
MARCH 6, 2020
REALITY CHECKNot everyone has seized the online
opportunity. Bao Ye, an industry
observer and partner at Jumeili, a
Chinese beauty trade organization,
said the impact of the disease on
physical retail has been severe.
"Beauty brands didn't have any
business during the Chinese New
Year holiday period, and most of
them have very low penetration
online. From what I have seen, not
a brand has recovered from the loss.
Most of the positive news is just for
publicity," he said.
Yanzhuo Li, a retail distributor
of heritage beauty brand Pechoin,
said the loss from two weeks of
store closures is around 500,000 to
800,000 renminbi.
Yixiong Lv, founder of Chicmax
Group, the owner of popular
beauty brands Kans, One Leaf and
Hanamino, said he has complained
about Shanghai's proposed policy
on paying staff their full salary even
though no one is working.
"Paying full salary and social
security for my 7,000 employees while
no one is working will be a huge
burden to me. I will be out of business
within months if the policy is passed.
The most important thing now is for
the company to survive," he said.
According to data from Tmall, a key
indicator for beauty brands' online
performance in China, January sales
of cosmetics and skin-care products
were down 50 percent on average
compared with the previous 30 days.
February sales did see a lift, especially
in the category of facial care, masks,
lip care, feet care, T-zone care and
travel set subcategories.
Bao admitted that the outbreak
has accelerated the popularity of
live-streaming on various social
media and e-commerce platforms,
including Taobao, JD.com,
Secoo, TikTok, Kuaishou, Weibo,
Xiaohongshu and WeChat.
Chloé Reuter, founding partner
of Shanghai-based creative agency
Reuter Communications, which
has just revealed plans to expand
into Europe and set up an office
in London, said many brands have
redoubled their efforts to engage on
social media.
"Chinese consumers are used to
buying via live-stream, a tool that
has been vital for brands wanting
to speak to their Chinese customers
during this difficult time of restricted
travel and closed shopping malls.
Live-stream is not only about sales,
but should be seen as a form of media
that can entertain those stuck at
home," she said.
Momo Lu, a director at creative
agency YT Media, said beauty live-
stream has really changed the way
she shops, following the outbreak.
"I have bought twice from live-stream
and you really get good value from it,"
said Lu of the channel, where products
are 25 percent cheaper on average. "I
love Austin Li's streaming. He is funny
and has his ways to make a product
look desirable. When you see so many
people commenting on the product, you
just want to have it, too," she said.
Li is China's top beauty influencer.
He posts or live-streams his honest
reviews of lipstick or skin-care
products on Chinese social media
platforms and millions buy into his
recommendations. Alibaba’s founder
Jack Ma even did a lipstick review
contest with him.
But the delivery experience hasn't
been as smooth as in the past, due
to the impact of the virus. Shuang
Wang, senior designer at a Shanghai-
based fashion brand, said deliveries
have been taking much longer, and
that she had to hunt for her package
among the hundreds of parcels on the
street as couriers who usually deliver
to her door are barred from entering
the development.
Jo Lin, founder of the e-commerce
incubator Bairun, said despite a boom
in online sales, logistics barriers
resulting from travel restrictions are
hindering brands' opportunities for
growth. In February, Alibaba Group
warned of a drop in revenue at its key
e-commerce businesses.
"Beauty sales on Tmall were
dropping. Even if you were receiving
lots of orders, you could not deliver
the products on time. That's why
most of Tmall's big promotional
events got canceled while you see a
30 percent jump on JD.com. Its in-
house logistic network covers first-
tier cities to third-tier cities," Lin said.
CHINA'S GLOBAL IMPACTThe fact that the virus appears to
have peaked in China, and that most
factories will be up and running by
the end of March, means that beauty
businesses will be able to switch back
to growth mode.
J.P. Morgan estimates that China is
the second biggest market for luxury
beauty in the world, accounting for 25
percent of all sales, with retail, travel
and purchases abroad factored in, and
is set to overtake the U.S. by 2023.
Sallie Berkerey, managing director
of Cosmetic Executive Women U.K.,
said: "Everyone's quite relieved to
have a sense that in China, it's been
acted upon quite quickly, and the
virus has been contained."
"The traveling Chinese customer
is very important globally for all of
the beauty companies. With China
hopefully returning to some kind
of normality soon, people will be
traveling again," she added.
China also plays a big role in beauty
product packaging and ingredients
sourcing.
A source at a leading packaging
firm said the situation was "a mess,"
but things are returning to normal
as the Chinese government has been
pushing all factories to go back to
work since the beginning of March.
"We got delayed on a lot of orders,
and the delays are two to four
weeks. For some reason it was much
more affected in the south around
Guangdong province. They are much
more strict in terms of the documents
that the factories have to provide to
reopen. So some of the factories are
still only running at 20 to 30 percent
capacity," the source said.
"We have a lot of customers we
need to arrange air freight for since
they cannot wait for one more month
on the sea. It’s twice the price usually
depending on where you send the
goods," the source added.
