Beauty and cosmetics news round-up for Q1 2023
The first quarter of 2023 was filled to the brim with an array of ups and downs in the beauty sector. While many took to integrating new hires and carrying out various degrees of expansion plans, others were attempting to simply find stable footing after years of market uncertainty. It was also a period of significant change for many brands and beauty groups, as they looked to new markets via either retail growth or debut categories. Luxury fashion conglomerates also made big moves to kick off the year, either in the form of top appointments or major investments.
Big names hire big names
Large scale beauty and cosmetics conglomerates led the way with new hires this quarter, as seen at L’Oréal, which hired a new chief executive for its French division, and Estée Lauder Companies, where group veteran Lahnie Strange was appointed SVP global general manager. Following a lengthy search process, Unilever also finally selected Hein Schumacher as its new CEO, months after former head Alan Jope retired. Japanese cosmetics giant Shiseido also announced a reshuffle in its US team, selecting Agnes Landau as its new chief marketing officer. Luxury fashion conglomerates also got in on the hiring hype as they continue to bank on the industry as a stable source of revenue. Kering named Raffaella Cornaggia CEO of Kering Beauté, a new division for the fashion house that it expects to add to its portfolio of brands, while LVMH appointed Stéphane Rinderknech CEO of its own beauty segment, and tasked him with leading the division’s reorganisation. Finally, newly established Balmain Beauty appointed Hans Dorsinville as SVP global creative.
Meanwhile, other cosmetics brands were also making big hires, many doing so to establish a specific area of their business. For Bath & Body Works, this involved hiring Heather Hollander as VP of investor relations, while start-up Underlining named former Unilever exec Tobias Kuetscher its chief growth officer. Sheryl Adkins-Green was selected to be chief experience officer to support the brand’s independent beauty consultants and at Ole Henriksen, fashion designer Anine Bing was named as the brand’s first advisor. At Ariane Grande’s beauty brand, R.e.m. Beauty, Michelle Shigemasa joined as the company’s new CEO.
Bankruptcies and lawsuits
The first quarter saw many companies, once large-scale, begin to fall by the wayside. This rang true namely for Forma Brands, the parent company of Morphe, who ended up filing for bankruptcy. Prior to the filing, it was revealed that Morphe was to close its US stores after being heavily impacted by the pandemic and a series of allegations made against partnered influencers. Ultimately, Forma agreed to an asset acquisition by holding company FB Debt Financing Guarantor. Bed, Bath & Beyond was also among those struggling to get a foothold. The company reported a 33 percent fall in sales for Q3 2022 just weeks after it announced it was mulling a bankruptcy filing. The company later stated that it was seeking to approve a reverse stock split plan in order to help rebuild liquidity. Luxury marketplace The RealReal was another that opted to step back, albeit solely for its beauty division, which it said it would be winding down as part of its efforts to streamline its business.
Other companies were in trouble for differing legal issues. For one, following a lengthy investigation, Revolution Beauty was found to have inflated its sales by nine million pounds in a bid to meet its annual targets. L’Oréal, on the other hand, was subject to 57 lawsuits in the US for selling hair relaxer products that allegedly had cancer-causing properties. Meanwhile, larger authorities are taking steps to ensure the beauty industry is reformed in a positive way. The Swiss Competition Commission announced it would be investigating three international fragrance and cosmetics firms for allegations of price fixing. In the US, the government was also looking to make adjustments to its Food and Drugs Adminsitration’s (FDA) cosmetics framework to ensure reformation industry-wide.
Launches and expansions
While some brands were taking a step back, others were making significant moves as they continue to bet on beauty as a secure form of revenue. Fashion retailer Zara expanded its beauty offering with the launch of a beauty capsule for children, while online luxury e-tailer Moda Operandi took its first steps into beauty, introducing a curated beauty collection on its site. Luxury brand Hèrmes also said it would be betting on beauty, revealing that it was planning to expand its product range by 15 new products in response to a 15 percent increase in sales. It is not the only one to see soaring revenue in this sector. Retail giant Ulta Beauty announced that it had hit one billion dollars in sales for the first time, crediting the strong resilience of the category.
Glossier also had a first for this quarter. The brand, once only available via its online website, entered third-party retail for the first time via a partnership with Sephora. Meanwhile, Ariana Grande’s R.e.m. Beauty took a similar move, launching in 81 of the beauty giant’s stores and 13 online sites. Sephora itself also took some large steps at the beginning of this year, with its return to the UK and the opening of a new store in London. It followed on from the brand’s launch of a website in the region, a move it made towards the end of last year. US-minimalist brand Merit also entered the UK via DTC site, while New York company Maëlys stepped into the Canadian market for the first time. Another brand making moves was that of Jil Sander, which renewed its partnership with Coty as it looked to enter into the ultra-premium segment of the fragrance market through a future-focused strategy.