These days it has become imperative to discuss about technology, artificial intelligence, trade wars, mergers and other aspects that are impacting businesses ; however, another aspect worth considering with the changing, rather evolving times relates to lifestyle that sometimes gets woven with beauty and wellness. Purposeful beauty and lifestyle changes are being widely adopted worldwide, with significant brands breaking through the market with a dual weapon of improving customers personal life and generating profits out of it. In the current era, people are increasingly spending on commercial forms of beauty treatments, primarily because they can afford to avail these consumer discretionary products and services and secondly because taking care of the self is now associated with brands- thanks to all advertising and marketing stunts!
According to a report published by WNB, (ASX: WNB), the exports of Australian beauty products rose to 536 million in 2018, from 456 million in 2017. The global cosmetics market is most likely to surpass $13 billion by 2019, with China and Brazil being the most promising markets.
In this limelight, let us look into a consumer services group player, which is focussed on bettering one’s lifestyle and beauty approach- Wellness and Beauty Solutions Limited (ASX: WNB).
Company Profile: Listed on the Australian Securities Exchange in 2016, Wellness and Beauty Solutions Limited (ASX: WNB) is a non-surgical medical aesthetics services company, which provides body-sculpting treatments and anti-aging beauty products to its clients. The company has its registered office in Cheltenham, Australia and has a network of ten Immersion Clinical Spas in Australia. The experienced team of doctors, consultants and dermal therapists at the company’s clinics provide non-invasive medical aesthetic and wellness and beauty services. WNB has a collection of owned and licensed wellness, beauty, and lifestyle brands. The brands sold on in the professional and retail markets include ELLE products, TANNED, Jbronze, NailKALM®. The company aims to deliver “purposeful beauty without boundaries” of the creative and technical sphere.
WNB’s Stock Performance on ASX: Before diving into its other updates, let us put our investing caps on and understand the stock performance of WNB. The stock is currently trading at A$0.012 as on 9 July 2019, with a market capitalisation of A$4.57 million and ~351 million outstanding shares.
Jbronze to be sold in Woolworths: On 12 June 2019, the company notified the market that J Bronze by Jennifer Hawkins, a tanning brand, would be sold in Woolworths (ASX: WOW), after Woolworths conducted a recent range review for its tanning category. Commencing from September 2019, 995 Woolworth stores would sell Jbronze. WNB stated that it expects to achieve sales of approximately $1M in FY2020 through the brand.
Jbronze Products (Source: Company’s presentation)
On another note of enhancing WNB’s growth, the company announced that The Giving Brands Company Pty Ltd, WNB’s subsidiary had further expanded its exclusive licence agreement with Universal Strategies Pty Ltd by three years, to make use of the Jbronze brand’s registered trademark. The licence is deemed to be effective from 1 July 2019 and it has an option to extend this tenure by two more years.
GBCo sells Jbronze, in a range that includes 12 retail products and 3 professional products, online and to over 1,000 pharmacy doors which include major banner groups like Terry White Chemmart, Chemist Warehouse and Priceline.
GBCo Brand Snapshot (Source: Company’s presentation)
Commenting on the scenario, MD and CEO of WNB Ms Christine Parkes educated the market that the Aussie self-tan market is valued at almost $60 million and is on a growth route. She stated that in a general trend, consumers are increasingly inclined towards getting the look of a golden tan, without exposing themselves to the harshness of the sun’s exposure. She further stated that J Bronze had “built a strong retail presence in pharmacy” and the Woolworths update reaches its presence to the grocery department as well.
Business Updates: On 2 May 2019, WNB released a company presentation to the market, wherein it explained its Clinical services and Retail brands.
With 10 Immersion Clinical Spas, the company’s clinical offerings follow a Fee-for-service model, providing Professional GP-led non-invasive medical aesthetic treatments, and complimentary wellness and beauty services. Professional tanning and skin treatments have been introduced. The company enjoys cross-sell opportunities, with the high margins in sales from vertical integration of owned retail brand products.
WNB’s retail brands have a licensing agreement for ELLE branded cosmetic and skincare product ranges and its owned brands include Jbronze and TANNED, which are sold through retailers and virtually as well. Following a Capital light model, the company has partnerships with leading publishing hubs to drive its sales along with Brand ambassadors, to promote it.
WNB’s progressive outlook: By FY2020, WNB aims to launch ELLE Colour Cosmetics and nailKALM in pharmacy. It also intends to introduce nailKALM in the UK; ELLE Kids in China, the UK and the US. New lifestyle brands, AWW & CSL are aimed to be launched in the ANZ region in FY2020. WNB is focussed on launching its owned brand INfinite Cosmeceuticals in clinics. With the introduction of Jbronze professional tanning this year, WNB is most likely to introduce owned cosmeceutical skincare range INfinite in the first half of FY2020.
INfinite products (Source: Company’s presentation)
WNB’s effective marketing spells: To influence customers to try its offerings of products and services, WNB’s subsidiary, GBCo partners with the Bauer network in Australia, including the Beauty Heaven, which is the country’s biggest beauty review database. Besides these forums, WNB uses the new trend of Influencer Marketing to spread its customer base. The company has renowned names like Kris Smith, Brooke Hogan and Natalie Roser in its kitty of ambassadors for GBCo.
WNB’s on-track market update for Q3 2019: In April end, the company updated the market stating that it had achieved receipts worth $3.1 million for the consolidated Company during the quarter, with $1 million via GBCo. The number of Immersion Clinical Spas maintained a cashflow positive position with WNB’s Closing cash balance standing at $3.4 million as on 31 March 2019. The company repaid $680k in loans and had $3.2 million in short term funding. The company is expecting product sales to generate revenue in Q419 and FY2020, post investing ~$650k on marketing, manufacturing and brand development.
It would be interesting to watch how the company unfold its strategic initiatives in the days to come and contribute towards the global progression and awareness of beauty and lifestyle.
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