"Now it’s been one month, overall
I would say 70 to 80 percent of the
factories have resumed so we are
pretty much back to normal lead
times," the source said.
Berkerey added that "there is an
optimism among our members that
we can bounce back within eight to 12
weeks, as soon as containment point
is reached. Factories could get back to
full capacity by mid-April, and things
would come back fairly quickly."
SHOWING LEADERSHIPEven before the tentative recovery in
the beauty industry, some companies
were stepping up with charitable
contributions: Jala Group, parent
company of Chinese beauty brands
Chando, Maysu, Botanical Wisdom
and Biorrier, donated 5 million
renminbi to the Wuhan Red Cross
and 2.36 million renminbi worth of
skin-care products to 88 hospitals in
24 provinces and sent 15,000 hand
creams to hospitals in Wuhan.
Proya Cosmetics set up a 15 million
renminbi foundation to purchase
medical supplies for doctors and
nurses fighting at the front line.
Shanghai Jahwa, Marubi and Perfect
Diary donated 3 million, 5 million
and 2 million renminbi to help battle
the outbreak. ■
A woman wears a mask as she works in a shopping mall cosmetic department in Guangzhou.
1. Survival Strategies: Local Chinese brands are concerned about the sur vivial of their business due to the fal l -off in sales and potential laws regarding salar y payments. . 2. Chinese New Year a Bust:One of the most impor tant sel l ing periods for beaut y, hol iday sales were severely impacted — even onl ine. 3. The Comeback:Analysts hope that factories wi l l be back to ful l capacit y within eight to 12 weeks.
Key Takeaways
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DEEP DIVE: COVID-19
7
MARCH 6, 2020
WHILE THE TOLL ON South
Korea's economy of the COVID-19
outbreak is still unfolding, the beauty
sector is likely to feel the pain most
acutely through the loss of duty-free
business.
"South Korea is the largest duty-
free market and we originally
forecast that it would lose $5.5 billion
[because of the virus outbreak]," said
Suresh Sunkara, retail analyst at
GlobalData, "so sales of $16.9 billion
rather than $22.4 billion in 2020, and
a fall of 11 percent on 2019.
"But as the virus has taken a much
stronger hold on South Korea since we
did this forecast in mid-February. it is
likely to be even worse. Our assumption
was that the spread of the virus would
start to diminish by mid-year but this is
in doubt now," Sunkara said.
Coronavirus cases in South Korea
climbed to more than 6,000 on
Thursday as the country struggled
to contain the biggest outbreak of
COVID-19 outside of China, with most
new virus infections centered around
the southeastern city of Daegu.
Like China and Italy, dozens of
large events have been canceled,
and the majority of companies are
taking on flexible work arrangements.
Meanwhile, schools across the country
are to remain closed until at least
March 23, three weeks later than usual.
South Korea ranked as the second
most-popular international travel
destination for Chinese tourists
after Japan, according to UnionPay
International, and Chinese nationals
provide the largest source of foreign
tourists to South Korea.
Jeju Island, located in the south
of the country, typically figures as a
favorite stop for parallel traders due to
it being only a 90-minute flight from
Shanghai, but the region cut off its
visa-free entry program for Chinese
nationals in early February and along
with it an import channel for the flow
of gray market goods into China.
That led Lotte Duty Free and The
Shilla Duty Free to close its Jeju
stores soon after. Since then, with
the outbreak still expanding rapidly,
nearly 100 countries — including
China — ban or limit travel from
South Korea.
The hit to duty-free would be a
big reversal from record gains in
2019. Duty-free sales in South Korea
leapt by 23.7 percent year-on-year to
$21.32 billion in 2019, with sales to
foreigners — of which the majority
are Chinese — surging by 30.9
percent year-on-year to $17.84 billion,
according to the Korea Tourism
Organization.
"The crisis will force major duty-
free operators in the region such as
Shilla, Lotte, Shinsegae and China
Duty-Free Group to reevaluate
strategies and identify other
consumer groups and markets to
help offset a weakening in revenue,"
Sunkara continued. "Luxury brands
and cosmetics operators in major
duty-free markets will be the biggest
losers given their reliance on high-
spending Chinese consumers,
highlighting how overexposed the
duty-free channel is to one key
purchaser group."
There is a silver lining. Given that
much of the duty-free market in
South Korea relies on Chinese parallel
traders, once travel restrictions
are lifted, sales in the channel are
expected to rebound much faster than
they would for ordinary retail.
Meanwhile, several Hyundai, Lotte
and Shinsegae department stores
have experienced at least partial
closures to undergo disinfectant
measures after being linked to
confirmed COVID-19 patients.
But many companies were trying
to keep the business disruptions to
a minimum. Hanwha's new luxury
department store Galleria Gwanggyo,
just south of Seoul, pressed ahead
with its opening this week. The
flashy OMA-designed structure is
the biggest department store for
the company — 785,000 square feet
spread over 12 floors. Management
said it would implement heightened
hourly disinfecting measures to
safeguard against the coronavirus.
