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Prestige Beauty Sales Lack Luster in France

High-end brands sold in perfumeries and department stores are feeling heightened competition from all fronts.

PARIS — As the curtain rises on Paris Fashion Week, and models’ hair and makeup become key components in setting a show’s tenor, the French prestige beauty market lacks luster, posting negative sales growth in perfumeries and department stores.

The segment’s revenues generated in such channels, including brick-and-mortar and online platforms, minus sales rung up from exclusive and private-label brands, declined 2 percent to 2.99 billion euros in 2018, according to The NPD Group.

The country’s prestige beauty market, which last year had the weakest performance in Europe, has struggled for a while. It had a 1 percent sales dip in 2017 and a 2 percent decrease in 2016.

That’s due to competition in France — as in most markets — which has become rife with brands increasingly focusing on their own e-commerce sites and freestanding stores. Chanel and Dior, for instance, are more frequently going direct-to-consumer through their own boutiques.

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“We also have a lot of pure players in the French market,” Mathilde Lion, Europe beauty industry expert at NPD, told WWD.

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Vertical specialty brands, such as Kiko Milano and NYX Professional Makeup, are chipping away at some traditional retailers’ market share as well.

“With the success of Kiko France since it entered the French market in 2010, leading beauty brands like Sephora, Les Bellista and Beauty Success rapidly created new low-cost product ranges,” said an analyst from Euromonitor International. “On the other hand, Yves Rocher invested in modernizing makeup tables and increased its limited-[edition] collections.”

Further, with fast-fashion labels such as Zara and Hennes & Mauritz expanding their own beauty product offerings, and the plethora of beauty and health stores opening, Lion said: “There’s growing competition from all sides.”

France’s socio-economic context hasn’t helped the prestige beauty business. “For sure, at the end of the year with the yellow [vests demonstrations], there definitely was an impact on some regions in France because it was more difficult for consumers to get into stores to make purchases,” said Lion.

In the breakdown of France’s prestige beauty product segment, skin care was the strongest seller in perfumeries and department stores in 2018, albeit still posting a 1 percent sales drop, to 547.4 million euros, according to NPD.

Fragrance registered sales down 2 percent to 2.01 billion euros, and makeup revenues softened 4 percent to 440.3 million euros, NPD numbers show.

That said, some categories still saw growth. “Especially the men’s fragrances — the eau de parfum [and perfume versions], so higher concentrations,” said Lion, adding that though the trend toward stronger scents has been present for the past five years, “today it’s really the main growth driver in terms of segments within the French market.”

Dior's Sauvage eau de parfum
Dior’s Sauvage eau de parfum. Courtesy Photo

Last year some major brands introduced powerful perfumes, such as the parfum for Bleu de Chanel and the eau de parfum for Dior’s Sauvage.

Bleu de Chanel's parfum
Bleu de Chanel’s eau de parfum. Courtesy Photo

“In skin care, we have also strong growth from lotions and tonics,” said Lion, adding that’s linked to a back-to-basics trend. “We don’t know who is purchasing [them], but based on the types of products [bought], it’s maybe an effect of the global shoppers, especially Asian shoppers.

“And then we have very small categories growing, such as prestige hair care,” she added. “But on the contrary, we have the big pieces, women’s and men’s eau de toilettes, the less concentrated fragrances that are declining the most and really represent most of the losses in the market.”

Lion noted that after two years of gains in lip makeup sales, especially for color and, last year, gloss, both categories’ revenues were down in 2018. “It’s a step back, a reversal of trends after very strong growth,” she said.

Yet another element generating strong prestige beauty sales in France was e-tailing. Linked to department stores and perfumeries, for instance, the channel’s sales gained 16 percent and made up 8 percent of the category’s revenues last year, according to NPD.

“It represents 1 point of growth for the total market, because without that, brick-and-mortar would be down 3 percent,” said Lion. “So the impact is huge, but it’s not additional sales. It’s more displaced sales than anything else.”

“The potential for selling beauty products through Internet retailing [in France] remains important because this channel has not reached maturity and is tiny compared to online retailing for [beauty] products in the U.S. and U.K.,” said the Euromonitor analyst.

There is no one tracker of all sales data linked to the French beauty market, which is very segmented, so a conclusive snapshot of the overall industry is unavailable. Still, experts agree the country’s mass-market beauty sales are in the doldrums, too.

Euromonitor data shows mass beauty and personal care products’ revenues in 2018 reached 6.85 billion euros, up just 0.7 percent on-year.

According to Kantar Worldpanel, France’s hygiene-beauty segment’s sales were down 0.2 percent last year, versus a 0.7 percent decline in 2017.

The country’s weak prestige beauty sector was trailed by the U.K.’s, which was negatively impacted by numerous phenomena, including Brexit concerns, store closures and a sharp slowdown in makeup sales.

In 2019, more of the same can be expected for France. “We do not see a positive market for the next year,” said Lion, referring again to the prestige beauty category, “because competition will continue.”