BOLOGNA, Italy — After nearly a decade of balance sheets squeezed by highly unfavorable currency translations, Italy, along with the rest of Europe, is breathing more easily, thanks to the current devaluation of what was once termed “the super euro.”
That was evident during a series of interviews with attendees and exhibitors at the Cosmoprof trade show that ran from March 19 to 23 here, as well as with key beauty industry players in Milan and fragrance exhibitors at that city’s Esxence and Unscent fine fragrance shows.
This story first appeared in the April 3, 2015 issue of WWD. Subscribe Today.
Whether in corporate showrooms and offices, on selling floors or in the cavernous pavilions of the Bologna fairground, there was talk of expanding, adding factories, investing in licenses, opening stores and cranking the export machine to a higher pitch.
A perceptible sense of confidence was beginning to emerge in late March, which has become beauty time in Italy, thanks to the confluence of industry events.
“Europe is back,” declared Dario Ferrari, founder and president of Intercos, speaking at company headquarters in Agrate Brianza, Italy. “We do have an incredible opportunity because of the [strength of the] dollar, [dropping price of] oil, because we are finally doing what we should have been doing for the last five years — quantitative easing.”
Speaking of the president of the European Central Bank, he said: “Mario Draghi is finally printing money and buying bonds. And so the first two, three months of this year — wow, everybody is making money. Everybody is more optimistic.”
Roberto Martone, vice president of ITF and president of ICR, said he was adding 100,000 square feet to his 466,670-square-foot ICR factory in Lodi, Italy, by the end of 2016, and keeping an eye out for new fragrance licenses. In January, Spanish Gruppo Angelini completed its acquisition of ITF, having already bought a 60 percent stake in 2013.
While silent on the subject, another fragrance powerhouse, Euroitalia — which registered 2014 wholesale revenues of 679.3 million euros, or $902.8 million at average exchange — is rumored to be shopping for another major designer brand to add to its portfolio of licenses that includes Versace and Moschino.
Augusto Mazzolari, owner of Milan’s Mazzolari premier perfumery, said he aims to open a new unit in another choice section of the city “by the end of this year or next year,” working with one of his daughters.
Noting business this year was off to a solid start, Mazzolari said in addition to his long-standing Milanese clientele, a steady stream of Middle Eastern customers were now outnumbering the Russian and Chinese visitors at his store.
“People want quality, they want experience, they want to feel good inside a store, with service on a silver platter,” he said.
La Rinascente is at work on a new flagship in Rome, slated to open in February 2017. The existing Milan flagship in Piazza del Duomo closed 2014 with a “very positive” performance in beauty sales, up 7.5 percent on-year, according to Cinzia Baldelli, La Rinascente’s head of home, media and travel, beauty and children’s wear. And that’s despite the floor having lost 2,222 square feet of selling space to watches and jewelry.
Exports have been driving this newfound optimism. In 2014, sales abroad were up 4.9 percent over 2013, comprising 35.6 percent of total Italian cosmetics industry revenues of 9.36 billion euros, or $12.4 billion at average exchange for the year, according to Cosmetica Italia.
Fabio Rossello, president of the Italian cosmetics industry trade association, tied the fate of the Italian beauty industry to the task of retooling the Cosmoprof trade show. As far as he is concerned, the fair needs to ignite exports.
For companies, “there needs to be a minimum return on investment in terms of capability to export,” Rossello said. “Each company that comes here comes not for the internal market, but for the exports.”
In all, 248,000 visitors attended Cosmoprof this year, a 20 percent jump over 2014. Of that, 79,000 people came from outside Italy, representing 30 percent more than the prior year.
Seventy percent of Cosmoprof’s 2,493 exhibitors were foreign, with many of them presenting their products in the fair’s 27 country pavilions.
While show organizers have gone to great lengths recently to add features such as panel discussions, seminars and expanded visits by retailers, some industry leaders maintain that more needs to be done in renewing Cosmoprof’s purpose. Fabio Franchina, president of hair care and coloring company Framesi, said: “We need to work on the identity of the event for the new millennium.”
“It’s a little bit more geared toward the salon professional sector, [whereas] I’m a retailer and looking for brands,” said Greg Tappan, senior buyer for skin care at HSN, who was returning to the show after an eight-year absence. “They’re looking for a distributor…and find out I’m a retailer and are not as interested.”
Cosmoprof’s packaging arm Cosmopack was making a strong push, and the nail pavilion was easily the liveliest part of the fair — mobbed to the tune of amped up rock music.