"Korea’s economy is being hit from
two fronts, one demand, and the other
supply," said Iris Pang, greater China
economist for ING. "On demand, the
biggest impact is on the Daegu region,
around the epicenter of most of the
infections so far, where a combination
of lockdown, and quarantine limits
economic activity of any sort."
"In the broader economy, there will
be some impacts as people forego
various types of consumer service
activity – general retail, food and
beverages, hospitality, transport
and tourism."
Pang also added: "On one
hand, Korea is one of the biggest
destinations for Chinese tourists
of any country in the world, but
its tourism industry is relatively
small as a proportion of the whole
economy, and also, China was also a
big destination for Korean tourists,
who will no longer be traveling there
either. So there is some netting out
on the tourism side." ■
South Korea Duty-Free Market Seen Losing Over $5.5B Travel restrictions due to the coronavirus have disrupted a major parallel trading destination for Chinese daigous. BY TIFFANY AP
South Korean soldiers spray disinfectant in front of beauty stores Skinfood and Aritaum.
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"The crisis will force major duty-free operators in the region such as Shilla, Lotte, Shinsegae and
China Duty-Free Group to reevaluate
strategies.” -suresh sunkara, globaldata
DEEP DIVE: COVID-19
TOKYO — The coronavirus has hit
Japanese beauty companies with a
doubly whammy. Not only has the
steady stream of Chinese travelers,
whose tour buses used to line the
Ginza, dried up, but corporations are
also grappling with cases closer to
home that have impacted the day-to-
day running of their businesses.
Many companies in Japan
began asking their employees to
telecommute after it was reported
last week that a worker at the
headquarters of Dentsu, the country’s
largest ad agency, had contracted the
virus. Shiseido’s global headquarters
is located adjacent to Dentsu’s, and
Japan’s largest cosmetics company
announced on Feb. 26 that some
8,000 employees in the country would
telecommute until at least March 6.
That figure excludes factory workers
and sales staff at store counters, who
have been given the option to work
on flexible schedules in order to take
care of their children while schools
nationwide are closed for roughly
a month. Staff who have no other
option have been allowed to take up
to an additional 10 days of paid leave
between March 9 and April 10.
Kao Corp. is taking similar
measures, asking some 15,000 local
staff, other than factory workers
and beauty consultants, to work
from home starting Feb. 28 and
continuing until March 15. In areas
such as production and sales, where
teleworking is not possible, working
hours have been reduced to ensure
that parents can take care of school
children during the nationwide school
closures. The company has also
prohibited all domestic and overseas
business trips, and is requiring
employees to wear face masks and
frequently wash their hands. Beauty
consultants at points of sale have
been asked to refrain from directly
touching customers’ skin.
In addition to cosmetics brands
such as Kanebo, RMK and Sensai,
Kao also produces personal-
care products. It provided 300
bottles of Biore U hand sanitizer
for the Japanese nationals who
were evacuated from Wuhan
by a government charter flight
on Jan. 28. Kao also provided
laundry detergents and household
cleaners for quarantine facilities
used to accommodate Japanese
evacuees returning from Wuhan on
government flights arriving in Japan
after Jan. 31.
“Our company has a wide portfolio
of products ranging from sanitary
goods and household items to
cosmetics,” said Michitaka Sawada,
president and chief executive officer
of Kao. “While production and
logistics departments work together
at full speed to produce and deliver
hygiene-related products, our call
center handles many hygiene-related
inquiries from customers. But we
can only make full use of Kao's
comprehensive strength by first
ensuring the health and safety of
our employees. Therefore, we have
decided that 15,000 of our employees
should principally work from home.
This trial will eventually provide
fruitful insights and lessons that will
be put to use in our ongoing efforts to
reform work styles.”
Japanese cosmetics companies
are stepping up with monetary
donations to support those affected
by the outbreak as well. Shiseido
donated 10 million Chinese yuan
(about $1.4 million) to the Shanghai
Charity Foundation. Kao donated 1
million yuan and Kanebo donated
500,000 yuan, both to the Red Cross
Society of China.
The number of Chinese visitors to
Japan, who normally account for a
large percentage of beauty sales in
the country, has drastically decreased
since January, due to canceled flights
and travel restrictions. This has led to
a drop in retail sales across Japan, at
department stores to specialty shops.
In the announcement of its financial
results Feb. 2, Kao projected a
decrease in revenue by up to 20 billion
yen. But depending on the duration
of the outbreak, the actual revenue
decrease might be less or even more,
according to a spokeswoman.
Isetan Mitsukoshi said same-store
sales at its five department stores
in the Tokyo metropolitan area had
fallen 15.3 percent on the year in
February. The retailer’s sales had
dropped sharply in October when a
consumption tax hike dealt a blow to
Japan’s economy, but they had been
gradually recovering through January.
Takashimaya said February sales
among its 17 department stores in
Japan declined by 11.7 percent year-
on-year. Only three individual stores
saw their sales increase last month.
