In the last week, there have been several headlines demonstrating the true financial impact of Covid-19 on the beauty industry, as big beauty names declare the effects on profits or, in some cases, confirm the sale of business to prioritise and regroup. Nevertheless, there are brands in various corners of the globe also enjoying the positives from the shift in consumer behaviour and focus. Below we take a look at several brands who have recently hit the headlines and experienced significant impact to sales.
Japanese beauty brand Shiseido reported a drop in their Q1 net profit, having plummeted 95.8% due to the pandemic. In the first three months, the company witnessed sales fall across its eight business categories. In keeping with patterns seen in the UK however, Shiseido’s e-commerce sales in China grew 25% over the same period as lockdown was implemented.
Shiseido’s Americas business also benefitted from a strong quarter of e-commerce sales owing to their recently acquired skincare brand, Drunk Elephant. The brand reported to WWD:
“Going forward, business results are still subject to uncertainties, such as the viral spread and the timing of resumption of economic activities due to regulatory measures taken by each country. It is currently very difficult to assess trends and the impact of these uncertainties.”
Nevertheless, President and CEO Masahiko Uotani emphasised that the brand will use the opportunity to transform the business which includes making strategic investments in China as the market sees signs of improvement.
As consumers shift their focus to inner wellbeing, Singapore-based fragrance brand SIX has seen a remarkable rise in home fragrances. Founder and former Givaudan executive Jason Lee told Cosmetics Design Asia:
“Instead of luxury goods like watches, bags and clothes, people are channeling their money into things that will make them feel and live better while at home. COVID-19 has forced us to focus on the emotional and psychological, and people now realise fragrance plays an important role in our wellbeing.”
Furthermore, in the wake of demand for hand sanitiser products, Lee has gone one step further on the wellbeing trend, launching a range of hand sanitisers called Whiff, blended with essential oils to offer additional benefits such as aiding concentration, relaxation and sleep.
Meanwhile Revlon saw revenue fall 18.1%, as a result of impacted sales in the last few weeks of Q1. Revlon Inc.’s President and CEO, Debbie Perelman told WWD:
“Although our business was significantly impacted during the first quarter of 2020 by the ongoing global COVID-19 pandemic, we have taken aggressive steps to mitigate these effects and feel confident that we will emerge well positioned to continue our transformation and maintain our leadership position within the beauty category”.
Once again, it was e-commerce and personal care that seemed to do well despite the crisis, with Elizabeth Arden and Revlon hair colour sales strengthened as markets went into lockdown. These results contributed to a growth of 47% in the company’s e-commerce category.
The Nue Co.
The US supplement brand saw a 20% sales hike in March, whilst the repeat purchase rate jumped from 60 to 78%. As Business of Fashion states, the brand is in an exceptional position: not only is 80% of the business direct to consumer (DTC), but its supplement range targets several wellness concerns from sleep to gut health and immunity (unsurprisingly, Googles searches for the latter have soared since March).
In one week alone, sales for the brand’s “Immunity” capsules and tincture with “immune boosting” properties, ‘Defence Drops’ rose 70%, putting them in their top three best-selling items. To meet the demand, the team increased supply of their tincture by working with manufacturers to reduce production costs so bulk-order savings could be passed onto their customers.
Late last year, Coty announced plans to divest its retail hair and professional beauty business in order to prioritise their cosmetics, fragrance and skincare businesses. On Monday 11 May, the business signed a deal to bring these plans into fruition. The brands will be collectively grouped together under a standalone company called “Wella”.
In agreement with global investment company KKR, Coty has signed over 60% ownership of the professional beauty and retail hair brands, including Wella, Clairol, GHD and OPI. The move comes at a time when this category is enjoying significant limelight as professional hair and nail salons remain shut and consumers try to take control at home.
Sylvie Moreau, President of Coty Professional Beauty told Premium Beauty News:
“We are thrilled with this announcement. KKR is one of the world’s preeminent investment firms with an exemplary track record of value creation. As a market leader with one of the strongest portfolios of brands in the professional beauty market, we believe this partnership opens up a new set of opportunities for ‘Wella,’ our people, and our brands.”
Subscription-based DTC beauty brand Beauty Pie is celebrated among beauty fanatics for its premium quality beauty products at accessible prices. After just three days of trading, its first pop-up shop at Harvey Nichols London had to close when UK lockdown was put in place mid-March.
Nevertheless, the brand reported on 15 May that members had been saying they keep running out of their set ‘Spending Limit’ but were keen to try “candles, body cream and hair conditioner… but they need their skincare covered, and not in the ‘mode’ to upgrade at the moment.” In response to this demand and in consideration of consumer financial concerns, Beauty Pie responded offering phased ‘one-time top-up’ allowances to its members. Almost immediately, the demand forced the team to install a queue system to prevent their website from crashing.