L’Oréal made a startling comeback in Cosmoprof’s main central hall. The French beauty giant returned with all of its professional product brands, a hairstyling competition in conjunction with Vogue and a showcase of its Salon Emotion concept that is meant to help the growth of Europe’s hairdressing industry. It involves three main steps, including training and raising awareness of services; personalized advice and guidance to modernize salons, and simplified financing.
At Cosmoprof, L’Oréal was showcasing “the perfect journey” for people in salons — including the welcome, diagnosis and back-bar experiences. In Italy, the company inked a partnership with Samsung for hyper-creative, multidimensional digital components. These include a flat screen in salon windows, which functions as an interactive touch point for the consumer. Connected with an application, the screen allows people to book appointments, see products available at the salon and what looks it can create, for instance.
L’Oréal was not the only one thinking about the future. Intercos recently opened an office in Culver City, Calif., and an innovation center in Korea, said Ferrari in Agrate Brianza.
“We are in the middle of this big change….We identify more than 130 emerging brands [that are] very successful globally, but [in the West Coast of the U.S. alone] you have 35,” he said. “And they are really creating some problems for the big guys, which are suddenly too slow.”
Ferrari also singled out Koreans as new market leaders. “The game is speed. What do the Koreans do very well?” Ferrari continued. “They are fast, and at the same time, they have a lot of creativity and they work on concept.”
“The Korean wave is really, really big right now,” agreed Anita Yuen, director of beauty at Harvey Nichols’ beauty division in Hong Kong. She attributed the success of Korean beauty products to their slick public relations links to popular culture, such as Psy, the singer who put “Gangnam Style” on the map.
Myun W. Lee, a professor of ergonomics in Seoul, experienced an epiphany when Koreans were shunned from trade-show exhibition halls because they had the reputation of being “copycats.”
“Money made by copying things doesn’t get any respect,” he said at his Cosmoprof booth. “We need to contribute.”
Lee’s contribution was the creation of four innovative hair-related machines, the most recent of which is the patented WinkMagic for eyelash extensions, applying lashes with 0.1-millimeter precision.
“It’s our turn to let other people copy us,” Lee said.
Korean brand It’s Skin was making its debut at the trade show and seeking to boost its European distribution, according to Cheol-Woong Lee, a member of the company’s global business development.
The skin-care company with 700 stockkeeping units retails in freestanding stores, shops-in-shop and travel retail.
Another Korean label seeking increased European distribution was Ami Cosmetic, which has five skin-care lines. The company was trying to push its PureHeal’s brand in pharmacies, said Sunny Lee, assistant manager in the firm’s overseas business division.
Hanwoong was featuring its masks to be used in three-step treatment processes for different parts of the face. Jung-Yeon Lee, deputy general manager of the company’s sales and marketing team, explained Hanwoong primarily manufactures private-label masks.
HSN’s Tappan highlighted another trend he had detected: mesotherapy, typically a medical procedure practiced by doctors and trained beauticians, which was being offered in home-use versions.
“They make tiny little injections, and it’s hyaluronic acid and multivitamin concoctions, and they inject it into the skin,” he explained. “The idea is they’re stimulating the fibroblast to produce collagen. But it’s different from dermal fillers, where they’re filling a wrinkle. Everyone’s trying to get this deeper-penetration story in skin care.”
One professional brand, called Fusion Mesotherapy, is produced by Spain-based Oxynergy Paris. Its treatment, often used in sports medicine, consists of injecting a cocktail of 70 active ingredients and vitamins into the mesodermis, located between the dermis and the epidermis.
“It’s skin rejuvenation,” said Raphael Duérinck, director of Oxynergy, which is distributed primarily to doctors’ offices in Europe, Russia, the Middle East and U.S. The brand sells one million treatments a year, which can cost $100 to $150 each, and a half million vials of preparation, which go for 10 euros, or $10.70 at current exchange.
The palpable presence of California labels at Cosmoprof underscored Ferrari of Intercos’ assessment of the West Coast as a new hot spot.
Among the Golden State brands was Emani, an eight-year-old wholly vegan beauty company whose products are sold in upscale drugstores, spas and through home shopping in 13 countries.
“I wanted to create a makeup range that is an extension of your skin care,” said Michelle Doan, founder and creator of the brand. She also sits on the board of the California Trade Alliance.
“I think California really does embody a different state of mind and a different state of beauty,” she said. “When we come to the fair, we want to raise the awareness of what we do. It would be nice to get new distributors, but we really want to bring green cosmetics to the forefront.”