All of those stores are away from
major tourist areas, and none of them
saw growth of more than 0.6 percent.
The biggest drop by a single store
came from Takashimaya Osaka, where
sales plummeted by 25.6 percent.
In addition to the impact of
COVID-19, the retailer attributed the
decreases to tough conditions for
seasonal merchandise because of a
mild winter and the sales tax increase.
H2O Retailing Corp., which operates
the Hankyu and Hanshin chains of
department stores, said comparative
sales among those stores fell 14.3
percent on the year last month.
Japan announced Thursday that all
visitors from China and South Korea
would be placed into a mandatory
two-week quarantine before being
allowed entry. The rule goes into
effect beginning March 9, and will
almost certainly to lead to a further
drop in visitors from abroad, which
in turn will likely mean an additional
contracting of sales. ■
8
MARCH 6, 2020
Japan Continues To Grapple With The Fallout From Coronavirus The beauty industry has been hard hit, in terms both of sales and the impact on day-to-day business operations. BY KELLY WETHERILLE
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The Retail Impact Japan's top department stores are all reporting double-digit sales declines for February.
Tokyo Disneyland, like so much in Japan, has been temporarily closed as a measure against the further
spreading of the coronavirus.
- 11.7%Takashimaya
- 14.3%H20 Retailing Corp.
- 15.3%Isetan Mitsukoshi
DEEP DIVE: COVID-19
9
MARCH 6, 2020
PARIS — Travel retail has lost altitude
since the coronavirus hit, but the
once high-flying channel that’s heavily
reliant on Chinese travelers is eyeing
new horizons to mitigate the fallout.
The losses so far are difficult to
quantify sales-wise, say experts,
who are vigilantly watching changes
in travel patterns and agree this
crisis differs from others that have
impacted the highly resilient channel
in the recent past, including SARS,
MERS, the volcano eruption in
Iceland and terrorist attacks.
“Where we are today really changes
from where we were yesterday,” said
Pablo Saez Gil, director of business
intelligence at M1nd-set, a market
research company specialized in travel
retail. “It’s very difficult to assess.”
Such uncharted territory could
stretch on for a while, causing beauty
sellers to adjust their strategies.
Travel retail is a mammoth business.
In 2018, it was worth $79 billion,
including $31 billion made by its largest
category, cosmetics and fragrance
products, according to Generation
Research’s latest yearly statistics.
In January, overall travel-retail
sales increased approximately 18
percent on-year, Generation said. But
industry sources estimate revenues
in the channel were significantly
impacted in February — down
anywhere from 20 to 80 percent.
Prior to the health crisis that began
last December in China, passenger
traffic was said to be growing by
about 6 percent annually, fueled by
the rise of the Chinese middle class.
They were the most avid shoppers.
Of Chinese traveling, 54 percent
visited airport duty-free shops and 50
percent purchased in that channel,
signifying a 93 percent conversion
rate, according to M1nd-set, which
polled travelers between March 2016
and December 2019.
The Chinese buyers M1nd-set spoke
with spent on average $331 in duty-
free, with 17 percent going toward
skin care, the largest share of wallet
of any product category; 14 percent on
makeup, and 14 percent on fragrances.
But today, the travel-retail business
is highly affected in each area where
the Chinese customer used to go, as
they face travel restrictions and their
trips abroad came to a screeching halt.
Whereas bookings made by Chinese
to travel abroad between Oct. 28,
2019, and Jan. 19, 2020, were down
2.9 percent versus the same prior-year
period, bookings between Jan. 20
and March 1 dropped by 157 percent,
according to Jérôme Goldberg, global
retail and travel-retail division director
at ForwardKeys, who explained
the latter percentage includes
cancellations of existing bookings.
“It’s a larger scale compared to
SARS,” he said. “At that time [in
2002 and 2003] Chinese travelers
weren’t as [numerous] as they are
today. Changi Airport said Chinese
accounted for 11 percent of the traffic
and basically one-third of the sales,
and that one-third totally disappeared
in a couple of days.”
As the virus spreads around the
world, passenger traffic is decreasing
everywhere, including in Europe,
with airlines like Lufthansa, Virgin
Atlantic and Cathay Pacific paring
their number of flights and employers
halting work trips. L’Oréal, for
instance, has suspended business-
related travel as a precautionary
measure until March 31.
“The key will be to understand if
we are in a V-like pattern, with things
going down and bouncing back
quickly, or more in U situation, where
we will have this flat plateau more or
less for a long time before the market
goes up again,” said Goldberg.
“Now it’s not just China, but the
world’s second-largest and second-
highest spending outbound travel
market, the U.S.A., which is stalling,”
said Olivier Ponti, vice president insights
at ForwardKeys. “For destinations,
businesses in the travel industry and in
luxury goods retail, which rely heavily
on American and Chinese tourists, it is
crucial to look carefully at travel data on
an almost daily basis.
“With the high volatility in
the market, the success of these
businesses will depend on their
ability to take action the moment
things start to recover,” said Ponti.
