Tom Ford Expands His Beauty Collection

Products from the Tom Ford Beauty collection

(Photo Credit: Thomas Iannaccone/WWD)

Tom Ford sets out to redefine the world of prestige beauty with the launch of his expanded color collection in September.
With five FIFI awards under his belt, total Tom Ford Beauty global retail sales estimated at $150 million, a strong debut of his lip color collection (retail sales of $6 million in just 100 stores!), plus a resurgence in consumers' appetite for luxury products, the time is right for Mr. Ford and Estée Lauder Cos. Inc. to expand.

Here are the deets for the beauty mavens:

• The color cosmetics collection will have 132 products, including six skin care products, ranging in price from $30 to $250
• The collection includes contouring products Shade and Illuminate cream duet, heavily pigmented lip glosses like Lost Cherry and caligraphy tip brow pens
• Skin care products include Traceless Foundation Stick, Illuminating Protective Primer, Purifying Crème Cleanser and Intensive Infusion Concentrate Extreme, which is an oil-based serum.
• The Private Blend Lip Color Collection includes 18 shades (up from 12) and will retail at $48
• Two new Private Blend Collection fragrances: Santal Blush and Jasmine Rouge priced from $195 to $475
• A new Signature Collection fragrance: Violet Blonde.

Keeping in line with Mr. Ford's exclusivity mantra, the new color line will only be in 35 doors worldwide, and sold in Tom Ford stores, Berdorf Goodman, and select Neiman Marcus and Saks Fifth Avenue stores in the U.S.. Overseas, Italy’s La Rinascente and the U.K.’s Harvey Nichols and Selfridges will carry the line. A rollout in Asia is planned within 18 months of its launch.

The lip color and new fragrances will have a slightly wider global distribution -- 100 and 225 doors respectively -- and will be sold in the aforementioned stores, as well as Nordstrom and Bloomingdales. In the U.S., Saks will get a four-week exclusive on Violet Blonde in August before the fragrance is rolled out to other stores.

Industry sources estimate the line to do $40 million in global retail sales the first year, and $400-$500 million globally in five years.

(SOURCE: Estée Lauder Puts Together a Prestige Brand - WWD)

Estée Lauder 3Q Earnings Double Driven By 10% Sales Jump

Strong sales growth overseas and in the U.S., coupled with a stringent cost cutting plan, helped to double Estée Lauder Companies' third quarter profits, according to an article in Crain's New York Business.

Third quarter earnings rose more than 50% to $57.5 million vs. $27.2 million from the previous year. E.P.S. doubled to $.28 compared to $.14 E.P.S. last year. Excluding one-time costs, profit was $.34 per share, beating Wall St. estimates of $.32 per share.

Net revenue jumped 10% to $1.86 billion from $1.70 billion a year earlier, coming under analysts' prediction of $188 million in sales.

Skin care was the best performing product category, with 15.6% growth at $819.8 million, bolstered by strong sales of EL's Advanced Night Repair Synchronized Recovery Complex. Particularly encouraging are the sales numbers for the La Mer skin care line, one of the company's Prestige lines with prices starting at $100, which posted double-digit sales with strength in North America.

President and CEO Fabrizio Freda said in a conference call with analysts, "We believe that consumers are beginning to reconsider luxury products. It certainly bodes well for our entire Prestige portfolio".
The international launch of Pure DKNY and the rollout of Coach Signature fragrances to the U.S. bolstered EL's Fragrance category to an 18.7% sales increase of $222.8 million. Makeup sales rose 2.3%  to $710.8 million on the strength of M*A*C and Bobbi Brown cosmetic brands.

Regionally, the biggest rise was in Asia/Pacific to $371.1 million in sales, an increase of 20.3%. In Europe, the Middle East, and Africa, sales jumped 13.5 to $662 million. Sales in the Americas rose 3.1% to $829.1 million.

In an interview with WWD, Mr. Freda, says the company will continue to invest in marketing spending, and concentrate on brands, opportunites, regions and beauty concerns that are most important to the company,  Mr. Freda also said growth through acquisition isn't off the table:

“We’ve always said [mergers and acquisitions] are part of our strategy,” Freda told WWD, adding the company will pursue opportunities that widen its reach by category, distribution channel and in geographic scope. “Skin care and Asia are our priorities, but we also will look more broadly,” said Freda. (SOURCE: WWD)

For FY2010, EL forecasted sales to grow between 4% and 5% in constant currency. Earnings, excluding one-time items, are projected to be between $2.65 and $2.75 per share.

(Photo: EsteeLauder.com)

Bye, Bye Prescriptives

It's only been six months since Fabrizio Freda took over as CEO of Estée Lauder, and already he has sent shockwaves throughout the cosmetics industry.

Last week, Estée Lauder announced that it will shut down its 30 year-old Prescriptives cosmetic line by Jan. 31, 2010.

"A core component of The Estée Lauder Companies' corporate strategy is to evaluate, and where possible, turn around underperforming brands with the goal of improving return on investment. After a thorough analysis of the Prescriptives brand, management concluded that the brand's long term business model is no longer viable given the current market environment. The Company is committed to placing as many impacted employees as possible in open positions within the Company"

Prescriptives products will continue to be sold online at www.prescriptives.com to U.S. customers only while supplies last.
 
Eliminating brands from their portfolio is nothing new for EL, but Prescriptives is a homegrown brand launched by Ronald Lauder in 1979, and one of the largest in retail volume in EL's arsenal. Its closure shows that Mr. Freda is serious about dramatically restructuring the company.

"We believe that the difficult decision relating to Prescriptives will allow us to redirect our resources to key strategic imperatives where we see the highest growth potential," said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies. "Ultimately this action allows us to focus on those areas which we expect to benefit the Company, our shareholders and business partners. We intend to work closely with our retail partners and continue to communicate with our consumers to ensure a seamless transition."

