AmorePacific Raises the Stakes in the US

By Tom Branna , Editorial Director | September 28, 2012

The leading player in the Korean beauty market is expanding its reach in the US with new products, new distribution and big plans.

With new products, a new president and new distribution plans, AmorePacific is taking a new direction in the US—one that company executives insist will double sales in the US and Canada in just three years.

“Our mission is to accelerate sales growth,” explained Bradley Horowitz who, in June, was named president and chief executive officer of AmorePacific US. Earlier this year, he joined the company as chief operating officer.

AmorePacific’s global sales topped $2.3 billion last year, making it one of the biggest players in the beauty industry, but the company’s presence in the US and Canada is on a less grand scale. Last year, sales in the US and Canada totaled $15 million. Horowitz expects to change all that—and rather quickly. AmorePacific products are available in select Bergdorf Goodman, Nordstrom, Neiman Marcus and Sephora retail stores, as well as AmorePacific Beauty Gallery and Spa in New York City, but Horowitz wants more. The distribution plan is “narrow and deep,” and should provide plenty of room for AmorePacific to grow. After all, there are 230 Nordstrom stores in the US, 40 Neiman Marcus stores and over 300 Sephora stores in North America.

“Where our products are available today, we are doing great,” insisted Horowitz. “We are one of the fastest-growing brands at Neiman Marcus, where our growth rate is nearly 20% and our growth rate in Sephora is over 50%. Our business is very healthy; the customer is responding. Now we have to tell our product story more often to more people.”

Horowitz isn’t new to the competitive US beauty business. He has more than 20 years of strategic, sales, marketing and management experience in the industry. Prior to joining AmorePacific, Horowitz was founder and CEO of BJH Consulting, where he served as an executive consultant for several of the beauty industry’s leading cosmetic and fragrance companies, including Oscar de la Renta, Coty Beauty, Beauté Prestige International and VMV Hypoallergenics. Before that, he held a variety of marketing and sales positions throughout the cosmetics industry, including serving as senior VP-sales for the Designer Fragrance Division of L’Oreal USA, and senior VP-marketing for Clarins USA, Inc.

A Strong Lineup
AmorePacific’s product story begins at one of the largest research and development centers in Asia. There, the company has developed novel means to extract Epigallocatechin Gallate (EGCG) from green tea and stabilize the material in cosmetics through a patented process. EGCG, an antioxidant polyphenol flavonoid, is the key ingredient in AmorePacific’s Time Response Cream, which retails for more than $400, yet has a loyal following with consumers. The cream promises to restore collagen production to minimize appearance of fine lines, wrinkles and sagging; stimulate hyaluronic acid production for increased moisture levels; minimize excess sebum; regulate melanin and stimulate skin’s own antioxidant production. According to clinical test results conducted by AmorePacific, skin roughness started to decrease after 2 weeks and it was constantly and significantly decreased through 8 weeks. Facial skin elasticity increased 10% after 5 weeks and it was maintained through 8 weeks.
AmorePacific is taking the EGCG story even further this year with the launch of Advanced Time Response Intensive Skin Renewal Ampoules, which have even more efficacy. For example, skin smoothness improved 19.8% after 2 weeks, and 28.5% after 5 weeks; while skin elasticity improved 1.5% after 2 weeks and 10.2% after 5 weeks.

Time Response Skin Renewal Crème is one of AmorePacific’s best-selling products in the US.

Time Response may be AmorePacific’s biggest line in the US, but the company has several top-selling brands. For example, the No. 1 product at Sephora is Treatment Enzyme Peel ($60/70g) that helps brighten and even skin tone while providing a soft and smooth complexion; eliminates dry, dull surface cells and toxins and improves penetration of other treatment products due to removal of dead cells. The product contains papain, allantoin and green tea leaf extract.

What’s New?
This fall, AmorePacific is rolling out Luminous Effect, a collection that promises to inhibit melanin production and reduce existing pigment for a more translucent effect. Both the serum and the brightening masque contain Asian botanicals to promote a brighter complexion.

According to AmorePacific, its exclusive Meladefying Complex regulates all five steps of skin’s natural melanin formation process when used consistently. Its first mechanism of action is to desensitize melanocytes to create only minimum amounts, even when irritated by environmental stressors.
Next, it works to neutralize inflammatory stimuli while inhibiting the formation of new melasma-based blood vessels, making it harder for new melanin to be formed. Finally, it works to inhibit the DNA deformation of melanocytes caused by UV, effectively blocking unpredicted melanin generation and fortifying the dermal-epidermal junction. Luminous Effect Brightening Serum (1oz) retails for $220 and Luminous Effect Brightening Masque (6 masks) retails for $120.

Last month, the company introduced Future Response Age Defense Cream which contains both green tea and pine mushroom extracts, as well as AB-12 Complex, a compound of 12 different Asian botanicals that are said to address the 12 symptoms of aging to improve skin’s moisture, resiliency, radiance, tone and firmness. Future Response’s ingredient list includes cotton to stimulate the production of keratin and reduce irritation; palm cactus to stimulate ceramide production and boost barrier function; magnolia to control excess pigmentation and gotu cola to stimulate growth and migration of cells. A 1.7oz cream retails for $195.

Treatment Enzyme Peel is a big hit in Sephora, where it is AmorePacific’s best-selling product.
“The cosmetics industry demands innovation,” insisted Horowitz. “Our pipeline over the next two years will bring a lot of game-changers to the marketplace.”

Obviously, AmorePacific’s anti-aging breakthroughs don’t come cheap, but Horowitz noted that it costs more to create skin care products that actually do more.

“As food, drug and mass brands have become stronger, the onus is on us to deliver even more effective products,” he explained. “We’re putting in more dollars into R&D to deliver what the consumer wants and deliver these highly effective products with great service.”

To promote all of these products, AmorePacific is developing a new website, and new print ads debut this fall. At the same time, Horowitz says the company can win in-store by developing highly trained sales people, providing extensive sampling and creating events that give AmorePacific customers a luxurious experience.

For example, AmorePacific’s services include a “Beauty Creator” on the East and West Coast of the US who performs demonstrations on proper skin hygiene and skin care regimens, while building and maintaining positive working relationships with department staff. Through this combination of product, personnel and promotion, Horowitz is confident about his company’s US prospects.

“Consumers look to and respect Asia as a source for fine skin care. AmorePacific is driven by its research and development,” insisted Horowitz. “In a very cluttered skin care market, AmorePacific offers a real point of difference.”

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