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L’Oréal offered a sign that beauty is continuing to radiate in an otherwise tough retail market to start 2023.
The world’s largest cosmetics and beauty company posted sales growth of 13% like-for-like for the first quarter of the year. According to the company's earnings report , growth came in all divisions, paced by 30.6% year-over-year growth in dermatological beauty, and 14.7% growth in consumer products.
In North America, L’Oréal grew 16.6%, with consumer products innovation at Maybelline New York, L’Oréal Paris, and Garnier providing a lift.
“Boosted by valorised innovations in all divisions and the engagement of our teams around the world, L’Oréal has outperformed the market in all geographic zones and strengthened its leadership position,” said CEO Nicolas Hieronimus, in a statement. “This performance, which has yet to benefit from China’s reopening, demonstrates the strength of L’Oréal’s balanced multipolar model.
L’Oréal’s performance arrives as the beauty market continues to post strong results, despite a consumer pullback in other consumer categories amid inflation. Instead of seeking out less expensive products, consumers in this category are trading up, as prestige beauty sales growth to $27 billion in revenue outpaced mass beauty, according to Circana (formerly IRI and NPD Group). It appears the lipstick index is trending toward luxe.
“For many consumers, beauty is indispensable,” said Larissa Jensen, beauty industry advisor at Circana, in a statement. “In fact, among beauty shoppers who reported reducing their overall spending due to inflation, seven out of ten said they were not cutting back on their beauty spending. On the contrary, consumers have shown us that when economic sentiment gets shaky, they turn to prestige beauty products for an emotional lift. This ‘treat mindset’ is a big piece of what ties the complete beauty industry picture together.”
On the company’s earnings call, Hieronimus said beauty products are increasingly being embraced beyond occasions, and moving toward wellness. Fragrance is now an every day product, as opposed to one that is used for going out on Saturday night, he said. Jensen said fragrance is being tapped by consumers for “self care,” whether to lift their mood, de-stress or energize. Skincare products also have multiple uses, from aging to daily UV protection.
“We are lucky to be in this market where people are spending money to take care of themselves, not just to feel good but also to protect their skin, their hair,” Hieronimus said. “That’s what makes me confident that the beauty markets will continue to grow.”
L’Oréal is seeking to continue its gains by adding new brands to its portfolio. The results arrive on the heels of the announcement that L’Oréal will be acquiring the luxe brand Aesop from Natura & Co. for $2.5 billion. When the deal was announced, Hieronimus called the brand a “superb combination of urbanity, hedonism and undeniable luxury.”
"Mindful of the current uncertainties, we remain optimistic about the outlook for the beauty market, ambitious for the future and confident in our ability to keep outperforming the market and achieve another year of growth in sales and profits in 2023," said Hieronimus.
Trending in Brand News
On the Move has the latest from Amazon, Lovesac and more.
This week, leadership is changing at GameStop, Sorel and Beautycounter. Meanwhile, key executives are departing at Amazon, Wayfair and Lovesac.
Here’s a look at the latest shuffles:
GameStop CEO fired
GameStop announced the termination of Matthew Furlong as CEO on Wednesday. A brief statement did not provide a reason for the firing.
With the move, Chewy founder and activist investor Ryan Cohen was named executive chairman of the video game retailer. Cohen will be responsible for capital allocation and overseeing management.
It came as the company reported a 10% year-over-year decline in net sales for the first quarter. Meanwhile, the company’s net loss improved by 62%.
In an SEC filing, GameStop further added this “We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders.”
Cohen was revealed as GameStop's largest shareholder when he disclosed a 10% stake in the retailer in 2020. GameStop went on to become a leading name in the meme stock rise of 2021.
Sorel president steps down
Mark Nenow is stepping down as president of the Sorel brand in order to focus on his health.
After rising to the role in 2015, Nenow spearheaded a transformation of Columbia Sportswear-owned Sorel from a men’s workwear brand to a fashion-focused brand that led with a women’s offering of boots, sandals and sneakers.
“Mark led the brand to sales of $347 million in net sales in 2022,” said Columbia Sportswear CEO Tim Boyle, in a statement. “His leadership has been invaluable to this company, and we wish him the very best.”
Columbia will conduct a search for Nenow’s replacement. Craig Zanon, the company’s SVP of emerging brands, will lead Sorel in the interim.
Beautycounter appoints interim CEO
Beautycounter appointed board member Mindy Mackenzie as interim CEO, succeeding Marc Rey. According to the brand, Rey and the board “mutually decided to transition to a new phase of leadership for Beautycounter.”
McKenzie, a former executive at Carlyle, McKinsey and Jim Beam, will lead the company as it conducts a search for a permanent CEO. Additionally, former Natura & Co CEO Roberto Marques will join Beautycounter’s board as chair.
As part of the transition, Nicole Malozi is also joining the company as chief financial officer. She brings experience from Tatcha, Nike, and DFS Group Limited.
Amazon’s North America fulfillment chief departs
Melissa Nick, a VP of customer fulfillment for North America at Amazon, will leave the company, effective June 16, CNBC reported . Nick joined the company in 2014, and oversaw a region that included nearly 300 fulfillment centers. After doubling its supply chain footprint during the pandemic, Amazon recently reorganized its fulfillment operations to take a regional approach, as opposed to a national model that often resulted in items shipping across the country.
Wayfair’s chief commercial officer to retire
Jon Blotner (Courtesy photo)
Steve Oblak will retire from the role of chief commercial officer at home goods marketplace Wayfair. With the move, Jon Blotner will be promoted to chief commercial officer.
"Steve has served as a critical part of our leadership team and played a pivotal role in Wayfair's growth, helping us grow from a $250 million business when he joined to $12 billion in net revenue today,” said Wayfair CEO Niraj Shah, in a statement. “He oversaw countless milestones, from helping to launch the Wayfair brand as we brought together hundreds of sites into a single platform, to launching new categories, business lines, and geographies while overseeing our North American and European businesses, to leading our debut into physical retail.”
Blotner previously oversaw exclusive and specialty retail brands, as well as digital media at Wayfair. Before joining the company, he served as president of Gemvara.com prior to its 2016 acquisition by Berkshire Hathaway.
Lovesac announces CFO transition
Furniture retailer Lovesac said Donna Dellomo will retire as EVP and CFO, and move to an advisory role, effective June 30. Dellomo was with Lovesac for six years.
Keith Siegner was appointed as the next EVP and CFO. He brings experience as CFO of esports company Vindex, as well as executive roles at Yum! Brands, UBS Securities and Credit Suisse.
Additionally, Jack Krause will retire from the role of chief strategy officer, effective June 30. His responsibilities will be divided between CEO Shawn Nelson and president Mary Fox.
“Since joining Lovesac, Jack has played an instrumental role in transforming the Company into a true omni channel retailer by helping expand our physical touchpoints and digital platform as we continue to disrupt the industry,” said Nelson, in a statement.
NRF adds board members
The National Retail Federation announced the addition of five new board members. They include:
- Marguerite Adzick , founder and CEO, Addison Bay
- Harley Finkelstein, president, Shopify
- Ian Kahn , partner, PwC
- Sharon Leite, CEO, Ideal Image
- Carrie Tharp, VP, strategic industries, Google Cloud