There are various ways airport
operators and beauty brands can try
to recoup lost sales in the meantime,
experts say. One is training sales staff
to focus on what were traditionally
less-spending travelers than the
Chinese, such as South Americans,
Africans or Scandinavians.
Operators and brands might also
put more emphasis on the digital
part of their omnichannel strategies
to lasso consumer interest and spend
while they remain on their home turf,
and focus increasingly on regions
where travel retail can play a larger
role, such as the Americas or Africa.
“Our industry is very resilient,” said
Stéphanie Metz-Thevenod, executive
vice president marketing and digital
at Lagardère Travel Retail, which has
more than 250 duty-free stores. “The
way our strategies are built is to have
a kind of toolbox ready to activate
when [a crisis] happens.”
Lagardère has a multifaceted
commercial plan to help ease COVID-
19’s impact.
“First is to develop, keep
and nourish the commercial
attractiveness of our stores,” said
Metz-Thevenod. “The KPI we use
is the stock ratio, which is the
conversion between passengers and
buyers in our store. We use every
opportunity when a passenger is in
our store to convert him.
“We look at what the barriers are to
purchase and we address them,” she
said, explaining the first one is the price-
competitiveness of the beauty offer.
For beauty, Lagardère has launched
a “keeping the lead on the leaders”
drive, which focuses on making its
stores “the place to buy the leaders
in beauty — the top seller, the best
products,” said Metz-Thevenod.
In terms of promotions, on a global
scale Lagardère provides its stores
with structured campaigns, including
specifically chosen products, which
can be swiftly launched.
The operator just ended its first
sales campaign for duty-free, which
has allowed for the group’s stores to
maintain growth even in countries
where the COVID-19 outbreak started.
Precision retailing — such as
promoting more or highlighting
bestsellers specifically for different
nationalities — is also important .
Its international team is in touch
with the local teams so they can
nourish the campaigns developed
globally. “We have empowered teams
locally,” said Metz-Thevenod, adding
the operator is also running some new
programs spotlighting travel exclusives.
Another successful program has been
“Flash Sale,” which lasts for two hours.
“It’s like a happy hour of
activation,” said Metz-Thevenod.
“This has the strongest growth in
conversion that we have ever seen —
more than a one-point conversion,
which is a lot in our world.”
In the toolbox Lagardère gives its
local operations products and signage.
“It’s really the trinity that
allowed us to create that,” said
Metz-Thevenod, referring to the
triumvirate of the operator, airport
and beauty brands. “Those three
working together — this is the key
success factor to mitigate the impact
of the coronavirus.” ■
Travel Retail Navigates Uncharted Territory The impact of the coronavirus changes daily. BY JENNIFER WEIL
South Korean soldiers spray disinfectant in front of beauty stores Skinfood and Aritaum.
DEEP DIVE: COVID-19
Chinese travelers drive duty- free sales.
$331Average spend of a Chinese buyer before COVID-19.
17%is on skin care.
14%is on makeup.
COVID-19 has virtually shut down air travel in key destinations around the world.
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MARCH 6, 2020
CORONAVIRUS PANIC seems to
be good for at least one thing: sales of
wellness products.
On Manhattan’s Upper West Side
this week, CVS, Duane Reade and
Bed, Bath and Beyond stores looked
ransacked. A visit to a Harmon Face
Values store on upper Broadway the
night of March 4 revealed bare shelves
where Tylenol, Emergin-C and Zicam
had once laid. The store had run out
of Lysol sprays and Clorox wipes over
the weekend, an employee said.
As anxious U.S. consumers race
to buy emergency supplies ahead of
an impending COVD-19 outbreak,
retailers are selling out of items like
hand sanitizers and immune-boosting
supplements faster than they can
restock. A nationwide shortage of
Purell has turned the workaday hand
sanitizer into a luxury good, with
third-party sellers on Amazon and
Ebay marking up its typically humble
prices by significant amounts. A recent
search yielded a two-pack of the
brand’s 12-oz. pump bottles for $99.99.
Some brands are seeing
unprecedented year-over-year and
week-over-week sales gains. EO
Products, which makes natural hand
sanitizers under the brands EO and
Everyone, saw web site sales for its
Everyone sanitizers increase 1,300
percent in the last week. Demand
from retailers has quadrupled since
this time last year, said Tom Feegel,
president of EO Products.
“Whether there is a flu or any type
of illness outbreak, it drives a ‘flight
to wellness,’” said Susan Roddy,
managing director of the consumer,
food and retail group at Houlihan
Lokey. “Demand for preventative and
self-care products escalates.”
Last week, as news of COVID-19
cases in the U.S. began to break,
shoppers began to stock up on
prevention and emergency supplies.
On its fourth-quarter earnings call
Tuesday, Target Corp. chief executive
officer Brian Cornell noted “aggressive
shopping” as consumers stock up on
food and household essentials.
