Margaret Mitchell

The Estée Lauder Companies Inc.: contrasting quarterly call with a double (top-/bottom-line) beat for Q1 but lowering guidance for the rest of the year on the back of expected continuous challenges in China/ Travel Retail Stock lost 11% (!) today (and ~65% since its dec 2021 peak) Rare to see such a correction on the back of such a result & in a context the stock declined already by 2/3 If the management expects 2024 to be the transition year, the financial community does not seem to be convinced at this stage... In the details: Estee Lauder Q1 FY24 results summary (Q3 result - FY Jul-June) • NR: $ 3.94bn • OSG: 6% • GM%: 71.9%; +280 bps vs Q1 FY23 • Adj. Operating Income%: 14.1%; +842 bps vs Q1 FY 23 Results by Product Category: • Skincare: $ 2,060m NR; OSG: 9% • Make-up: $ 1,136m NR; OSG: 4% • Fragrance: $ 575m NR; OSG: 1% • Hair Care: $ 143m NR; OSG: -4% Results by Regions: • The Americas: $ 1,117m NR; OSG: +1% • Europe, the Middle East & Africa: $1,647m; OSG: 12% • Asia/Pacific: $1,176m; OSG: 3% Analyst Consensus: Beats EPS and revenue estimates Q3 2024 FY24 guidance: Lowered due to continued challenges in China • Net sales: decline as much as 3% vs the prior forecast for a range of down 1% to up 1% o OSG: decrease between 1-2% • Adjusted diluted net earnings per common share: expected to decrease between 36% and 33% on a constant currency basis 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg L'Oréal Coty Beiersdorf Unilever Procter & Gamble E.L.F. BEAUTY Nestlé https://lnkd.in/dNTUMwqZ

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Another interesting No Stupid Questions asked by Rachel Brown at Beauty Independent regarding founder's decisions to close their brands. Everyone reads and hears about the success stories but sadly, there are many more failures than successes. Some key lessons learned by the founders in the article include: * Market Realities: Even great products may not succeed if market conditions are unfavorable or if growth becomes unsustainable. * Emotional Strain: Closing a brand is a deeply emotional process that involves reconciling personal attachment with business realities. * Importance of Pivoting: Learning to pivot and recognize when to step away is crucial for long-term entrepreneurial success. The founders in the article cited several specific reasons for brand failure: * High Costs and Lack of Profitability: Many struggled with high operational and production costs, making profitability difficult. Having the right gross margin profile is key to long term profitability. * Market Saturation: Increased competition in the beauty space made it challenging to stand out. Launching a uniquely differentiated and positioned brand is critical in today's market. * Distribution Challenges: Some faced issues with scaling distribution, especially as they expanded into retail. Supporting a retail partner can be capital intensive and still requires the brand to generate demand. Retailers don't build brands, brands build brands. * Investor Pressures: External financial pressures from investors added stress when growth slowed. Choosing your investment partner is critical. At True Beauty Ventures, we believe are unique understanding and experience in the beauty industry mitigates some of this risk, not to mention, the need to be patient and not expect unrealistic growth from a small undercapitalized brand. Cristina Nuñez #beautyinvesting

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Burberry’s recent bumps have sparked takeover rumours, including potential interest from Moncler amongst others. With its market capitalisation halved, Burberry is a more accessible target. The company’s attempt to elevate its brand has not delivered leading to a projected 20% drop in revenue this year and diminishing profits. New CEO Josh Schulman is expected to shift towards more affordable, classic styles, a move that could stabilise sales. Acquiring Burberry at an estimated £5bn, including premium and debt, would demand significant growth assumptions to justify the investment, making it difficult to guarantee returns in today’s luxury market. Consequently, Burberry shareholders may not see a lucrative buyout offer in the near future. A Burberry takeover is not for the faint hearted https://on.ft.com/3CjXzEi | Financial Times | Camilla P. ___ #TheCPGGeek #IBMRetail #IBMConsumer #FMCG #ConsumerGoods #Retail 💙 Proud to be a #RethinkRetailTopExpert - RETHINK Retail #RethinkRetail 💙 Proud to be an #NRFRetailVoice - National Retail Federation #NRF

