Transcript Plenary Session 1 - Rutgers Business School

Fashion, Beauty and
Business
Six Degrees of
Separation
1. The Economy
2. Fashion as Business
3. Beauty World
Fashion Defined
“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
The U.S. Economy Slowly
Recovers
Gross Domestic Product
Update
• 2014 First Quarter
• 2014 Second Quarter
-2.1%
+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
– June 2009
$53.9K
$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 Population
2011: 7 Billion
2050: 9 Billion
Growth where?
Africa and Asia
Contraction where?
Europe, Japan, South Korea
Global
World Population
Largest 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.
Global
World Population
Aging Populations especially in the
developed world
Working Adults : Retired Adults
2010
9:1
2050
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 Economy
U.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 Economy
U.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
Fashion
We Connect fashion 2014
Economic Indicators from the
World of Fashion and Beauty
• Hemline Index
• Lipstick index
Fashion
The Apparel Industry
•
•
•
•
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
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%
Textiles and Apparel by the
Numbers
Global Apparel Market
Growth 5.8%
U.S. Apparel Market
Growth 2.2%
$1.7 Trillion
$203.4 Billion
U.S. is largest market @21% of global value sales
We Connect Fashion 2014
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.
Textiles and Apparel Facts
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.
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 Sizes
We 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
Up 1.9%
L’Oreal #1 at
Up 2.3%
Unilever #2 at
Down 0.3%
P & G #3 at
Down 1.0%
204Bn
23Bn
16Bn
20Bn
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
1904
| Francois Coty,
the Founder
Modern Perfume
impeccable
in taste,
ask aofreasonable
price
for it, and you will witness the birth of a
business the size of which the world has
never seen.
Today
$4.6 billion net sales
12,000 people
30 subsidiaries
91 markets worldwide30 subsidi
Billion net sales
Sales x2 in 5 years
3 Yr. Objective
$ 4.7 billion people
30 subsidiaries/JV
91 markets worldwide
Leader in Fragrance
No. 2
Our Position in Fragrance Worldwide
No.12o.
12No. 11
Our Position in the Global Beauty Industry
Leader in Cosmetics
No. 5
Our position in US Cosmetics
Building Brands
+
++27%2
727%
Geographic Profile
R&D / Production
5 R&D Units
Granollers (SP) / Monaco / Morris Plains (US) / Hollywood (US) / Arizona (US)
6 Production Units
Ashford (UK) / Granollers (SP) / Chartre (FR) / Monaco / Sanford (US) / Hollywood (US) / Arizona (US) / China
Business by Region & Segment
ultra-prestige
prestige
mass
celebrity
Portfolio – Fragrance
Sally Hansen
Rimmel London
OPI
NYC/Astor
Portfolio – Cosmetics
TJoy
Lancaster
philosophy
Portfolio – Skin & Body
Best in Class
Best In-Class Creative
Annie Leibovitz, Craig
McDean, Bruce Weber…
Impactful In-Store
Execution
High visibility
Packaging Excellence
Innovative approach
DAVIDOFF Cool Water
Featuring: Fresh, watery and crisp
ingredients that started a new male
fragrance category
Best in Class
NEW MEDIA TO TARGET RELEVANT AUDIENCE
New Media to Target Relevant Audience
Internet, Facebook, Twitter, Iphone…
Confidential
Long Term Commitment and Deep Partnership
To 2012 and beyond
The Strength of a Coty Brand
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.
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