In a statement to Beauty Inc, a
spokesperson for CVS noted that
the drug chain is “experiencing
higher consumer demand of select
products” that “may cause temporary
shortages…at some stores” and is
working with suppliers to restock “as
quickly as possible.”
On The Vitamin Shoppe’s web
site, searches for hand sanitizer
are up 16,000 percent. The chain is
completely sold out of hand sanitizer
online, but said limited quantities are
still available at “some stores.”
With the extensive media attention,
some say the virus seems to be
driving an outsize consumer response
compared to past global pandemics.
“[COVID-19] is unique because the
news is traveling much faster and a
lot more outlets [are covering] it,”
said Feegal.
The media attention has certainly
gotten to consumers.“I spent $5.99 on
tiny Purell bottles at my local pharmacy
— and Lysol and Clorox wipes,” said
Jillian Ruffo, a 29-year-old Manhattan-
based copywriter. “They had just gotten
a new shipment in and people were
taking stuff straight out of the boxes.”
At Target in Jersey City, 30-year-old
lawyer Rebecca Salk was stocking
up on food, medicine and household
supplies, but were met with mostly
bare shelves. Salk managed to find
Emergin-C, peanut butter and pasta
sauce, but ended up “buying a bunch
of stuff online.” She estimated that
she spent $150 more at Amazon than
she typically does.
Madeleine Fawcett, a 36-year-old
Brooklyn-based publicist, reported
that her mother and husband had
“ransacked all the Brooklyn grocery
stores and Home Depot” for Purell,
Lysol and bleach. Fawcett, who has
two young children, referred to the
stockpiling as “doomsday prepping,”
and the empty store shelves as “truly
apocalyptic.”
At EO, sales have been steadily
increasing for the past month. “It’s hard
to describe the rate of growth because
the numbers are so big [and] so fast,”
said Feegel. By the end of January, sales
of hand sanitizers were up 240 percent
year-over-year, but by the week ending
March 3, that number had quadrupled.
The brand is in near constant
communication with retailers, talking
“every 24 to 48 hours” with buyers it
might normally only communicate
with once a month.
It is not just hand sanitizers that
are experiencing a surge in demand.
Spate, which analyzes online search
data, has seen a year-over-year spike in
searches for natural immune-boosting
supplements. Searches for elderberry
are up 52.4 percent, vitamin C is up 25
percent, Echinacea is up 13.1 percent
and zinc grew 7.7 percent.
At The Vitamin Shoppe, those
products are selling at a faster clip
than usual, said ceo Sharon Leite,
who noted that oregano oil, olive leaf,
probiotics and the homeopathic product
Oscilloccinum have also been top sellers.
“We’ve seen a real uptick in
customers reaching out to us to
help them with immune support,
[beginning] last weekend,” said Leite.
“When the case in Washington was
relayed in the media — that’s when
we started seeing strong interest.”
The retailer has also rushed to
create new content for its website, “to
make sure customers are getting the
right facts.” While the company has
sold out of hand-sanitizers online, it
has published an article on how to
make one’s own. “We want to be seen
as a place where people can come for
facts,” said Leite. “There’s so much
bad information out there, and hand-
washing is really important.”
The uncertainty surrounding
COVID-19 could continue to fuel
apocalypse-style shopping sprees,
especially as the virus spreads.
At EO, Feegel is preparing for the
hand-sanitizer demand to continue,
increasing production capacity by
150 percent. “Check back with me
in a week — it could be greater than
that,” he said. “We’re not sure what’s
happening, and that’s what’s different
about this — [sales] could double
again this quarter.” ■
Coronavirus Inspires Doomsday-Style Wellness Shopping "It's truly apocalyptic": Consumers are racing to stockpile hand sanitizers and supplements, leaving store shelves empty. BY ELLEN THOMAS
Empty shelves of hand sanitizers are becoming the norm in stores.
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DEEP DIVE: COVID-19
Seeking Solutions Online searches for immunity boosters are soaring.
+52.4%Elderberry + 25%Vitamin C + 13.1%Echinacea*Source: Spate.nyc
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12
MARCH 6, 2020
LAUNCH PAD
Clinical Skin Care In the skin-care world, Instagram-worthy packaging can certainly generate sales. But at the higher end of the market, expertise still counts for something, if the influx of dermatologist and clinical-inspired skin-care brands is any indication. BY ELLEN THOMAS
Dr. Gross's peel pads turn 20 this year, and the exfoliating treatments seem to be just as relevant as ever. Sold at a range of retailers from Sephora to Violet Grey to QVC, the acid peels " fly off our shelves because they're a no-brainer, so travel-friendly, and they work," according to Maureen Choi. The cult-favorite product, available in three strengths, will be available in limited-edition reusable tins containing 30 peel pads (five more than usual).