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I (Scaling Retail) was quoted in the Glossy members briefing this week for my take on luxury spending. As a global consultant for the last 12 years, I've been able to launch and scale brands all over the world- from Bahrain to Tanzania to China and Nepal. I've had a front row seat to how global markets shift and how consumers are thinking with a global lens. So whats changed? Today, consumers have the privilege of reallocating their spend to the most advantageous countries and markets. With the economic issues facing the United States (consumer debt crises, etc.), there's a unique opportunity to capture International markets today. I have one opening right now for the right founder. DM me if you are interested in launching or scaling your business. Here's the quote! “Luxury arbitrage has always been at play with Chinese consumers,” said Syama Bunten, founder and chief strategist at Scaling Retail consultancy. “While some speculate that spending domestically [in China] has gone down due to a government crackdown on luxury spending, I believe shopping is simply ‘relocating’ to where the most advantageous prices are.” According to Bunten, brands with a strong presence in China “shouldn’t pull out and be scared by this downturn,” because Chinese consumers will be back as currencies stabilize and economic pricing increases. What’s more, they shouldn’t “make the mistake of increasing their footprint in Japan based on the current economic indicators.” Those who do will likely be faced with lower profit margins as consumer trends stabilize. “The boom days of spending are stabilizing,” she said. “Moving forward, evaluating global performance versus doing region-specific analysis will become an important factor as luxury brands start to tell a new narrative around global success and dominance.” https://lnkd.in/ggUr6J3b https://lnkd.in/gB7eJBpc

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Thank you for Carla Seipp and BeautyMatter for including me in this insightful article on the factors driving indie fragrance M&A deals. Here's a summary of the key takeaways: Four Factors Driving Indie Fragrance M&A Deals * Cultural Cachet: Successful indie fragrance brands have become cultural touchpoints, transcending mere perfumery. Examples include Le Labo's Santal 33, and Maison Francis Kurkdjian's Baccarat Rouge 540. * A Hero Scent for the Ages: Brands with a standout, timeless fragrance that drives business are particularly attractive to investors. Examples include Creed Aventus and The 7 Virtues Beauty Inc.'s Vanilla Woods. * Immersive Retail Concepts: Unique in-store experiences and stand-alone stores help build brand buzz. Frédéric Malle, Le Labo, and Byredo have all demonstrated prowess in this area. 7 Virtues recent launch of its Atelier in Halifax and The Maker's hotel in Upstate NY are further evidence of the importance. * Unique Branding Identity: Brands with a clear point of differentiation and the ability to engage customers repeatedly stand out. D.S. & Durga's surrealist campaigns and Vyrao's wellness-focused approach are prime examples. My insights can be summed up as follows: * Strategics are seeking indie brands with unique branding, innovative approaches, and strong consumer loyalty. * A hero product and immersive marketing tactics are key to attracting strategic attention. * The fragrance industry's sustained growth is fueling increased investor interest. * Successful brands need unparalleled storytelling abilities to build emotional connections with consumers. Cristina Nuñez True Beauty Ventures #beautyinvesting https://lnkd.in/ewhsiRnc

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With far more demand than supply, Hermès #Birkin bags flip economics on its head by having a resale value of ~2x the original sales price. Of course, that’s only if you can get one. Demand is so high that when a shipment of Birkins arrive to a store, they are “assigned to individual sales associates,” who must make a case for why their client “deserves a Birkin and get the store manager’s approval.” Yet another reason why I love the #fashion industry. https://lnkd.in/emtwPUnt

