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THE PARALLEL TRAJECTORIES OF FASHION AND BEAUTY BEYOND BEAUTY 2014 NICOLE TYRIMOU, BEAUTY AND PERSONAL CARE ANALYST

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BEAUTY AND FASHION ALIGNMENT

GEOGRAPHICAL GROWTH OPPORTUNITIES

KEY CATEGORY FOCUS

FUTURE PROSPECTS


4

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2008 2009 2010 2011 2012 2013

US

$ m

illi

on

Apparel Beauty

Beauty Less Than A Third Of The Total Apparel Market




5

0

1

2

3

4

5

6

7

2004 2006 2008 2010 2012 2014

% G

row

th

Apparel vs. Beauty Growth

Apparel Beauty

The Parallel Lives Of The Industries




6

Luxury Fashion And Premium Beauty Grow In Alignment


-4

-2

0

2

4

6

8

10

12

14

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2008 2009 2010 2011 2012 2013

Ye

ar-

on

-Ye

ar

% G

row

th

US

$ M

illio

n

Designerwear Premium Beauty Designerwear % Growth Premium Beauty % Growth



7

Different Roots To Entry


Collaborations

Licenses

In-House




KEY CATEGORY FOCUS

FUTURE PROSPECTS


9

US$ 1-4Billion US$ 7 Billion

Premium Beauty - Asia Pacific Dominates while Western Europe Rises


US$ 34 Billion US$ 20-25 Billion

4.5%

16%

4%

2.3%

0.7% 3.4%

%value growth 2013

15%



10

US$ 2-5Billion US$ 5-8 Billion

Designerwear Remains Heavily Depended On Mature Markets


US$ 50 Billion US$ 25-32 Billion

6%

9%

8%

7%

5%

1.5% 4.6%

%value growth 2013



11

Consumers In Emerging Markets Have The Highest Interest For Luxury




12

But.. Consumers’ Interest In Luxury Fragrance Remains Universal





KEY CATEGORY FOCUS

FUTURE PROSPECTS


14

0

1

2

3

4

5

6

7

8

9

10

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

PremiumSkin Care

PremiumFragrances

PremiumColour

Cosmetics

PremiumHair Care

PremiumSun Care

PremiumBath andShower

PremiumBaby/ChildProducts

% V

alu

e G

ro

wth

US

$ m

illi

on

2013US$mn 2011-12% growth 2012-13%

Slowdown In Top Two Premium Categories

KEY CATEGORY FOCUS



15

Brand Loyalty In Skin Care and Colour Cosmetics prevails

KEY CATEGORY FOCUS

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Apparel & Footwear Skin care Fragrances Colour Cosmetics

% o

f re

sp

on

de

nts

Brand Loyalty within Consumers Interested in Luxury

Loyal Disloyal

Source: Euromonitor International Analyst Survey Note: Showing percent of respondents interested in luxury – purchasing habits



16

Fashion Brands Struggle To Make An Impact In Skin Care

KEY CATEGORY FOCUS



17

High profit margins

Asia Pacific influence

Affinity to luxury

Yves Saint Laurent Or Rouge Christian Dior Dream Skin

Dolce & Gabbana skin care Tom Ford men’s skin care

Fashion Brands Up Their Investment In Skin Care

KEY CATEGORY FOCUS



18

-1

0

1

2

3

4

5

6

-10

90

190

290

390

490

Fragrances ColourCosmetics

Skin Care Fragrances ColourCosmetics

Skin Care

Christian Dior Chanel

% G

row

th

US$

mill

ion

2008-13 value growth 2008-13 CAGR

The Fashion Giants Of Beauty

KEY CATEGORY FOCUS



19

Fragrance Skin Care Colour Cosmetics

New Entries From The Fashion World

KEY CATEGORY FOCUS



20

J Crew

Fragrances

& Other Stories

Beauty

Top Shop

Facial Make-Up

Apparel Brands Moving Into Beauty

KEY CATEGORY FOCUS



21

Fashion Brands Launching Stand-alone Beauty Stores

KEY CATEGORY FOCUS

RETAIL



22

Christian Dior took over Harrods London 2013

Chanel celebrates mother’s day London 2013

Events And Exhibitions Around The Brand

KEY CATEGORY FOCUS



23

Revival of the brand with new fashion line

and accessories

Puig opens new office in Paris to be closer to

fashion lines

90% of sales come from fragrances

Can Success In Beauty Revive The Fashion Image?

KEY CATEGORY FOCUS




KEY CATEGORY FOCUS

FUTURE PROSPECTS


25

US Italy Japan

France China UK

Russia Germany South Korea

Others

US$3.7 billion

US$1.5 billion

US$1.4 billion

The Future Of Designer Wear Stays In Mature Markets

FUTURE PROSPECTS

TOTAL in

2018

US$154

billion



26

Premium Future Growth Concentrated In Three Categories

FUTURE PROSPECTS

Country 2013-18 US$ mn growth

China 4,335

US 2,970

South Korea 1,489

Brazil 805

UK 755

Saudi Arabia 731

Russia 575

Germany 399

Key absolute growth markets

$20,6billion

$6.7billion

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Absolute Growth 2013-18 US$ million

US

$ m

illi

on

Skin care

Hair Care

Colour Cosmetics

Fragrances

Key absolute growth categories



27

0

2000

4000

6000

8000

10000

12000

14000

2013 2018

US

$ m

illi

on

Men’s designer wear selected top markets 20013 vs. 2018

US France China South Korea

0

200

400

600

800

1000

1200

2013 2018

US

$ m

illi

on

Men’s premium skin care selected top markets 2013 vs. 2018

South Korea China US France

Unexplored Territories – Men’s Grooming

FUTURE PROSPECTS



28

Unexplored Categories - Baby And Child Specific Products

FUTURE PROSPECTS



29

Key Takeaways

FUTURE PROSPECTS

Asia/China – Key white space for fashion brands in skin care

Middle East – Easy entry point for designer fragrances

USA – Holds equal potential across all beauty segments

Fashion Beauty



30

Future Issues To Consider

FUTURE PROSPECTS

Fierce Competition

Sustaining Affordable

Luxury

Lifestyle Status


THANK YOU FOR LISTENING Nicole Tyrimou

Analyst - Beauty and Personal Care Research

[email protected]

@Nicole_Tyrimou

mailto:[email protected]

https://twitter.com/Nicole_Tyrimou

https://twitter.com/Nicole_Tyrimou