Most California brands hoped to expand their European retail reach while at Cosmoprof. Free Your Mane, a prestige line of health and beauty products positioned to celebrate the beauty of diversity, was looking for distribution in Germany and the U.K.
After hair care, the Los Angeles-based brand was launching its body-care line and gearing up to premiere a bathing range in Anthropologie’s upcoming expanded beauty concept. The dozen sku’s will first be introduced to the retailer’s top five locations before rolling out in all of its stores.
“The whole concept of the line is bringing bathing rituals from the four corners of the world,” said Israel Segal, founder of Nola Industries, the parent of Free Your Mane. “It will be a very holistic experience” and include items such as tea, incense and bath salts.
La Femme Cosmetics, of El Monte, Calif., was at Cosmoprof for the first time and searching for new European clients, as well.
“Our product lines are geared toward professional makeup artists,” said Peter Yang, owner of the company and also its resident chemist. He said most of his customers, including Disney, are part of California’s entertainment industry and interested in La Femme’s blushes, lip stain and semipermanent lip liner because of the products’ lasting, high-saturation intensity, which is important on camera. La Femme also offers refills.
“We’re not really in Europe yet, which is why we are at the show,” said Fernando Fischbach, vice president of sales for California Mango, a professional salon vegan hand and body care brand with all of its products boasting a mango scent.
Buyers from around the world were certainly on the prowl. Rekha Chaudhari, spa and wellness expert for JCKRC in India, was at Cosmoprof as part of its ongoing retailers’ program. She distributes luxury brands in the country’s spas and educates their staff.
Chaudhari noted salons in India are growing quickly, with a 25 percent increase in the past three years, and both the men’s and antiaging categories are on the rise.
“This was not in the Indian culture at all, but now it has developed very well,” she said.
Other segments are gaining steam in Mexico.
“A lot of women are changing their lifestyle and turning to dermo-cosmetic brands” that are supported by medical research, said Enrique Arturo Lerma Cordero, senior buyer for dermatologic pharmacies and spa at Liverpool, where bestsellers include Vichy, La Roche-Posay and Avène.
The retailer’s top seller in masstige is NYX, added Christian Cuadra Estrada, senior buyer personal care at Liverpool.
For Group Uniderma, banner brands included Dr. Murad, DDF and Tweezerman.
“Sun protection is very big in Mexico,” said Samy Saadia, director general of Uniderma.
Like elsewhere, Sephora is on a growth track in Mexico, according to David Morán, marketing and merchandising director at Sephora Mexico. He said within five years or less the retailer would like to have 25 stores. There are now 10 units operating, with six of them in Mexico City. Another unit is now being opened in Maya Riviera.
At Sephora Mexico, about 60 percent of business is rung up by makeup, 25 percent skin care and 15 percent fragrance. In color cosmetics, best-selling brands include the Sephora private label, Urban Decay, Make Up For Ever and Benefit. For skin care, Peter Thomas Roth, Dr. Murad and Dr. Perricone figure among top sellers.
Back in Italy, the current beauty renaissance is largely driven by the spurring of exports with a massive “Made in Italy” campaign, and the stabilization of the domestic market.
At Cosmoprof, Davide Bollati, founder of the Davines and Comfort Zone professional brands, was showcasing his newest range, Essential Haircare. Composed of nine product families, it culls ingredients from around Italy, working with small-scale farmers in a deal with the country’s Slow Food Foundation for Biodiversity.
In Italy, “there are as many as 400 [small-scale farms], but we picked only the ones that have some sense in the beauty industry,” Bollati said. “It’s not new that the beauty industry takes plants, but here the selection has been done, and everything has been done, under the principle that biodiversity is increasing the richness of the planet.”
In Milan, a timid but growing sense of confidence is given life by the coming of the World Expo, which is expected to attract 20 million people to the city between May and October. The Milanese are betting this will be a boon for business: Collistar, for instance — Italy’s number-one makeup and treatment brand in the selective market for 12 years running — is creating a special welcome campaign for visitors in English, Russian and Chinese.
As it holds on to the pole position in difficult economic conditions, the firm has managed to increase its share of exports to 40 percent of sales.
“Even in the worst moments, beauty had an appeal. We hope to get to the levels of a few years ago,” said Paolo Bevegni, the company’s international director, referring to the domestic market.
Said the firm’s chief executive officer Daniela Sacerdote: “It seems that a better period is beginning; I’m optimistic, and I think we can do better.”