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Post 4/4 : Fashion’s “Perfect Chaos Storm” - Rebuilding Alignment and Cultural Relevance in Uncertain Times Title: Fashion’s “Perfect Chaos Storm”: Rebuilding Alignment and Cultural Relevance in Uncertain Times #Inflectionpoint #cataclysmicUpheaval #BOF or part #PerceptionGap Luxury today faces a “perfect chaos storm” of economic unpredictability, shifting values, and rising demands for cultural connection. Inspired by Ana Andjelic’s argument for a new cultural strategy and Bain & Co.’s call for performance improvement, this post underscores that bridging the perception gap is essential for navigating these shifts and restoring relevance. #LuxuryMarket #PerceptionGap #ConsumerAlignment Strategies to Reclaim Cultural Influence in a Complex Market 1. Addressing the Perception Gap as a Strategic Imperative: Many brands believe they’re aligned with consumers but may overlook deeper values like sustainability, inclusivity, and authenticity. Bridging this gap isn’t just about meeting changing tastes; it’s about restoring luxury’s soft power, as Andjelic suggests. 2. From Product-Centric to Consumer-Centric Models Luxury brands must pivot to consumer-centric models, using Design Thinking and virtual tools to test and refine concepts with real-time consumer feedback. Andjelic advocates this focus on cultural relevance over competition. 3. Bridging Economic Gaps with Cultural Relevance Brands like Miu Miu and Hermès succeed by blending authenticity with scarcity, delivering culturally meaningful identities. This aligns with Andjelic’s insight that luxury’s new power lies in lifestyle and values, not mere products. 4. Localized and Transparent Supply Chains Regional supply chain transparency can demonstrate commitment to values like fair wages and sustainability, connecting with values-driven consumers. 5. Harnessing the “Silver Spend” and Ethical Consumer Segments The often-overlooked 50+ demographic represents a key growth segment. Brands that connect luxury’s heritage with sustainability can reach these values-driven consumers. Conclusion: From Chaos to Opportunity The industry’s “Perfect Chaos Storm” offers an opportunity to recalibrate. Brands that close the perception gap and reclaim cultural relevance will be positioned to thrive. Andjelic’s insights underscore that, in luxury, success depends on deep cultural alignment and consumer resonance. This series underscores that to transform from mere survivors of this storm to leaders, brands must rethink traditional assumptions, focusing on authentic connections and adaptive strategies. #LuxuryMarket #CulturalRelevance #FashionTrends #ChinaLuxury #AnaAndjelic #SoftPower

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It was brilliant to do a fireside chat at the FT Future of Retail event last week in London. Many thanks to Laura Onita for the invite! Laura and I covered a lot of ground, including retail leadership qualities, international expansion strategies and the challenges facing retailers today. Too much to write about here but here’s two takeaways to give a flavour for the conversation: Does the “global consumer” actually exist? More yes than no 😊 While each market is shaped by different cultural, economic, and political forces, I firmly believe that people around the world are more alike than they are different. They have similar hopes, fears and dreams and when they are shopping, everyone wants quality products at affordable prices for their families. It’s our job as retailers to deliver on that wherever we operate. Will AI reinvent retail? It will certainly transform it! Ken Murphy, Tesco’s CEO, commented that the effect will be “seismic.” While we’re already seeing many advancements, it’s clear to me that we’re only at the beginning of this journey and keeping the customer at the heart of development will be ever more critical. Customers want personalisation, simplicity and ease – and AI can help transform the delivery of that, BUT, they also want their data to be safe, for the ‘help’ to never cross into creepiness and to have options about how their data is used. I love the question Walmart asked when developing new capabilities “would you be happy if this was you?” - such a simple way to think about it. My overall takeaway from the day and the future of retail? No other industry reaches as many people globally as retail does. It’s a privilege to earn the trust of millions of customers, to be part of their everyday lives, and to contribute to their celebrations and milestones. This industry continues to be dynamic, impactful, and full of opportunities. I’m always inspired by incredible conversations about retail and it’s a reminder of the remarkable role it plays in the world! #leadership #retail #AI #futureofretail #FTRetail

