WWD.com/beauty-industry-news/financial/intercos-adapts-to-changing-world-6875569/
government-trade
government-trade

Intercos Adapts to a Changing World

Last year's uptick in sales was driven by numerous factors, including a change in business model following the most recent financial crisis.

AGRATE BRIANZA, Italy — Intercos SpA, the world’s premier cosmetics supplier, is going from strength to strength.

Last year, company sales grew almost 15 percent versus 2011. The uptick was driven by numerous factors, including Intercos having changed its business model following the most recent financial crisis, explained Dario Ferrari, the firm’s president.

Intercos has become more aggressive in growing its private-label activity, and increased its focus on pencils, skin care (a recent venture) and powder — the company’s number-one category.

The firm continues manufacturing treatment in a research-and-development facility in Switzerland and evolving its skin-care catalogue through a joint venture in Naples, Italy, called Vitalab that allows it to produce its own active ingredients.

Today, Intercos’ skin-care business annually generates about 50 million euros, or $64.1 million at current exchange, and the goal is for it to reach 100 million euros, or $128.2 million, by 2015, said Ferrari.


RELATED STORY: Beauty Retailers, Manufacturers Defy Italian Downturn >>

Meanwhile, overall business advances in Asia.

“The Chinese market is going to be fantastic — especially in the next three to five years,” he continued, adding skin care is already strong in that market where Intercos revenues gained 30 percent in 2012. “We still believe the United States is our biggest opportunity in terms of growth.”

With that among other factors in mind, Intercos has been reorganizing on a geographic basis. In the U.S., for instance, there will be a marketing group devoted to mass offerings, especially when it comes to delivery systems for items such as mascara and pencils.

“In the pencil category, we believe we have a lot of space for growth,” said Ferrari. “It was impossible for us to continue to grow [the mass-market business] from Italy.”

He explained there will be dedicated R&D in the U.S., as well. Intercos’ headquarters in that country is in Congers, N.Y., while it also has an office in New York City.

“We are going to staff the Congers group,” said Ferrari.

Meanwhile, Italy remains the center for design and high-end creative innovation.

In China — a country in which Intercos has four plants — the emphasis will mostly be on finished products.

“Now we add a pencil factory in Shanghai,” said Ferrari.

And on Monday, Intercos is set to start up production in Brazil, where the company will provide innovation locally and — at the same time — production capacity to multinational businesses.

Looking ahead, Ferrari expects Intercos to notch up 12 percent growth in 2013. But he said it’s key to monitor the market on a day-by-day basis. Whereas during the economic crisis in 2009 consumers still made purchases, allowing the world cosmetics business to gain 1 percent, Ferrari believes the situation could be worse these days.

“So you have to be able to be very aggressive with innovation, very aggressive from a cost and price [perspective] and of course, from a speed and cost [standpoint],” he said. “Today, we want to be innovative, but through being fast and cost-effective, and I think that is what customer needs are today.”

Ferrari’s philosophy was reflected in Intercos’ 2014-15 trend presentation, entitled Beauty Unlimited, which was staged starting in early March in the firm’s Agrate Brianza-based company headquarters. It was comprised of six main themes, including product collections, “dream” products, “star” products and raw materials. Altogether, there were 96 colors for the face, lips and eyes.

In a first, the company created in-house an 18-minute film that was meant to be inspirational and animate the trends.

Outlandish Metals, for all seasons, took a cue from metallic finishes and textures. Key colors here included chrome copper and metallic rose, and raw materials were reminiscent of liquid chrome and metallic iridescent pearls. An example was a metallic-foil effect using the company’s patented Prisma Shine technology.

For fall-winter, there were three different trends, including Beauty Hunt, with color schemes including pink and green. An emphasis was on reflections and camouflage — including a duo chrome “chameleon pearl” that can be dabbed on lips or cheeks for a multi-reflective effect.

Noire Lumiere in part gave a nod to mysterious lunar glows and earthly shadows. Its main hues were shades of black, lava red and white, and products were multi-textured. A raw material in this trend was gels with suspended red pigments, plus there were serums and powders billed to brighten and illuminate skin.

Queen for a Day had a modern Baroque take, with key colors like cobalt. Products were centered on velvets, gold detailing and jeweled effects. Among the star items was a solid fragrance with golden flecks.

A spring-summer trend was Delizioso, involving femininity, finishes and textures, and pairing vintage and modern elements. Tones here included bright pastels and stains, and a standout item was a three-in-one hair, brow and lash tint in bright, light colors.

Viva a Gata had a Brazilian vibe — with glitter, shine and gloss — and bright hues. It was meant to be about super-charged, succulent color, according to Intercos executives, who added the focus here was on bronzers. Some “inspirational products” included neon pigments.

Intercos also showcased an area called Revolution, which involved Prisma Shine technology for the face category, such as BB and CC products (whereas in the past it was primarily used in color cosmetics), for instance. And Gel-Metrics was comprised of elastomeric gels, said to memorize the shape of a person’s face and therefore conform to skin rather than sit on it.

Meanwhile, Intercos’ patented High Fidelity Pigment technology was in powders, foundations and concealers, purportedly for a seamless skin-tone match.