Beauty & cosmetics round up for Q4 2023

The fourth quarter of 2023 was the first in which the beauty industry appeared to move into rocky territory. However, disappointing financials and a variety of legal troubles were offset by notable leadership changes and promising funding rounds that provided evidence of a dynamic industry, despite the current turbulence of the environment.

Executive hires and leadership shifts

Big players in the industry used the last quarter of the year to rejig their leadership teams, particularly when it came to the position of chief executive officers. Avon promoted its chief marketing officer, Kristof Neirynck, to the role, while Walgreens Boots Alliance (WBA) nabbed Medco’s CEO for Accredo, Tim Wentworth, to take on the helm. Olaplex also switched CEOs, appointing Amanda Baldwin, who is set to join the company from early 2024.

There were also shifts in the financial department. Ulta Beauty’s senior vice president of finance, Paula Oyibo, was promoted to chief financial officer, the same role that will be taken on by Fernando Fernandez at Unilever, where he currently resides as president of beauty and wellbeing. Revolution Beauty also made the move to replace its CFO, Elizabeth Lake, who stepped down and handed the position to Neil Catto, a Boohoo-backed executive.

Further changes had been made in relation to many companies’ efforts to bolster digitalisation. Coty, for example, named former Google and Meta exec, Pierric Duithot, chief digital officer, while WBA announced Neal Sample to be its new executive vice president and chief information officer.

Legal and financial troubles brewing

Despite the beauty industry enjoying a fairly stable few years, seemingly steering clear of the turbulent fashion market, this quarter it appeared that things could be taking a turn. For some, this was evidenced in lacklustre financials. Estée Lauder, for example, reported a 10 percent drop in sales for the first quarter of the financial year due to “external headwinds”. P&G, on the other hand, looked to tackle its own monetary issues through the launch of a portfolio restructuring, as well as a writedown of its Gillette business. A more extreme approach could be seen at Natura &Co., which opted to sell The Body Shop in a 207 million pound deal, after it reported a 12.5 percent drop in the retailer’s revenue for the second quarter of the year. MAV Beauty Brands also seeked aid from elsewhere, looking to Nexus Capital Management to acquire all of its assets after it filed for proceedings under the Companies’ Creditors Arrangement Act.

Struggles also seemed to arise from external parties. At THG, activist shareholder Kelso continued its campaign to break-up the firm’s subsidiaries amid reports of “operational headwings” and lowered profit outlooks. In contrast, Revolution Beauty was reported to be seeking legal action against one of its founders, an ordeal that was eventually settled in December when the company agreed to go ahead with ex gratia payments linked to the sale of Medichem.

Other legal issues came in the form of environmental concerns, particularly at Unilever, which became the subject of an investigation by a UK watchdog into alleged greenwashing. The Body Shop, on the other hand, took up its own concern surrounding animal testing with the launch of a campaign calling on the UK government to halt the “silent introduction” of the practice in the cosmetics industry.

Expansions and fundings

It wasn’t all ‘doom and gloom’, however. Some secured fundings to help with growth, including The 7 Virtues, which received investment from Unilever Ventures, and Nursem, which launched its own crowdfunding campaign back in October and has since overfunded beyond its initial goal of 600,000 pounds. Australian haircare brand Straand also snapped up funding totalling four million Australian dollars – another led by Unilever Ventures – just weeks after it launched into the UK market.

It appeared that this region was particularly lucrative for the beauty industry, too. Sephora announced preparations to open its first Northern England store in 2024, set to launch in Manchester, while Prai Beauty revealed it would be stepping into Waitrose after successfully launching earlier in the year with other partnered retailers. Others were growing new specialised concepts. Boots, for example, revealed its first ‘Boots Beauty’ storenew premium and professional haircare category to its stores to further strengthen its beauty offering. Lush, meanwhile, also stepped into new realms, opening its first standalone hairdressing salon in Brighton as a continuation of its experiments with retail concepts. The company committed a further 10.6 million pounds to its retail network, which largely went towards a slew of new store openings across the region.