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Great Article Read. In alignment with True Beauty Ventures + Christina's perspective, I agree with the notion that consumers are increasingly demanding more from their beauty products. According to data projections on consumer spending in the beauty industry for 2024, there is a notable trend of consumers expecting greater value from their purchases, even as they strive to be more mindful of their expenditure habits. In light of this evolving landscape, there is a unique opportunity to cater to consumers who seek premium products that not only meet their beauty needs but also provide added value and efficiency At TwoFold Wellness our core mission revolves around addressing the needs of modern women who prioritize self-care and are investing in themselves, yet may face time constraints in their daily routines. As we strive to serve this discerning demographic, our focus is on exceeding expectations by offering beauty products that go above and beyond “traditional” standards. Through innovative solutions and a commitment to enhancing the self-care experience, we are dedicated to providing a range of products that resonate with individuals seeking quality, efficacy, and convenience in their beauty routines. We hope this trend is one we can promote and see other brands carry through! #beauty #wellness #beautyindustry #wellnessindustry #selfcare #startup #raisingcapital #womenfounders

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The Path to Scaling Indie Beauty Brands: Retail Distribution Matters The beauty landscape continues to evolve, and the latest insights from WWD highlight the critical role of retail distribution in scaling indie beauty brands. Key takeaways include: * The Power of Multi-Channel Strategies: Retail giants like SEPHORA, Ulta Beauty, and Target remain key players, offering indie brands access to diverse audiences and credibility that drives growth. * The Rise of E-Commerce: Platforms like TikTok Shop and Amazon are reshaping how beauty brands engage with consumers, offering direct paths to purchase and amplifying discoverability. * Gen Z’s Influence: With their digital-first shopping habits and preference for value-driven brands, Gen Z is shaping how indie beauty brands develop their product offerings and retail strategies. When it comes to winning Gen Z, brands leveraging TikTok’s viral potential and seamlessly integrating with platforms like TikTok Shop are gaining significant ground. Yet, Ulta and Sephora continue to dominate in terms of prestige retail experiences that resonate with Gen Z’s desire for personalization and inclusivity. Retail partnerships are pivotal not just for visibility but for creating trust and accessibility—cornerstones of long-term success in today’s competitive market. Cristina Nuñez True Beauty Ventures #beautyinvesting https://lnkd.in/eQuiGj9B

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🌟 The Evolving Landscape of Luxury Beauty E-Commerce 🌟 As explored in Beauty Independent, luxury beauty brands are facing increased competition in the e-commerce space and a declining department store channel. Elana Drell-Szyfer, CEO of RéVive Skincare, notes that new online platforms like TikTok Shop and affiliate models are diverting traffic from traditional luxury e-tailers and department stores. With consolidation and larger players like Saks and Neimans stepping up, the dynamics are rapidly shifting. At True Beauty Ventures, we believe strongly in the DTC channel for luxury brands, offering control over brand experience and resilience against retail challenges. Given limited retail distribution and the high AOV, gross margin profile and LTV of a loyal consumer, DTC economics are most attractive for this product segment. Cristina Nuñez #beautyinvesting

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What’s Wrong with Beauty? As I write this, in the last quarter of 2024, it seems that the beauty industry is in the middle of a spectacular boom period. Here in the UK, stores like Sephora, Space NK and Boots are packed with customers, and brands like Sol de Janeiro and Drunk Elephant are reported to be enjoying exponential growth. But for every success - where the Board is cracking open the champagne - there are dozens of other Boards wringing their hands, and scratching their heads as they grapple with a landscape where success often feels arbitrary, driven less by product quality or innovation and more by social media mastery and the whims of Gen Z and Gen Alpha consumers. Just two recent examples - Morphe and Glossier, once both iconic - are now finding it hard, closing all their shops, and seem to have lost touch with what made them successful in the first place. Please take a couple of minutes to read my perspective on winners and losers in beauty and what to do if you want to be a winner. LUSH #aromazone #beauty #beautyindustry L’OCCITANE Group Aesop SEPHORA SpaceNK Apothecary #ethical #sustainable #genA #genZ #allkinds #soldejaneiro #drunkelephant

