BW Confidential - Issue #3 - September 2010 - (Page 6)

Update News recap International Oriflame closes in Iran Authorities in Iran have closed Swedish direct seller Oriflame’s operations in the country. The authorities have also detained three members of staff and two sales consultants without disclosing the reasons, and the company says it does not have detailed information on the situation. Iran represents around 20% of the company’s sales in Asia. Oriflame confirmed its sales outlook for 2010, but said that operating margin is now expected to be around 12% due to the closure, instead of more that 12% that was initially announced. A definitive closure of operations in Iran may lead to extraordinary costs of €10m in 2010. What’s next for L’Oréal? The saga involving the Bettencourt family, the leading shareholder of L’Oréal continues to make the headlines, and as the affair drags on the more scrutiny there is of the French group. Acrimony between Liliane Bettencourt (whose father founded L’Oréal) and her daughter Françoise Bettencourt-Meyers, has given rise to speculation that the family would sell their 31% share in the group, and also led to queries on the action that the company’s second largest shareholder, the Swiss concern Nestlé would take. Until the end of August, Nestlé, which holds a 30% share in L’Oréal, had said it wanted to maintain the status quo. However, in an interview with the Swiss press, Nestlé’s chairman said for the first time that the board had asked him to consider the long-term development of its participation in L’Oréal. Nestlé says that its share in the cosmetics company is positive for both groups. Yet analysts believe it is unlikely the Swiss company would buy Bettencourt’s shares given the company’s focus on its food business, which is leading to many questions about who will end up controlling the group. Strategy Dabur expands New Delhi-based consumergoods group Dabur India has acquired Turkish personal-care company Hobi Kozmetik Group for $69m. The acquisition is part of Dabur’s strategy to expand in the consumer-goods industry internationally and develop its presence in the Middle East and Africa region. The group has reinforced its position in personal care in the past year through the purchase of facial bleach brand Fem Care Pharma. Hobi Kozmetik markets a range of hair and skincare under the Hobby and New Era brands and sells in 35 countries. It is a market leader in Turkey’s hair gel category, with a 35% share. Acquisitions Pola moves to India Japanese company Pola is to sell its products in India as a result of a new deal with New Delhibased group Elder Health Care. The Indian group will initially sell Pola’s whitening creams and gels in the country before expanding into other categories, such as anti-aging skincare and fragrance. The products will be sold through retailers as well as dermatologist offices. Philosophy for sale? US-based beauty brand Philosophy, which is owned by private-equity company Carlyle is up for sale, according to press reports. It’s thought that Carlyle is currently seeking buyers for the brand it bought in 2007 for $475m and is looking for up to $1bn for the company. If Carlyle does not find buyers for Philosophy it may also consider an IPO for the brand. Philosophy was founded in 1996. Shiseido looks to mass Japanese group Shiseido is to launch a new masstige skincare brand to target middle-income consumers in emerging Asian countries and boost its share of the growing low-end market in Japan. Senka, the four-sku moisturizing skincare line, is described as a strategic launch and follows in the footsteps of the Za brand, a masstige line developed exclusively for the Asian market, and mass make-up range Majolica Majorca sold in Japan. Shiseido states that in Japan low-end skincare priced at ¥1,000 ($12) or less saw a 3.3% increase in fiscal 2009 versus 2006, and sets this growth against the declines in the midrange to high-end skincare market. The group also says that in the overall self-selection skin lotion segment in Japan, products priced less than ¥1,000 account for 45.8% of sales and 67.7% of volume. Senka will launch in 34,000 points-of- sale (in Japan and Taiwan in September and other Asian markets in 2011), including drugstores and general merchandise stores, and will be supported by TV ads and an internet campaign. Origins leaves France Estée Lauder pulled its Origins brand from France at the end of July. The group said it could no longer promote the brand in the country given that distribution had been reduced to just two points-of-sale there. The management said however, it would not rule out going back to France in the future with a strategy adapted to that market. Origins also recently stopped distribution in Greece and the Philippines. 6 More buys for Avon Beauty group Avon is to purchase US jewelry company Silpada Designs for $650m. Silpada Designs is a directseller with 32,000 sales representatives and annual revenues of $230m. The deal follows Avon’s acquisition of UK-based beauty brand Liz Earle in March of this year and children’s line Tiny Tillia in April. September 2010 - N°3 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #3 - September 2010

Cover
Contents
Comment
Update
- Brand & retail news recap
- Digital digest
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
Launches
- The latest in fragrance, skincare & make-up
Interview
- O Boticário president Artur Grynbaum
Insight: luxury
- Category overview
- Pricing
- The internet
- Return to quality
Wellness
- The spa consumer
- Spa case studies
Retail
- New store concepts
Travel retail
- Inflight sales
Market watch: US
- Country overview
- Industry roundtable
- Retailing analysis
- Emerging retail channels
Radar
- Six up-and-coming beauty brands
Packaging trends
- Make-up innovations
Last word
- Inspiration&Creation founder Leïla Rochet-Podvin

BW Confidential - Issue #3 - September 2010