October in review: China weakness caps cosmetics earnings, Unilever offloads Russian assets and European regulators accused of ban delays
In October, key cosmetics companies warned about ongoing weakness in China amid research suggesting consumers spend less on “affordable luxuries.” Coty predicted “slightly lower” growth in the short term, while Estée Lauder Companies already felt the impact in its latest quarter, vowing to turn the tide with a new CEO.
After months of intense pressure from campaigners and the Ukrainian government, Unilever offloaded its Russian business. Meanwhile, the UK promised to lower business rates for brick-and-mortar stores to “level the playing field” with online retailers.
In regulatory news, the European Chemicals Agency (ECHA) found cancer-causing chemicals in cosmetics that violated REACH regulations. France also proposed a ban on cannabidiol (CBD) in cosmetics, citing potential “reproductive toxicity.”
The European Commission (EC) told Personal Care Insights that it might start assessing “internal procedures” after an ombudsman investigation accused it of delaying the ban of products that may cause cancer, infertility and other harm to health, while the American Academy of Dermatology also issued a warning about top beauty trends on social that “may seem harmless …but could end up causing skin damage.”
Learn more about the significant stories last month that made headlines in the personal care and beauty sector.
October
Future of cosmetic enhancements is increasingly non-invasive, report finds
A report by the American Society of Plastic Surgeons (ASPS) found that non-invasive cosmetic procedures far outnumber surgical options, with the trend continuing to rise. ASPS analysis unveiled a 7% jump in minimally invasive procedures last year — compared to 5% for plastic surgeries. The rise of non-invasive treatments was attributed to more clients turning toward procedures like Botox and dermal fillers due to efficiency, lower cost and minimal recovery time.
CBD danger? France fights for EU ban while California and Thailand seek stiffer laws
Cosmetic procedures now outnumber surgical options.France proposed a ban on CBD in cosmetics, citing potential “reproductive toxicity.” The country wants it enforced across the EU but first, the Scientific Committee on Consumer Safety must find evidence that CBD and its cannabinoids harm health. Meanwhile, California introduced regulations to safeguard children and teens from the “dangerous” intoxicating effects of THC and Thailand drafted legislation to cut down on recreational use.
Spate sees consumers pulling away from eye makeup and toward lip and skin products
Spate’s September Makeup Trends report showed consumers turning away from eye products to focus on lip and skin makeup solutions with online interest in makeup across Google and TikTok dropping 7.7%. The machine intelligence platform told Personal Care Insights, “One of the biggest takeaways is the drop in interest in eye makeup products like eyeliner and eyeshadow, which is contributing to a general decline in the makeup category.”
Unilever sells Russian subsidiary responsible for personal care products for €520M
Unilever completed the sale of its Russian subsidiary to Arnest Group for €520 million (US$568.6 million). The subsidiary manufactured perfume, cosmetics and household products for the FMCG giant. Hein Schumacher, CEO of Unilever, said: “Over the past year, we have been carefully preparing the Unilever Russia business for a potential sale. This work has been very complex and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic.”
Cosmetics climate: Coty, LVMH and Ulta Beauty predict slower growth amid “headwinds”
The global beauty landscape struggled with weaker sales and many revised growth outlooks. Coty said the global beauty market is still solid but predicted “slightly lower” growth in the short term. LVMH reported a 2% drop in revenue for the first nine months of the year but achieved growth in perfume and cosmetics. Ulta Beauty acknowledged that competition is stiffer as it continues to vie for customers alongside beauty giants such as LVMH-owned Sephora.
EC may assess “internal procedures” amid claims it prioritizes business over human health
A European Ombudsman investigation accused the EC of delaying the ban of products that may cause cancer, infertility and other harm to health for nearly two decades. In response, the European Environmental Bureau (EEB) argued that the EC “prioritizes business interests over human and environmental health.” Personal Care Insights talked to the EEB and EC about how the delays occurred and how to remove the harmful products from shelves.
Unilever officially pulls out of Russia completely.
The American Academy of Dermatology named the Russian manicure, glass skin and at-home red light therapy as the top beauty trends on social media but also warned of potential health risks. Ahead of National Healthy Skin Month in November, board-certified dermatologists offered insights into the effectiveness and safety of trends that “may seem harmless or even beneficial [but] often don’t have any real science behind them and could end up causing skin damage or other health issues.”
Estée Lauder ends succession drama with new CEO amid demand drop and granddaughter’s departure
Estée Lauder Companies announced Stéphane de La Faverie would replace longtime CEO Fabrizio Freda in the new year, while William Lauder said he would step down as board chair. His cousin, Jane Lauder, was seen as a contender for the top job, but she announced her departure from daily operations days before quarterly earnings showed weakness in China, which affected the beauty giant and caused the stock to plunge further.
UK answers industry calls to lower retail business rates and promises to fight “online giants”
The UK promised to lower business rates for brick-and-mortar stores to “level the playing field” with online retailers. Finance minister Rachel Reeves said tax rates would be permanently reduced for retail, hospitality and leisure properties and funded by a higher multiplier for the most valuable properties, including distribution warehouses used by “online giants.” The announcement came after British retailers’ urged the government to cut business rates by 20%.
ECHA finds cancer-causing chemicals in cosmetics that violate REACH regulations
ECHA found that 6% of inspected cosmetic products contain dangerous substances to human and environmental health and are banned under persistent organic pollutants and REACH regulations. The pilot project by ECHA’s Enforcement Forum investigated 13 European Economic Area countries and checked approximately 4,500 cosmetic products for the presence of perfluorooctanoic acid, long-chain perfluorocarboxylic acids and cyclic siloxanes D4 and D5.