Dr. Dennis Gross ALPHA BETA DAILY PEELS, 20TH ANNIVERSARY EDITION, $88
Dr. Macrene Alexiades — or simply Macrene to those in-the-know — is another sought-after Upper East Side dermatologist with a recently revamped namesake line. Alexiades, who is also a clinical professor at Yale, combines her scientific knowledge with over 50 natural ingredients for a highly-active skin-care line that is hand-batched at her farm in upstate New York. The luxury line is sold at retailers such as Net-a-Porter and Violet Grey, where the High-Performance Lip Filler is a hero stockkeping unit. "She's blazing a new frontier in natural formulations that are equal parts efficacious and environmentally minded," said Choi.
Macrene Actives $95 TO $365
Dr. Sobel Skin RX
$42 TO $105
Dr. Howard Sobel, who founded Doctor’s Dermatologic Formula in the Nineties, is back with a modernized take on the skin-care solutions he’s honed in his decades as a cosmetic derm to Upper East Siders. Eight sku's are packed with active ingredients such as glycolic acid, peptides and retinol, and is said to penetrate the skin deeper than the average product via Dr. Sobel’s proprietary delivery system, which he’s hoping to patent. The products are exclusive to Dr. Sobel's web site and Sephora.
A 15 percent proprietary brightening complex consisting of niacinamide, tranexamic acid, kojic acid, alpha arbutin and pentapetide powers the latest addition to the brand’s pro strength line. Launched in September exclusively with Sephora, the Pro Strength products are designed to be more potent and targeted than offerings from the brand’s core line. Thus far, they seem to be resonating — launched in early February on Sephora.com, the new niacinamide treatment became the brand’s best-selling sku on the site within three weeks, and the Pro Retinoid Peptide Serum, $110; is said to be a bestseller as well.
Peter Thomas Roth PRO STRENGTH NIACINAMIDE DISCOLORATION TREATMENT, $88
Sturm is known for preaching an anti-inflammatory lifestyle with skin care, fueled by hyaluronic acid and the powerful antioxidant, purslane, to match. Her once-niche luxury products — $300-plus for a serum anyone? — are now sold at Sephora and are hits with other retailers. “You'll find her hero Hyaluronic Serum — our number-one-selling serum — in nearly every makeup artist and celebrity skin routine,” said Maureen Choi, executive director of content and curation at Violet Grey. The brand’s new night serum, launched Feb. 27 on molecular-cosmetics.com and bluemercury.com, piggybacks on the brand’s Sleep Food supplement, and is said to boost the skin’s nightly renewal process with exotic-sounding ingredients like cotton thistle extract, senna alata extract and Poria Cocos.
Dr. Barbara Sturm
NIGHT SERUM, $310
This is the second launch to come from the partnership between Beckham and Bader, the scientist, professor and founder of a self-named cult skin-care line. The serum, launched in early February, is infused with Bader’s proprietary TFC8 stem cell-repairing complex and housed in recyclable glass packaging. It is for now retailed exclusively through Violet Grey (augustinusbader.com and victoriabeckhambeauty.com), where it is “quickly becoming a bestseller,” said Maureen Choi, executive director of content and creation at Violet Grey.
Augustinus Bader
x Victoria Beckham CELL REJUVENATING POWER SERUM, $210
The most recent entry into the mineral sunscreen market is from Dr. Loretta Ciraldo, a Florida-based derm whose line — done in partnership with The Art of Shaving founder Myriam Zaoui Malka — is sold at department stores such as Nordstrom and Neiman Marcus. The zinc oxide-based SPF promises antioxidant protection from free radicals, sun and blue light, and can act as a lightweight primer or foundation.
Dr. Loretta Urban ANTIOXIDANT SUNSCREEN, $50
13
MARCH 6, 2020
PEOPLE, PLACES & LIPSTICKS
Michael Gould and Sara Moss
Deborah Krulewitch and Jane Hudis
John Demsey
Peter Diminich
AS SARA MOSS, vice chairman
of the Estee Lauder Cos. Inc., sees
it, people suffering from hunger are
omnipresent.
"They are my neighbors. They
are your neighbors," Moss told
the crowd of 500 at the Ziegfeld
Ballroom in Manhattan Tuesday
night for the "Fill the Bag" benefit
raising $1.4 million for the New York
Common Pantry.
"Never forget that the face of
hunger might be a familiar one."
After receiving the "Distinguished
Partner" Award for her 25 years
supporting the New York Common
Pantry, Moss recalled her impression
when she first entered the facility on
109th Street to began what's been
a decade of active volunteering on
site. "As they say, 'they had me at
hello.' They treated each guest with
dignity and respect and captured
my heart and my head." She also
recounted how New York Common
Pantry rises to the occasion,
mentioning that the organization fed
victims of Hurricane Sandy in 2012,
as well as federal workers who were
put out of work last year during the
government shutdown. So inspired,
Moss now brings her family and
extended family to the New York
Common Pantry each Thanksgiving
to help serve the hungry. "One in
every eight New Yorkers worry
about their next meal or go hungry,"
she said. "The need is urgent and it's
growing."
Also at the event, Peter Diminich,
managing director of ING, who
received the Estée Lauder Cos.
Distinguished Volunteer Award.
