News in Brief: L'Oreal, Coty and Physicians Formula
takeover, Coty launches its e-commerce strategy with a partnership
with HSN and analysts give Physicians Formula a positive outlook
for 2008.
Speculation over Nestle bid for L'Oreal L'Oreal share prices rose as much as 4.6 per cent, according to Bloomberg, due to speculation over a possible bid for the company by Nestle. The global food giant has just sold a 25 per cent stake in eye-care product manufacturer Alcon to Novartis, raising approximately $11bn for the company. The deal may lead to Novartis acquiring Nestle's remaining 52 per cent stake in Alcon between January 2010 and July 2011 for an estimated $28bn. As a result the company is better positioned to seek acquisitions, and this has fuelled speculation it may make a bid for L'Oreal - a company it has repeatedly referred to as a strategic asset. A spokesperson said: "If we believe an acquisition is strategically necessary, we will make it. If that should be a company that costs considerably more than we spend year in and year out for acquisitions here and there, clearly we do have the financial punch to make acquisitions" reported UK newspaper The Times. Currently Nestle holds an approximate 30 per cent stake in L'Oreal. Coty launches e-commerce strategy The US-based fragrance and beauty company has launched its e-commerce strategy through a partnership with HSN TV network and HSN.com. Partnerships will be entered into throughout the coming year to reach new consumers as part of the global strategy, explained Michele Scannavini, President of Coty Prestige. "Our new e-commerce strategy will provide a new avenue of retail and revenue for Coty," said Scannavini. Products from Coty's Lancaster brand will be the first to debut on HSN, including Lancaster 365 Cellular Elixir - an anti-aging serum that is to be launched this Spring. "Interactive retailing is an innovative endeavour that will deliver our Coty Prestige brands to consumers in a convenient and accessible new way," said Bern Beetz, CEO of Coty. Physician's Formula looking good for 2008, says analyst According to Citi Investment Research Analyst Wendy Nicholson Physicians Formula Holding reported impressive March sales growth despite comparison with a strong 2007. The company's March sales, as reported by AC Nielsen, grew 12.6 percent in comparison to 11.6 percent in March 2007. "With FACE (Physicians Formula) having just launched its new Organic Wear line of color cosmetics (supported by unprecedented levels of advertising), as well as numerous other new products, we believe that today's data represents the early signs of future market share gains and resulting dollar sales growth to come for FACE," said Nicholson. On March 10 the company announced its results for the year ending December 31 2007, reporting net sales of $11.5m. Although these results were higher than expected the company nevertheless predicted that performance in the coming year may suffer due to lower levels of consumer spending in the current economic climate.
