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Posts Tagged ‘research

Flat irons may become a thing of the past as researchers for L’Oreal in Paris say they’ve identified what causes curls.   According to their findings, the answer lies below your scalp in the hair bulb — which is hook-shaped for curly hair and straight for straight hair.

It’s believed that those bulbs could be altered using hormones, meaning that a simply pill may one day be able to turn curly hair straight and vice versa.

“I think this could be potentially revolutionary if it actually changed the shape of the bulb within the hair follicle,” said Dr. Diane Berson, a dermatologist at New York Presbyterian Hospital.

L’Oreal said its findings could also lead to a pill that reverts gray hair back to its original color.

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Even Christmas tree sales are struggling this year, according to industry research firm IBISWorld.  Real and fake tree sales are expected to decline 2.5 and 5.1 percent, respectively, as fewer people have multiple trees in their home (i.e. dining room and living room) this holiday.

“People are looking at every which way to save a buck but also continue with the Christmas spirit,” says Toon van Beeck, a senior industry analyst for IBISWorld.  “That’s why we’re seeing an increase in do-it-yourself and used trees.”

One tree category expected to fare particularly well this season is used, fake trees.  IBISWorld expects these tree sales to grow 4.0 percent this holiday.

While gadgets and electronics continue to be hot items year-on-year, there will be fewer large purchases this holiday, such as TVs and computers.  This is partly due to the fact that retailers will look to reduce the number of deep discounts – which severely damaged margins this time last year – along with the fact that customers will move towards needs over wants.

“This season there won’t be a “wow” factor in terms of sales,” said Toon van Beeck, senior analyst with IBISWorld.  “Consumers have been so inundated with discounts for more than a year that it will be difficult for retailers to get shoppers excited about holiday promotions.”

However, one of the biggest gadget winners this holiday will be e-book readers, partly because the prices are being driven lower by competitors entering the market (e.g. iRex and Nook).  About 30 percent of all e-reader sales in 2009 are estimated to derive from the holiday period alone.

“Consumers will reduce spending on big ticket items,” said van Beeck.  “Instead, they’ll trade down towards trendy and cheaper gadgets like e-readers; iPod Nanos; Nintendo Wiis and other game consoles; Flip Video and small point-and-shoot digital cameras. This is where the real value will be for consumers this Christmas.”

tanning-bed-switch spray tanAs beach season comes to an end and people head back to the tanning salons to maintain their hard-earned summer bronzing, there are major changes occurring in the tanning salon business. 

Everyone knows the growing concerns about skin cancer is hindering the $2.7 billion tanning salon industry, which industry research firm IBISWorld expects will decline by 5.1 percent this year.  However, the shift in consumers moving from tanning beds to tanning sprays may actually be a ray of light for the industry. 

“By far, ray-lamp skin tanning is the number one revenue source for tanning salons at 72 percent, but growing awareness of the high cancer risk associated with their use continues to diminish market share,” said George Van Horn, senior analyst with IBISWorld. “Profit levels are higher with spray-on tanning booths; therefore the shift toward these substitutes may actually improve the industry.”

Although UV-bed tanning sessions on average cost from $5 to $7, the industry is reliant on high turnover, with sessions typically lasting 15 to 20 minutes. The rising popularity of spray-on tanners, which now account for 11 percent of industry revenue, is expected to grow to a whopping 17 percent in 2009.
 
“Tanning salons are operating in a mature market, and to stay in the game salons need to adapt to market trends and offer innovative spray-on tanning products and services,” added Van Horn. “Because this is a long-term shift, those who diversify their menu, such as providing health and beauty services, will also have a greater chance in generating revenue.”

tiffany quarterly earnings 2009

Sales are lackluster for high-end jewelry retailers this year as Tiffany & Co. is declining much faster than the jewelry industry as whole, according to industry research firm IBISWorld. Analysts at the firm expect industry revenue to fall 4.8 percent to $28.26 billion this year, with price competition from big-box retailers, like Walmart, stealing market share sparkle from traditional jewelry retailers

“Although luxury shoppers represent a small elite portion of the population, they are the primary target market for high-end jewelers,” said George Van Horn, senior analyst with IBISWorld. “Even the wealthy are cutting back on extra discretionary purchases like jewelry and watches.”

Tiffany is expected to generate earnings per share of about $0.34, which will represent a decline of 46 percent from the $0.63 cents per share compared to the same quarter in 2008.  Also, revenue for the quarter is expected to be about $600 million, which will be down 17.3 percent from the $732 million for the same time in 2008. 

