Financial Focus

Summer slowdown, so what now for cosmetics industry’s big guns?

By Andrew MCDOUGALL contact

- Last updated on GMT

Summer slowdown, so what now for cosmetics industry’s big guns?

Related tags: Developed country, Brand management, Procter & gamble

It was a slow summer for many of the cosmetics industry’s big players and CosmeticsDesign-Europe.com takes a look at how this affected five of the manufacturers in Europe and what their plans are for the future.

As a developed market, Western Europe is unlikely to be the home of big market gains, and it appeared it was emerging markets that took the blame for stuttering growth, particularly for Europe-based Beiersdorf and Unilever.

The Germany-headquartered firm saw a lift in sales for its Nivea, Eucerin and La Prairie​ brands with growth of 6.1%, 6.8%, and 7% respectively. However it did not that sales in Europe had slowed due to market saturation.

Over at Anglo-Dutch company Unilever, the slowdown was attributed to Russia and China by CFO Jean-Marc Huet​, and CEO Paul Polman said the group would continue to tilt its portfolio towards higher-growth personal and home care and away from food.

Analyst expectation

Fellow European beauty behemoth L’Oreal also felt the hit of a slowdown, coming in under analyst expectation, but it did reaffirm its desire to push ahead with its digital drive.

L’Oreal’s commitment to pushing its digital agenda globally participates in the company’s aggressive expansion plan, which looks to reach an extra billion consumers by 2020, doubling its current consumer-base.

This saw the appointment of its first ever chief marketing officer in the UK​ to push the brands nationally, with Hugh Pile entrusted with this responsibility.

In another move set to further this vision, L’Oreal recently acquired NYX Cosmetics, a brand which has cornered the market in video marketing.

Across the pond

Looking further adrift at companies based elsewhere, there were mixed fortunes at Procter & Gamble and at Estée Lauder.

Following a financial year where P&G has seen its sales continue to slide, the company has announced that it will slash the size of its product portfolio​ by more than half in an effort to make the business more efficient.

However, over at Estée Lauder, the company posted record-breaking fourth quarter and full year results​ that show the company is continuing to lead the field, and on a regional basis, the strongest growth was seen in the Europe, Middle East and Africa region.

This has even lead to further speculation that with so much cash in hand at Estée Lauder it could be set to further acquires more brand, having not done so for a number of years. Something that CEO Fabrizio Freda has not ruled out​.

Related topics: Business & Financial

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