Cosmetics giant Estee Lauder says Australia leading the way on sales revival

Estee Lauder names Australia as one of the country’s in the world leading the revival in make-up and cosmetics sales.

Estee Lauder said the uplift in consumer demand was most evident at bricks and mortar stores, not exclusively online. Picture: Andrea Laube

Global cosmetics brand Estee Lauder has highlighted a recent revival of make-up and skincare sales in Australia, particularly at bricks and mortar stores, to herald the beginning of a “make-up renaissance” as economies open up, vaccines are rolled out and consumers resume spending.

Estee Lauder, which is one of the biggest beauty brand owners in the world, specifically mentioned Australia along with Israel and China as nation’s that were leading the globe in a rebound in sales with people going out more for either socialising or work and requiring replenished make-up supplies.

“In China, Australia, and Israel, which are at the leading edge of recovery, we are seeing higher makeup sales with usage occasions increasing as social and professional engagements gradually normalise,” said Estee Lauder chief financial officer Tracey Thomas Travis at the company’s third quarter earnings briefing.

Interestingly the uplift in consumer demand was most evident at bricks and mortar stores, not exclusively online, as in some jurisdictions where COVID-19 is under control such as Israel and Australia shoppers feel more comfortable visiting large shopping centres and malls.

“For example, sales in our free-standing stores in Israel have returned to pre-pandemic levels, and even lipstick sales are almost back to normal. The upcoming addition of the DECIEM brands to our portfolio and the expansion of our business with Sephora and Ulta Beauty in the US represent additional growth drivers for us as we progress in recovery from the pandemic shock giving us further cause for optimism,” Ms Travis said.

This was backed up at the earnings call by Estee Lauder chief executive Fabrizio Freda who specifically called out the performance of Australian bricks and mortar stores selling his cosmetics, skincare and wellness products as social life returned to more normal levels.

“By the way, Australia is another place where it’s visible the recovery on make-up, because of the reopening of the brick-and-mortar and more social life,” he said. “Australia and Israel is another place where we see signs of what happens during the recovery. And the signs are consistent, by the way.”

There is growing evidence in Australia that consumers are returning to large shopping centres, with two of the nation’s biggest landlords, Scentre Group and Vicinity Centres, recently testifying to the rise in foot traffic.

At the Macquarie Australia Conference last week, Scentre Group, owner of the local Westfield empire, said it had witnessed a rise in customers coming back to shopping malls over the last quarter, even as outbreaks in Sydney threatened to shake shopper confidence.

Scentre said customer visitation had continued to improve and at the end of April, total portfolio customer visitation was back to 93 per cent of 2019 levels.

Vicinity Centres boss Grant Kelley, whose portfolio includes Australia’s biggest shopping centre, Chadstone, has also commented on higher store traffic in his centres.

“We are seeing some positive signs in centre visitation, retail sales, average basket sizes and cash collections,” Mr Kelley said last week.

“While COVID-19 continues to present challenges, the business environment has no doubt, improved considerably versus our expectations, even three months ago.”

This return to bricks and mortar stores, especially for the cosmetics sector, might have also been the reason for a recent dip in active customers for online beauty retailer Adore Beauty which provided a trading update last week.

Adore Beauty revealed active customers for the nine months to the March quarter numbered 687,000, up 69 per cent on the previous corresponding nine month period. However, this seems to have been down on the update provided at the December half when Adore Beauty said it had 777,000 active customers for calendar 2020 at its site.