As some of you might know, I’m expecting my second child later this month. I plan to take the very necessary, fully paid parental leave that I’m offered at The Business of Fashion (which should be mandatory everywhere), so this will be my last column for The Business of Beauty until the spring.
With a newborn and a two-year-old at home, I fully expect to be in the throes of chaos, complete with sleepless nights, nursing and postpartum complications. I certainly was last time. But, I imagine sooner or later there will be some days that I’ll be thinking about beauty – not my own vanity necessarily, but the evolving and ever-active industry that we work in.
I have plenty of thoughts and questions about what the next several months are going to look like (these have only been intensified by my multiple pregnancy wake ups a night). Since it’ll be a while before I write any more columns where I unpack those ideas, here are the things I’ll be watching and wondering about during my time away:
Which Beauty Retailer Will Win Over Gen Alpha?
I love Piper Sandler’s annual “Taking Stock of Teens” survey. For years, Ulta Beauty has taken the top spot for beauty destinations, with 41 percent of teens saying it was their preferred retailer to shop for cosmetics and skincare in 2023. This year, the US’s biggest beauty store ceded share: Sephora took the number one position on the survey with 37 percent of teens reporting that they shopped there versus 31 percent saying they are more partial to Ulta Beauty.
Given the recent headlines and outrage around “Sephora Tweens” I wasn’t totally surprised by the data, but how did this happen?
Ulta Beauty won the generational war against Sephora with Millennials and older Gen-Zers, but young Gen-Z and Gen Alpha have recently made the latter the retailer to beat. Despite Sephora’s overall higher price point and positioning, its emphasis on skincare and beauty playground atmosphere has made it a go-to for tweens.
Right now, I’m not totally sold on the notion that Sephora’s assortment just veers more to Gen Alpha (Drunk Elephant and Sol de Janeiro, Gen Alpha favourites, have both expanded to Ulta Beauty), but I am interested in how Ulta Beauty goes on the offensive through product. In its heyday, its partnerships with celebrity brands like Kylie Cosmetics, KKW and Florence by Mills did the trick alongside its broad assortment of high end and affordable lines. While that’s not an exact solve today, Hailey Bieber’s Rhode, which is said to be looking for a retail partner, still hasn’t found wholesale distribution.
What Happens to the Big Makeup M&A Boom?
For the better part of the year, you have heard me go on about how competitive the beauty M&A market is, especially for colour cosmetics. Considering that it is July, 2024 hasn’t proven to be the frothy deal-making scene that was expected at the end of last year. So many brands are in the market, and it’s going to take much of the year to figure out who gets bought, by whom and for how much.
Much like 2023, when K18 and Dr. Dennis Gross announced that they were acquired on the same day by Unilever and Shiseido, respectively, I suspect most of these lines aren’t going to find homes till the winter.
As for Rare Beauty, I’m still betting no decisions will be made until 2025.
Will The Estée Lauder Companies’ Fabrizio Freda Stay Put?
When The Estée Lauder Companies announced its recovery playbook alongside its sixth consecutive quarter of declining sales in February, many in our world expected that president and chief executive Fabrizio Freda would be out before long. The company has already confirmed that longtime chief financial officer, Tracey Travis, will be retiring in June 2025.
While succession theories featuring Jane Lauder, heir and executive vice president of enterprise marketing and chief data officer, and executive group president Stephane de La Faverie have loomed since last year, it appears that Freda is committed to the conglomerate’s turnaround plan. That includes its up to five percent workforce reduction, which is said to be announced later this summer. Sources tell me that Freda is staying put to get the company through to the other side. But, I wouldn’t be surprised to see more very important ELC leadership changes occur before the end of the year.
Will Luxury’s Beauty Strategy Take Hold?
It was just over a year ago that LVMH named Stéphane Rinderknech as chairman and chief executive of the company’s beauty division. In the time since, the luxury house’s overall beauty strategy hasn’t shifted much, except for the announcement of the much-anticipated Celine Beauty, set to debut this fall. LVMH’s beauty business remains on fire. Insiders have said that Rinderknech is eyeing acquisitions to make his mark. I’ve heard that fragrance-heavy brands are very much in the mix. Remember, the conglomerate was once in the running for Aesop.
Over at Kering, more of its luxury lines are focussed on extensions, with one reportedly launching fragrance this fall. The LVMH competitor has yet to make big moves since the Creed acquisition last year, so I imagine more of its owned brands will begin to make beauty-centric announcements in the near future starting with perfumes. The same can be said for Richemont but details on Cartier’s beauty announcement remain under lock and key. And of course, ELC’s big reveal on Balmain Beauty (and whether it has the legs to be the blockbuster that is Tom Ford) is set to be unveiled for Fashion Month.
Though the chasm between the haves and the have nots continues to widen, I expect to see more beauty labels make their ultra luxury bet.
That’s it for me for now. In the coming months, our fantastic beauty correspondents, Daniela Morosini and Liz Flora, will be your go-tos for breaking news and features. BoF’s executive editor Brian Baskin and news and features editor Diana Pearl will be shepherding our coverage. And don’t forget to look out for columns and stories from our regular contributors like Isamaya Ffrench, Faran Krentcil, Brennan Kilbane and more.
See you in the spring!