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The days of price-fueled growth in beauty appear to be shifting, according to a recent "No Stupid Questions" article by Rachel Brown at Beauty Independent. The article underscores key strategies for resilience as brands navigate a new market landscape, with insights that align well with Cristina Nuñez’s approach: * Value and Innovation Are Key: Consumers now expect innovation that justifies value beyond price. The opportunity is there for brands that continue to deliver quality and purpose. * Brand Authenticity and Loyalty Matter More Than Ever: As growth depends less on pricing, brands that maintain authenticity and foster deep consumer loyalty and community will stand out. * Prioritizing Financial Sustainability: A strong supply chain and clear financial planning are essential for brands to weather uncertain times and grow sustainably. A huge thanks to Rachel Brown for consistently posing thought-provoking questions and insights that guide us all forward. We are excited to see True Beauty Ventures drive brands in this direction! https://lnkd.in/e3HaBG4A

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I was quoted in this article on the FTC trying to block the merger between Tapestry and Capri. What I find interesting is that, like me, most of the other people quoted find the ruling incredulous. This includes an executive from a competitor brand, who admitted that while they should be happy about the attempt to block, they actually think the FTC is anachronistic and has no understanding of how the market works. I go further. I think the FTC has become a menace. It is attacking the companies that generate wealth and make the country stronger. It does so under the camouflage of 'protecting consumers' but, in reality, the only thing it's protecting in this instance is its own warped worldview. Thanks to WWD for including my thoughts alongside many other interesting musings... https://lnkd.in/e-qqm_z6 #retail #retailnews #luxury #handbags #FTC #competition

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Accessible Luxury: Let's talk about a trending retail term, thanks to Tapestry Capri Holdings Limited merger and rising luxury prices. 🛍️Accessible Luxury: The Tantalizing Yet Risky Middle Ground 👀 I've been closely watching the rise of "accessible luxury" - that lucrative sweet spot price range of $200-$800 where brands can offer quality and style without astronomical luxury price tags. With recent acquisitions like Tapestry's pursuit of Capri putting this category under scrutiny, it's clear accessible luxury is where brands want to play. However, there are valid concerns about getting stuck in this middle ground. ⚠️ The tricky positioning: While accessible luxury fills the gap between fast fashion and true luxury, it's also a precarious place to be. In tough economic times, consumers on a budget may trade down to fast fashion, while the highest luxury spenders rarely change habits. Those stretching to buy accessible luxury risk being the ones most impacted by financial constraints. 👛 Feeling the Pricing Pinch: Brands operating in this middle tier also have less flexibility on pricing often because the quality is still very high. 💡 Curation is Key: Brands can't just haphazardly release pricier items and expect them to work. Curating an intentional collection with a true luxury aesthetic is essential. Brands like STAUD have found success through dedicated bridal lines capturing the upscale audience. There are also a number of handbag lines doing really well in the accessible luxury space: Mansur Gavriel LITTLE LIFFNER and Cuyana are a few examples. 🚀 The middle ground is always risky, but the rewards of hitting that accessible luxury sweet spot could be massive for brands that navigate it successfully. While economic conditions will continually pressure this segment, its growth potential remains stellar for those making the right investments and tradeoffs. ❓What's your perspective on the accessible luxury opportunity and challenges? I'm always eager to discuss this fascinating space. Let me know your thoughts! This article by Madeleine Schulz for Vogue Business is a great read on the Accessible Luxury space.

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In New York today, checking out the Lux and retail scene, and reading the excellent Financial Times Special Report on Watches and Jewellery. Interested in this article, especially as I choose independent jewellers often - and I’m doing much of 5th today and will check out the Diamond Quarter: “Independent jewellers realise potential of physical stores” by Kate Youde. https://on.ft.com/4fpfDvB New openings by jewellery makers increased 30% last year, according to property group Savills and their Global Luxury Retail 2024 Outlook, responding to two trends in luxury retail: a return to physical and personal experiences and a shift from wholesale to retail seen over the last two decades or so. https://lnkd.in/eBJN7Crt ___ #NewYorkRetail #Luxury #BagCharm #JaneBirkin #DingleDangler #FTSpecialReport #RetailTherapy #TheCPGGeek #IBMRetail #IBMConsumer #FMCG #ConsumerGoods #Retail 💙 Proud to be a #RethinkRetailTopExpert - RETHINK Retail #RethinkRetail 💙 Proud to be an #NRFRetailVoice - National Retail Federation #NRF

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