Financial focus: Most-read stories on business and financial news in the beauty industry

By Amanda Lim

- Last updated on GMT

A round-up of financial results, M&As and funding drives in the cosmetics industry. [Getty Images]
A round-up of financial results, M&As and funding drives in the cosmetics industry. [Getty Images]

Related tags financial results M&A funding

In this round-up of financial results, M&As and funding drives in the cosmetics industry, we highlight news of Shiseido selling of its personal care unit, POND’s plans to double e-commerce business in SEA and SUGAR Cosmetics expansion plans following Series C funding boost.

1 – ‘Prestige first’: Shiseido sells off personal care division for $1.5bn to focus on high-end skin care

Japanese cosmetic giant Shiseido Company has announced the decision to sell its low-cost personal care business​ to CVC Capital Partners in a deal worth 160 billion yen ($1.5bn) in order to focus on its more high-end cosmetic brands.

According to published documents, Shiseido will establish a new company with a 35% stake in ownership and CVC will acquire 65% as a joint venture. The transfer date is set for July 2021.

The business unit in question consists of well-known global drugstore brands including Senka skin care and Tsubaki hair care products, as well as other brands such as SUPER MiLD that are primarily available in Japan.

However, Shiseido said that in order to maximise the growth potential of the brands in today’s competitive market, it would require ‘enhanced’ marketing investment.

2 – POND’S aiming to double e-commerce business over the next five years as it works to scale up business in SEA

Unilever-owned POND’S says its goal is to double its e-commerce business over the next five years​ as it aims to ramp up growth in the South East Asian region.

Despite the situation with the COVID-19 pandemic, the brand enjoyed a healthy year, according to Rohit Bhasin, global VP, Unilever POND’S.

“Last year was good for POND’S. The business was tough because we had a lot of lockdowns across our markets. The overall beauty market shrank by double-digits, but we made sure we gained share comparatively even in a declining market,”​ said Bhasin.

Like most brands, POND’S saw that consumer spend shifted to e-commerce in the past year.

3 – Sweet deal: SUGAR Cosmetics revs up online and offline expansion as it plans to double revenue this year

India-based beauty brand SUGAR Cosmetics is aiming to double its revenue by expanding online​ and offline distribution after closing $21m Series C funding.

Speaking to CosmeticsDesign-Asia, CEO Vineeta Singh said that like many businesses in India, it experienced a massive loss of sales during the lockdown.

“After the lockdown was announced in March, the company’s warehouses, retail operations, and logistics came to a halt. Our new launches coming from international manufacturing units were stalled.”

She revealed that the team even had to take salary cuts and reshuffle jobs to deal with the crisis. Despite the tough situation, the company managed to return to profitability by the third quarter and closed FY2020 at a net revenue of Rs 105 Cr (USD14.5m).

“We ensured we focused on adaptive strategies, clear communication and preparing so once the lockdown lifted, SUGAR could hit the ground running. And that’s what happened, by Q3, we were back to more than 150% revenues of pre-COVID levels,” ​said Singh.

4 – Masstige move? Estée Lauder to acquire Deciem in two-part deal

Prestige beauty major The Estée Lauder Companies will up its investment in mass functional beauty​ player Deciem, establishing terms for full ownership in three years – a move that will diversify it into the increasingly important masstige market, an expert says.

Since 2017, Estée Lauder already held a 29% stake in Deciem – maker of The Ordinary and NIOD skin care brands – and would increase this to a 76% majority stake in the first phase of its acquisition, set to close end of June 2021 and cost around €823m ($1bn) to reflect a total enterprise value of €1.81bn ($2.2bn). The Estée Lauder Companies would then purchase the remaining Deciem interests after a three-year period in a second-phase investment, the cost of which was yet to be determined.

The acquisition, subject to regulatory approvals, would see Estée Lauder take on all seven of Deciem’s skin care brands: The Ordinary, NIOD, Hylamide, The Chemistry Brand, Abnomaly, Loopha and HIF, sold primarily via e-commerce and select specialty and freestanding stores in the UK, US and Canada. Deciem’s brand portfolio totted up net sales of approximately €378.5m ($460m) in the 12 months ending January 31, 2021.

5 – ‘Shoppertainment’ and skin care: Perfect Corp pushing developments related to skin care and personalised livestreaming

Taiwan-based beauty tech firm Perfect Corp is aiming to develop AI- and AR-powered technology​ for skin care analysis and live commerce applications following its latest round of funding.

The developer of virtual beauty app, YouCam Makeup, announced on January 6 that it had closed a US$50m Series C funding led by Goldman Sachs.

This comes at an interesting time for the company as the online channel has become the main avenue for beauty brands to engage with their consumers.

“COVID-19 continues to impact the physical retail businesses as many beauty shoppers have turned towards shopping for their beauty products online. To be able to provide the product try-on experience digitally on the website, many beauty brands have adopted the AR virtual try-on technology to help the consumer to virtually experience the product,”​ said Louis Chen, Chief strategy officer and SVP of business development, Perfect Corp.

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