The fourth quarter of 2009 should see a significant revenue boost compared to the tough Christmas trading period of 2008. It is during this period, the fourth quarter, when jewelry stores will begin to realize more solid returns and better operating performance.  As a result, profitability is expected to rise from 10.5 percent of revenue in 2009 to 11.2 percent of revenue in 2010, as luxury spending slowly returns.

While some improvement in industry operating conditions is expected in 2010 as the economy improves, IBISWorld industry risk ratings for jewelry retailing will remain at a very high level.  Despite some modest improvement in ratings during the past six months, jewelry retailing continues to have the highest risk rating among the 60 different forms of U.S. retailing that IBISWorld monitors.   

Over the coming few years, one of the major challenges for the industry will be the entrance of De Beers into the Jewelry Stores Industry. De Beers is planning to stake its ground as a retailer with a long-term plan to open around 150 stores under the De Beers LV joint venture with LVMH Moet Louis Vuitton. IBISWorld estimates that this move by De Beers will further increase the competition and boost the consolidation that has been under way over the past few years.

“The Jewelry Stores industry is on the precipice of a restructure at both retail and wholesale level that forces players to move quickly to ensure long-term viability,” added Van Horn.  “Tiffany will continue to be challenged in finding new ways of selling its products without compromising its brand.”

Photo by ElRincon
Photo by ElRincon

Fashion week is approaching and despite the recession putting a damper on retail sales, industry research firm IBISWorld ranks fashion design as one of the top start-up opportunities for entrepreneurs in 2009. As fashionable clothing is becoming more affordable and consumers start to regain confidence, the Los Angeles-based firm forecasts industry-wide recovery to take place in the second-half of 2010, with an average annualized growth of roughly 6.3 percent in the coming five years.

“Consumer attitudes towards spending are changing, and it’s shaping the direction of fashion,” said George Van Horn, senior analyst at IBISWorld.  “Being style-conscious doesn’t mean people aren’t being budget-conscious, and vice versa. Successful fashion houses are those delivering style and quality with affordability, and we can expect this trend to linger for the foreseeable future.” 

As the saying goes, cheap is chic. With overall prices being driven down, retailers offering luxury apparel, like Saks Fifth Avenue and Neiman Marcus, have been the hardest hit, cutting costs and discounting stock in an effort to sustain profit margins.

Industry-wide, fashion design businesses have seen significant pressures on margins in recent years, with current levels approaching 6 percent versus 30 percent only a few years ago. The need to retain contracts and ensure ongoing cash flow is yet another factor behind prices going down. Even prestigious designers are bailing on displaying their latest collections on the runway or have declared bankruptcy, such as German fashion house Escada and couture designer Christian Lacroix.

 “This has certainly been a make-or-break year for fashion,” said Van Horn, who advices new entrants to differentiate their services based on smart pricing strategies, quality and creative self-marketing, rather than through reliance on advertisement. “In recent years, smaller independent designers have been sprouting like never before, largely attributed to the growing popularity of online retail, as well as relatively low entry barriers and start-up costs. This has helped give the industry the ability to move forward, despite the retail sector taking a big hit.”

cash for clunkers aftermath

If there was one pocket of the auto industry doing remotely well this past year, it was used car dealers.  While the recent Cash For Clunkers program did boost new car sales, it also accounts for 7 percent of the expected decline in used car sales in 2009, according to industry research firm IBISWorld.

“Of course, there are winners and losers,” explained George Van Horn, senior analyst with IBISWorld. “Dealerships selling used cars will invariably get the short end of the stick, as the program has created a greater number of substitute consumers to purchase new rather than used vehicles.”

New car sales this year are estimated to be 20.5 percent lower than in 2008, down to 10.5 million.  But if the program  was not implemented, IBISWorld estimates total new car sales would be  about 700,000 units fewer in 2009, at about 9.8 million (representing a 25.8 percent decline).  So far, the most popular vehicle purchases and trade-ins are as follows:

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Light trucks were the most traded-in vehicle, which is a net positive for the program’s goal in encouraging Americans to drive more environmentally-friendly, fuel-efficient vehicles. And while critics are quick to argue how most of the cars sold will actually benefit foreign companies like Toyota, General Motors ranks second as being a top manufacturer for new vehicles purchased:

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Among others to reap the benefits of the program are finance and insurance companies.  Even with a $4,500 maximum cash rebate, lenders and insurance providers will both benefit from the higher fees associated with increased loan volumes, loan balances and higher car values on the new cars purchased.  At the other extreme, with all that clunker clutter, salvage yards will be a lot busier than usual. 

“Cash For Clunkers strives to induce consumer spending on fuel-efficient cars, as well as give the auto sector a boost by helping dealers generate turnover. The program has been successful in doing just that, but it’s really a short-term fix, not a long-term solution,” said Van Horn.


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