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Fashion, Beauty and Business
Six Degrees of Separation
1. The Economy2. Fashion as Business3. Beauty World
“Fashion is not necessarily about labels. It’s not about brands. It’s
something that comes from within you.”
Ralph Lauren
Fashion Defined
Fashion applies to many things, from apparel to furniture, from watches to foot ware.
“ In economic terms fashion is the premium people will pay over necessity costs for a product.”
Elliot Morss
Fashion Defined
Fashion is a visual and material system of symbols and meanings that extends to all things produced by people.These artifacts are suspended in what we call culture, so that changes to one family of objects can have an impact on other types.” Estelle Ellis
Fashion Defined
The U.S. Economy SlowlyRecovers
Gross Domestic Product Update
• 2014 First Quarter -2.1%• 2014 Second Quarter +4.0%
• Consumer Confidence back to 2007 (Pre-recession) levels
The U.S. Economy
Latest Unemployment Figures:
July 2014 6.2%
Average US Income Lower then 2002
• “Average” US Household Income– June 2014 $53.9K– June 2009 $55.6K (adj for
inflation)
– June 2014 is actually lower than 2000 (adj for inflation)
Wealth Inequality
“The 85 richest people in the world have as much wealth as the 3.5 billion poorest people in the world.”
The U.S. Economy
More on the “Haves” and “Have Not's”
90% of the increase in consumption between 2009 and 2012 was generated by the top 20% of households.
The Global Picture: Demographics
World Population2011: 7 Billion2050: 9 Billion
Growth where?Africa and AsiaContraction where?Europe, Japan, South Korea
GlobalWorld PopulationLargest growth in poorest countries,
straining economies and the environment.
Within the top 10 most populous countries in 2050: Russia and Japan will be replaced by Ethiopia and Congo.
GlobalWorld PopulationAging Populations especially in the
developed worldWorking Adults : Retired
Adults2010 9 : 12050 4 : 1
Impact?
The Global Economy
• European Union economy still struggles to recover from recession
The Global Economy
China• Already the world’s largest
population, will become the world’s largest economy
The Global Economy
China, cont.• Educational developments leading
to the world’s center of research.
The Global EconomyU.S. Competitiveness
For decades, the U.S. led the world in the percentage of people 25-34 with college degrees.
In 2010, we had fallen to number 12 among the 36 developed nations.
NY Times, 8-7-10
The Global EconomyU.S. Competitiveness
“It is expected that the educational level of the younger generation of Americans will not approach their parents level of education.”
NY Times, 8-7-10
Consumer Confidence is Up
Areas expected to grow
Automobiles
Electronics
FashionWe Connect fashion 2014
Economic Indicators from the World of Fashion and Beauty
• Hemline Index
• Lipstick index
Four levels• The production of raw materials
namely fibers and textiles• The production of fashion goods by
designers, manufacturers, contractors and others
• Retail sales• Advertising and promotion
FashionThe Apparel Industry
Production in Global Textile and Apparel Industry
• EU, US, Japan and China Are the biggest markets for apparel, but production concentrated in China, India, Bangladesh, Vietnam and Turkey.
• Global fiber mix is 41% natural and 59% manmade.
• Global fabric trade is estimated at $74 billion in 2012
Global Market Overview
Consumption Hubs 60%
Production Hubs 60%
Global Apparel Market $1.7 Trillion Growth 5.8%
U.S. Apparel Market $203.4 Billion Growth 2.2% U.S. is largest market @21% of global value sales
We Connect Fashion 2014
Textiles and Apparel by the Numbers
Fashion by the Numbers
• Textiles and apparel remain one of the largest industries worldwide
• Approx. 75 million people are employed in the t&a industries worldwide.
• Approx. 4 million people employed textile and apparel in the U.S. but in value added jobs not production
Textiles and Apparel by the Numbers
The textile and apparel industries have been the gateway to industrialization for LICs, but that is changing.
Textiles and Apparel by the Numbers
• Sale of Women’sApparel in U.S. $11.1Bn
• Value per apparel garment $19
• Clothing Store sales in U.S. $183Bn
Textile and Apparel by the Numbers
In 2013 there were 19, 300 fashion designer jobs .
The median income for fashion designers was $62,610.