In the May issue of WWD Beauty Biz, Mr. Freda gave a hint to the possible elimination of Prescriptives:

“We are really focused on fixing the underperforming brands,” Freda said in May. “We have finished a review of the brands and have identified which are the brands where we want to invest and which are the brands that today are underperforming by our standards. For the underperforming brands, we have put a specific plan [in place] for the next 18 to 24 months. In the case we are not successful in turning around the brands, we will make different decisions.”


When asked, he declined to identify which brands comprised that list, but emphasized that “small” and “underperforming” were not synonymous in the Lauder portfolio. “Smaller brands, if they have the right productivity per door, are very interesting businesses,” he said in May. (SOURCE: WWD.com)

Prescriptives was one of the top prestige brands in the mid-80s, enjoying prime cosmetic counter real estate in upscale department stores such as Neiman Marcus. But with the emergence of makeup artist cosmetics lines such as M.A.C. and Bobbi Brown in the mid-90s cut into Prescriptives' niche and thus began the brand's decline.

EL maintains ownership of the Prescriptives name as well as all its trademarks and assets. A company spokeswoman says that the Calyx fragrance will be merchandised by the Aramis and Designer Fragrances division.

For Prescriptives consumer support, toll free numbers have been set up in North America (1-877-819-2968, English, Spanish and French speaking), the United Kingdom (0800 088 4168) and the Republic of Ireland (1800 936 080).

(SOURCES: WWD.com, Estée LauderCompanies Inc.)

(Photo Credit: WWD.com)

Beyonce Announces Fragrance Launch....And Gets Sued!

(Photo: Kevin Mazur/WireImage)

One day after Beyoncé Knowles announced the launch of her new fragrance,  WWD.com announces that Abercrombie & Fitch Co. have filed a lawsuit against Ms. Knowles claiming trademark infringment:

"The teen retailer alleged in a federal complaint filed Tuesday that a scent with that label would infringe on its own Fierce cologne trademark.

But Coty said Wednesday Knowles’ dual personality would not factor into plans for her perfume, which will be sold in department stores globally and launch in the Americas in the spring.

“We can confirm at this time…that the terms Fierce and Sasha Fierce are not being used as names of a Beyoncé fragrance,” a Coty spokeswoman said." (SOURCE: WWD.com)

A&F claims that a "Sasha Fierce" fragrance would cause a "likelihood of confusion" for consumers. I doubt that. Up until now, most consumers didn't know Abercrombie sold a "Fierce" cologne.

But here's something that made me go WTF?

“A&F’s intent is that all garments that leave the store have the Fierce scent attached to them,” the company’s attorneys wrote.

Now, when I buy new clothes, I like for them to be fragrance-free, and I gather I'm not alone which would explain the company's high negagtive double digit comp. sales.

Instead of worrying about its "Fierce" cologne, Abercrombie needs to worry about the fierce charges of  racism and discrimination that have piled up against them over the years, the latest being the allegation that they wouldn't let a Muslim teen girl wear her hijab because it didn't fit their "look policy". And now they're suing one of the most beloved African American stars in the world over a word?

This won't end well.

Elizabeth Arden Posts Narrow Loss, Stock Down on View

Elizabeth Arden posts loss, stock down on view

LOS ANGELES, Aug 13 (Reuters) - Elizabeth Arden (RDEN.O) reported a narrower quarterly loss on Thursday as shoppers continued to spend conservatively on perfume and face creams, but shares fell 4.1 percent after its 2010 profit forecast missed expectations.

Net loss at Arden was $3.6 million, or 13 cents per share, for the fiscal fourth quarter ended June, 30, narrowing from its year-earlier net loss of $10.4 million, or 38 cents per share.

Excluding restructuring and other expenses, its net loss was 7 cents per share. That just beat the 8-cent loss expected by analysts, according to Reuters Estimates.

Net sales at Arden, which sells Prevage anti-aging cream and perfumes by celebrities such as Britney Spears and Mariah Carey, fell 10 percent to $212.6 million. Excluding the unfavorable impact of foreign currency translation, net sales declined 5.8 percent.

For its fiscal year ended June 2010, the company forecast a 2 percent to 3.5 percent increase in sales and earnings per share in the range of 50 cents to 65 cents per share.

Analysts, on average were looking for a 2010 profit of 72 cents per share, according to Reuters Estimates.

Shares in Arden, which closed at $10.45, fell to $10.02 in extended trade on the Nasdaq.

(Reporting by Lisa Baertlein and Aarthi Sivaraman in Seattle; Editing Bernard Orr) 

(SOURCE: Reuters.com)

U.S. Prestige Beauty Sales Decline 3.3%

A report released by marketing research firm, NPD Group, Inc. shows that U.S. sales of prestige beauty products dropped 3.3% in 2008.

Among the global markets that were tracked by NPD, the U.S. prestige market -- which are products sold mainly in U.S. department stores -- showed the largest decline. France and Italy showed decreases of 0.3% and 0.5% respectively, while China boasted an increase of 17.2%.

U.S. makeup sales also showed a decline, but there was a bright spot in the skincare category. Overall growth in the category remained flat, however NPD says that there is opportunity for growth due to increase interest in anti-aging skincare products.

Karen Grant, NPD's senior global industry analyst and vice president of beauty, said that U.S. fragrance category showed the biggest decline in sales of all the categories that were tracked. “The most pressing concerns for the fragrance category are not only the loss of users, but decreasing frequency of usage," said Ms. Grant. "It is important that the industry find new ways to engage consumers, especially as they become more independent about their product selection".