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Beauty Beat: Beauty Sales in Italy to Rise 2.5%… Estee Lauder Sued by Nefeli..

Unipro, the association for Italian cosmetics industries, has released preliminary sales results for 2007...

MILAN — Unipro, the association for Italian cosmetics industries, has released preliminary sales results for 2007 and recapped the history of the Italian beauty industry during the 40 years since the association was founded.

Italy’s beauty industry is on track to close this year with combined sales of 8.9 billion euros, or $13.06 billion at current exchange, a 2.5 percent increase from 2006. This year’s figure is a long stretch from the industry’s turnover in 1967, the year Unipro was founded, when sales were the equivalent of 110 million euros.

At a recent party marking Unipro’s 40th anniversary, Emma Bonino, the Italian government minister for international commerce, inaugurated the event with a speech that championed the importance of Italian beauty companies, regardless of their size.

“The Italian beauty sector has a grand future because it incorporates every aspect of Italian strength in business: technology, innovation and creativity,” said Bonino, adding the Italian beauty industry is considered one of five major Italian industries including fashion, food, automobile and home furnishings.

For 2008, Bonino outlined the importance of the Middle Eastern and Southeast Asian markets for the Italian beauty industry and said further sales growth was expected from key export markets like Europe, Japan, Russia and the U.S.

Unipro executives confirmed the Italian beauty industry would most likely top 9 billion euros, or $13.2 billion, in sales in 2008, despite a hike in raw materials prices.

Fabio Franchina, president of Unipro, said the association took its anniversary as an opportunity to look at the history of small, medium and multinational companies in the Italian beauty industry.

“We’re studying the companies’ dynamics over the years,” said Franchina, “and looking at them now in order to locate their principal sources of competitive advantages and equip them with useful tools to confront the future,” said Franchina.

In order to survive, said Franchina, Italian beauty firms must invest in research, innovation and internationalization.
— Stephanie Epiro

Estée Lauder Sued by Nefeli

NEW YORK — Nefeli Corp., a company that markets skin care products incorporating traditional Chinese medicine concepts, sued the Estée Lauder Cos. Inc. for $5 million in state court. The case was filed in July by Nefeli and its founder, Dr. Ping Zhang, but only recently came to light.

According to legal documents, Nefeli alleged that it entered into a secrecy agreement with Estée Lauder in June 2005 to provide the company with confidential information, samples, technology and material used in the Nefeli skin care line. The agreement was later extended to include Origins, Nefeli said.

According to the legal documents, Nefeli alleged that Lauder analyzed and reverse engineered product samples after receiving products and information from Nefeli. The lawsuit contained allegations of breach of contract and fraud. Zhang also said Origins Youthtopia products, which use herbal Rhodiola to fight aging, falsely claim to be a new approach. Nefeli said it has used Rhodiola for some time.

Lauder said it declines to comment on pending litigation, but in court documents filed in answer to the complaint denied the allegations.

Board Moves at L’Oréal

PARIS — L’Oréal announced Friday that Franck Riboud has decided to end his tenure as a director of the company’s board, a position he has held since 2002. The French beauty giant’s board has co-opted Charles-Henri Filippi, chairman of the board of HSBC France. That appointment is pending approval at L’Oréal’s next shareholder meeting.