Apparel sales will increase by 2-4% over next 18 months.
Apparel will remain the largest category of ecommerce sales through 2017
Garments will sell at every price point from $1 - $100,000 per unit.
Textiles and Apparel Facts
Market Drivers• Apparel stores post 1.2% increase in sales
for 2013
• Luxury apparel store Saks 5th Ave. saw 5.3% increase in 1st quarter
• Neiman Marcus saw 3rd quarter profits rise by 13%
Fashion Trends
• Everything Denim• M-Commerce• Social retailing• Made in America• Plus SizesWe Connect Fashion 2014
Beauty and fashion are joined at the hip thanks to Coco Chanel and Christian Dior.
Today 10 out of the top 30 best selling fragrances in the world are designer licensed brands
Beauty by the Numbers• Beauty revenues Worldwide 204Bn
Up 1.9%
L’Oreal #1 at 23Bn
Up 2.3%
Unilever #2 at 16Bn
Down 0.3%
P & G #3 at 20Bn
Down 1.0%
Affecting the Beauty Terrain• Asia will surpass the U.S. and Europe in
GDP, military spending and technology development.
• Global migration will increase due to aging population.
• People ages 65 and older will outnumber the young.
• Gender identities continue to increase.• Male grooming will lead to 30% market
increase by 2030
Tuning Strategy in the Evolving Beauty Landscape
• Multitasking brands at forefront of product innovation.
• Consumers want convenience, clarity and cash from beauty brands.
• Devices and data next for beauty
Faster. Further. Freer.Faster Incurable do-ers
Further Passionate Ideas
Freer Multicultural Perspective Multicultural perspective.
Group Heritage
Give a woman the best product you can, market it in the perfect bottle, beautiful in its simplicity yet impeccable in taste and you will witness the birth of a business the size of which the world has never known woman the best product ive a woman the best product you can, market it in the perfect bottle, beautiful in its simplicity yet impeccable in taste, ask a reasonable price for it, and you will witness the birth of a business the size of which the world has never seen.
1904 | Francois Coty, the Founder of Modern Perfume
Today$4.6 billion net sales 12,000 people 30 subsidiaries 91 markets worldwide30 subsidi Billion net salesSales x2 in 5 years
3 Yr. Objective $ 4.7 billion people30 subsidiaries/JV91 markets worldwide
3 YR Objective$4.2 BillionObjective by 2012
Leader in Fragrance
No. 2Our Position in Fragrance Worldwide
No.12o. 12No.
11
Our Position in the Global Beauty Industry
Leader in Cosmetics
No. 5Our position in US Cosmetics
Building Brands
+ ++27%2727%
Geographic Profile
5 R&D UnitsGranollers (SP) / Monaco / Morris Plains (US) / Hollywood (US) / Arizona (US)
6 Production UnitsAshford (UK) / Granollers (SP) / Chartre (FR) / Monaco / Sanford (US) / Hollywood (US) / Arizona (US) / China
R&D / Production
Business by Region & Segment
Portfolio – Fragranceul
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Portfolio – Skin & Bodyph
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Best in Class
Best In-Class CreativeAnnie Leibovitz, Craig McDean, Bruce Weber…
Impactful In-Store ExecutionHigh visibility
Packaging ExcellenceInnovative approach
DAVIDOFF Cool WaterFeaturing: Fresh, watery and crisp ingredients that started a new male fragrance category
NEW MEDIA TO TARGET RELEVANT AUDIENCE
Internet, Facebook, Twitter, Iphone…
Confidential
Best in Class
New Media to Target Relevant Audience
Long Term Commitment and Deep Partnership
To 2012 and beyond
Depth of expertise and experience.
• Focus on brand building and smooth execution• Depth of Expertise and Experience• Persistent Innovation from product to process• Deep commitment to partnerships and collaborative
relationships
Focus on brand building and smooth executions.
Persistent innovation from product to process.
Deep commitment to partners & collaborative relationships.
The Strength of a Coty Brand
Where is Coty Going?
• New Corporate Structure• New Marketing Strategy • New Brands
What’s Happening in Beauty?
• What happened to the” Lipstick Index” in 2009?
According to Leonard Lauder Nail Polish became the new Lipstick