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)

Estee Lauder Buys Smashbox Cosmetics

The Estée Lauder Companies adds another prestige cosmetics brand to its portfolio with the acquisition of Smashbox Cosmetics Beauty, Inc., the makeup company founded in 1996 by Dean and Davis Factor (left), great-grandsons of the legendary makeup artist, Max Factor, in an effort to provide products for makeup artists on professional photo shoots.

EL Cos. announced their definitive agreement with the L.A. based company on Monday, saying that the deal will close in July and will add to earnings in 2011, minus transaction and integration costs. The purchase price is unknown, however sources told WWD that the price tag was between $200M and $300M. The deal also includes a minority stake in Smashbox Studios, the Los Angeles facility started by the Factors in 1991.

With EL's strategic priorities focused on skin care and Asia, Smashbox doesn't fit the bill of a desirable acquisition. However, the makeup brand has a strong presence in open-sell environments and is a well known brand in specialty channels, such as QVC and Sephora, allowing EL to have a stronger presence in alternative retail channels. Smashbox also has expertise in digital and social media, which will help Estee Lauder to expand and reach new and younger customers. In exchange, Smashbox will be able to expand globally via EL's international experience.

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)