BEAUTY CARE

L’Oréal loosens ties with Nestlé via share buyback

BY Antoinette Alexander

PARIS and LAUSANNE, Switzerland — French beauty brand L’Oréal is buying back 8% of its shares from Nestlé, loosening their long-standing alliance, the companies have announced.

L’Oréal will buy 48.5 million of its own shares. Following the transaction, Nestlé’s stake in L’Oréal will be reduced from 29.4% to 23.29% of the share capital and the Bettencourt Meyers family’s stake in L’Oréal will increase from 30.6% to 33.31%.

The buyback will be refinanced partially through the disposal by L’Oréal to Nestlé of its 50% stake in Swiss dermatology pharmaceuticals company Galderma, dermatology-focused, Swiss-based joint venture between Nestlé and L’Oréal.

The transaction is expected to close by the end of the first semester in 2014.

“This transaction presents a very positive strategic move for L’Oréal, its employees and its shareholders, stated Jean-Paul Agon, chairman and CEO of L’Oréal. “L’Oréal will focus exclusively on its cosmetics business and its ‘beauty for all’ mission, its universalization strategy and its ambition to win 1 billion new customers.”

For Nestle, the acquisition of 50% of Galderma will enable it to pursue development in nutrition, health and wellness by expanding its activities to medical skin treatments. Enter Nestlé Skin Health S.A.

Nestlé chairman Peter Brabeck-Letmathe said “Building on Nestlé’s historic strengths as a science based nutrition, health and wellness company, and through the recent creation of Nestlé Health Science S.A., the company has reinforced its strategic direction to offer nutritional solutions from food and beverage to scientific products for a healthier life. By creating Nestlé Skin Health S.A. and by leveraging Galderma’s current portfolio, formulations and innovative research, Nestlé will now be able to provide science-based solutions for skin conditions. We strive to have a portfolio of innovative products that meet the full spectrum of people’s skin health needs over the course of their lives and to provide a holistic approach to people’s health.”

The new Nestlé Skin Health entity will have a range of products for the skin, hair and nail, including self-medication drugs, such quasi-drugs as medicated soaps or sunscreens, therapeutic skin care products, nutraceuticals, prescription drugs and medical devices, Nestlé stated.

 

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L’Oréal enjoys ‘robust’ 2013

BY Antoinette Alexander

PARIS — For beauty company L’Oréal, 2013 marked a year of “robust growth” with the Consumer Products Division posting an increase of 4.9% on a like-for-like basis.

The consumer products division generated sales of 10.87 billion euros, up 4.9% on a like-for-like basis and up 1.5% based on reported figures.

The company stated that growth at L’Oréal Paris is accelerating, and the brand is strengthening its worldwide leadership thanks to a strong performance in hair care. The brand also is seeing strong growth in facial skin care with Age Perfect Cell Renew, in hair colorants with Préférence Wild Ombrés and in makeup with Butterfly mascara.

Garnier recorded double-digit growth in hair colorants thanks to Olia, the company stated. And the brand’s growth in facial skin care is continuing with BB creams.

Maybelline posted strong growth in lipstick with the launch of Rouge Elixir and in more accessible categories such as nail varnishes and eyeliners.

Meanwhile, Softsheen-Carson is making progress thanks to the launch of Amla Legend, the company stated.

In North America, sales rose 3.8% like-for-like and by 2.8% based on reported figures. The Consumer Products Division consolidated its market leader position thanks to strong growth at L’Oréal Paris with the success of Advanced Hair Care, according to the company. Furthermore, L’Oréal Luxe outperformed its market, thanks in part to solid results of its American brands Urban Decay, Clarisonic and Kiehl’s. In the Professional Products Division, the launches of Diamond Oil by Redken and Essie Gel are proving promising, the company stated.

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Mintel: Consumers interested in fragrances with unique benefits, new forms

BY Antoinette Alexander

CHICAGO — Interested in a fragrance that can be worn at night to help you sleep? If so, you’re not alone. According to new Mintel research, there is a growing demand for more distinct, non-traditional uses on the fragrance front. To that end, 64% of women and more than half of men who use any scented item would be interested in fragrances that can be worn at night to help them sleep or refresh the sheets.

“A search of popular fragrance blogs also reveals that it’s not an uncommon practice for people to spray themselves or their bed linens with fragrance prior to going to bed. There could be a variety of reasons that people spritz themselves with fragrance before bedtime, but helping to decompress before sleeping is definitely a key objective. As consumers may be seeking more natural alternatives to sleeping pills or medication, fragrances that are designed to help aid with sleep could be an opportunity for the category. There are very few fine fragrances positioned as ‘night specific,’ but there definitely appears to be an opportunity for brands to capitalize on an existing consumer behavior,” said Shannon Romanowski, beauty and personal care analyst at Mintel.

In addition to nighttime fragrances, consumers are increasingly expressing an interest in other added value fragrance benefits as well:

  • 60% of consumers would like to try a scent that could help relieve colds and headaches;
  • 52% of men ages 18 years to 34 years are interested in mobile apps to help them choose a fragrance;
  • 48% report interest in fragrances that offer a cooling or heating sensation; and
  • 35% of respondents are interested in fragrances specifically made for hair, but that number jumps to 90% among the target group (those who buy scented powder or lotion, make spur-of-the-moment purchases, splurge on themselves and agree that private labels work as well as branded ones).

“New forms and benefits attract interest from consumers, primarily driven by women and younger consumers, which stands to reason as these groups tend to be more engaged in the category overall. However, since fine fragrances in particular tend to be viewed as occasional use items, added benefits could help to increase usage. Future growth will likely come from users ‘trading up’ to more expensive variants, ancillary items, and innovative new product formats and benefits,” Romanowski added.

 

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