"I'm humbled, slightly embarrassed
and surprised to receive this award,"
Diminich told the crowd. "Sara said
the New York Common Pantry had
her at hello. They had me at plastic
aprons and hair nets," he joked.
Then turning serious, he said that
visiting the New York Common
Pantry uptown is about giving back
and that giving back "reminds us of
how truly blessed we are. It's truly
powerful stuff. It feeds your soul."
Underscoring how The Estée
Lauder Cos. has made the New York
Common Pantry a cause célèbre, a
bevy of executives from the company
attended the event, including chief
executive officer Fabrizio Freda
who presented Moss her award;
Jane Hertzmark Hudis; Deborah
Krulewitch and Deirdre Stanley,
as well as Sandeep Mathrani,
Liz Holland and Anne Keating.
Sara Moss Honored by the New York Common PantryThe Estée Lauder Cos. vice chairman has supported the organization for the past 25 years. BY DAVID MOIN PHOTOGRAPHS BY LEXIE MORELAND
The Beauty Carousel The latest beauty executive hires. BY ALLISON COLLINS
COTY INC.'S APPOINTMENT of yet another chief executive officer was by far the biggest executive news of the week.
The beauty business is said to have surprised employees and Wall Street analysts alike with the appointment of Jimmy Choo ceo pierre denis as Coty Inc. ceo. Pierre Laubies, Coty's current ceo, will stay on through the company's sale of the Professional Division, expected this summer. He joined the business in November 2018.
Coty's chairman Peter Harf, also chairman of Coty's majority owner JAB, unveiled the news last Friday.
Denis is also already familiar with Coty's majority owner, JAB, as the group owned Jimmy Choo until 2017, when it was sold to Capri Holdings Ltd. At Coty, Denis will be in charge of overseeing phase two of the turnaround plan: grow sales.
Phase one included streamlining and reducing leverage, which is expected to be completed through the sale of the professional division. "Phase one is complete, and now they're going to focus on improving sales growth and this person Pierre Denis is the person to do this," Stifel analyst Mark Astrachan said, voicing concern over the company's turnaround efforts.
Wall Street is also concerned because of the swiftness of executive turnover at Coty. Wells Fargo analyst Joe Lachky called the shift "an incremental negative" because "a ceo transition in the midst of so much organization change brings additional uncertainty to the story."
Also at Coty, chief financial officer pierre-andré terisse added chief operating officer to his title. isabelle parize and justine tan have been non-executive directors of the Coty board. andrew stanelick has been promoted to Coty President North America, overseeing both consumer and luxury beauty.
Elsewhere in the beauty world, Kao and R+Co have made new appointments. At Kao USA, karen frank has been named president of the mass business for the Americas and European region, and jesse grissom has been named president of operations in the Americas region.Frank and Grissom's appointments are part of a new organizational structure at Kao, which is meant to allow for faster decision-making.
At R+Co, alison alhamed has joined as vice president of social media and community. She was previously editor in chief of "Modern Salon."
Michael Gould and Fabrizio Freda
Deirdre Stanley
14
MARCH 6, 2020
EYE CANDY
All Beauty, All the Time
¬Gale force winds couldn’t stop beauty’s bravest from coming out to celebrate the launch of Beauty Inc’s weekly newsletter. Among those on hand to get a sneak peek of the first issue: Jane Hertzmark Hudis and Geri Schachner of the Estée Lauder Cos. Inc., Saks Inc.’s Kate Oldham, IFF’s Denis Ferenc, Mary Fox from Bic, and a slew of brand founders including Andrew Goetz and Matthew Malin, Alicia Yoon, Marcella Cacci and Carrie Gross.
Coming out every Friday, Beauty Inc’s expanded coverage brings readers more in-depth news and analysis about the sector than ever before. “I love that WWD is bringing more inspiration and content to beauty,” said Fox, who is the general manager of Bic North America. “Their leadership and investment will inspire us to be even better for our consumers and ensure that our industry is dynamic and relevant.”
Mary Fox and Carrie Gross
Julia Sloan
Jill Granoff and Christina De Matos
Denis Ferenc and Linda Levy
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Geri Schachner, Moj Mahdara and Jane Hertzmark Hudis.
Alison Brod, Laura Henson and Rachel Albert Ph
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Sarah Long, Amy Juaristi and Stephanie Taylor.Alicia Yoon and Edward Scott
Marcella Cacci Andrew StanleickMary Brady, Andrew Goetz and Matthew Malin.
Saturday, March 14. The Eberly Rooftop, Austin, TX
S T Y L E
Introducing: WWD Style Dimension:
SXSW Edition!Taking over the SXSW festival scene with curated programming,
activations and Austin-centric networking moments
#WWDStyleDimensionAustin
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C L I C K T O R S V P
FOR MORE INFORMATION, PLEASE CONTACT STEPHANIE SIEGEL, VP, SALES & MARKETING AT [email protected]
A N I SA TE LWA R K A I C K E R Founder & CEO of Anisa International & ANISA Beauty
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