Beauty Glow-Ups: Notable Investments in 2019

By Laura Duane and Alexandra Lane, Law Clerks (admission to bar pending)

Makeup Brushes
Image by kinkate from Pixabay

The beauty industry has seen substantial growth in recent years and 2019 was no exception.  In addition to numerous mergers and acquisitions, there were some major investments in the industry over the past year. Continue reading Beauty Glow-Ups: Notable Investments in 2019

CA, IL, NV Ban Animal-Tested Cosmetics

by Jessica Linse

Beginning January 1, 2020, California, Illinois, and Nevada became the first states to ban the sale of cosmetic products and ingredients that have been tested on animals.

On September 28, 2018, Governor Jerry Brown signed the California Cruelty-Free Cosmetics Act (SB 1259), which became the first state law to prohibit the sale of any cosmetic or ingredient tested on animals. Continue reading CA, IL, NV Ban Animal-Tested Cosmetics

Personal Care Products Sector Gets Boost From New North American Trade Deal

On January 29, 2020, President Trump signed the U.S.-Mexico-Canada Agreement (USMCA) into law, with key commitments impacting the personal care products sector.

The 2,082-page pact, which updates the 26-year-old North American Free Trade  Agreement (NAFTA), comes after more than two years of   negotiations, and was overwhelmingly ratified by the U.S. Senate on January 16, 2020.

Significantly, the USMCA contains a new Cosmetic Products Annex, which promotes greater regulatory compatibility and shared best regulatory practices in the personal care products sector.

Continue reading Personal Care Products Sector Gets Boost From New North American Trade Deal

FDA To Host Day-Long Public Forum On Asbestos-Contaminated Talc

On January 9, 2020, the U.S. Food and Drug Administration announced that it will host an all-day public forum to discuss testing methods for asbestos in talc and cosmetic products containing talc on February 4, 2020.

According to the FDA, the purpose of the meeting is to discuss testing methods, terminology, and criteria that can be used to characterize and measure asbestos, as well as what the FDA preliminarily states may be “other potentially harmful elongate mineral particles (EMPs)” that may contaminate talc and cosmetics products that contain talc.

Continue reading FDA To Host Day-Long Public Forum On Asbestos-Contaminated Talc

The Spa Industry Will Find Offering CBD Products Can Be Tricky

Duane Morris associate Kelly Bonner shares legal insight on CBD products and services in the January issue of DaySpa magazine.

From the publication:

  1. Consider the source. CBD can be derived from both hemp and marijuana, which have different definitions in U.S. law and are subject to different statutory and regulatory requirements. Hemp-derived CBD products are not illegal to sell and possess under federal law, as long as they contain no more than 0.3 percent tetrahydrocannabinol (THC). Marijuana has more than 0.3 percent THC, and is a Schedule I controlled substance under the federal Controlled Substances Act.
  2. Get proof. Given the current lack of federal testing requirements for CBD products, it can be difficult to ensure that those purchased from third-party vendors contain no more than the permitted level of THC. So it’s extremely important that spas get anything containing CBD from a trustworthy supplier who can verify ingredients, confirm THC levels with third-party labs and/or provide certifi cates of analysis.
  3. Act locally. While the 2018 Farm Bill lifted the federal ban on the commercial cultivation of hemp and derivatives that contain no more than 0.3 percent THC, the ability to manufacture, market and sell CBD products is still heavily regulated at the state level, and changing rapidly.
  4. Make no promises. The U.S. Food and Drug Administration (FDA) has issued warning letters to a number of CBD companies that have touted their products as having certain health benefi ts in their promotional materials and on packaging or websites. Spas should ensure that any products or services offered don’t come with false or misleading claims.
  5. Handle with care. Although research into the risks of CBD use is ongoing, the FDA has noted potential adverse health effects linked to the use of cannabis products containing THC by pregnant or lactating women. Even though CBD topicals typically contain very low levels of THC, spas should be up front with clients about potential risks.

To read the full text, read the January issue of DaySpa magazine.

Nanette Heide Comments on the Future of Private Equity Firms and Small Beauty Brands

Nanette Heide, Duane Morris partner and Fashion/Retail/Consumer Branded Products Group senior advisory partner, is quoted in Glossy article, “Private Equity Firms Will Get Comfortable With Small Beauty Brands in 2020.”

“The trend will be private equity companies getting involved in brands earlier and taking on a minority stake versus majority control,” she said. “They’ll blur the lines of venture capital in order to make sure they are in early enough, because then brands can catch fire and sell within 16 months.”

To read the full article, visit the Glossy website.

The Impact of Corporate Social Responsibility on Fashion Brands

Corporate social responsibility (CSR) is not new. However, the relevance of CSR to brand valuation for investors and other stakeholders is increasing exponentially year after year. As a new generation of talent and consumers becomes increasingly more “woke” (read: aware) to environmental, political, and social issues, CSR becomes a critical factor in increasing—or diminishing—brand value. This is particularly relevant in the fashion industry where sustainability and other hot-button political and social issues have come to the forefront.

What Is Corporate Social Responsibility?

Unless you’ve been living under a rock, you’re probably hearing about CSR from a variety of sources, multiple times a day. Indeed, almost every recent issue of Women’s Wear Daily (WWD) features news about what fashion brands are doing (or not doing) to embrace sustainability. Brands that refuse to embrace CSR face potential diminution in value or, even worse, the slow and painful death known as irrelevance.

To read more visit the Duane Morris website.

Duane Morris Reports from IBA European Fashion and Luxury Law Conference in London

London was as you’d expect in mid-June: Damp and chilly; Londoners – hurried but always friendly – cloaked head to toe in Burberry. It was the perfect backdrop for the second IBA European Fashion and Luxury Law Conference, held at Altitude 360 in Westminster June 12 – 13. Duane Morris was a reception sponsor and members of Duane Morris’ fashion and luxury-focused industry team attended the conference and conference events. New York’s own powerhouse fashion M&A lawyer Nanette Heide led the working group on Private Equity in the fashion and luxury industry.

London’s role in the global fashion scene is an integral one. London is hugely relevant to fashion and design and – one could argue – at least as relevant as Paris. What is casual and non-pretentious in London is inspirational to the rest of the fashion world. Tight, high-wasted black jeans and chunky white sneakers are having a major moment here, in an understated London way that is sure to inspire runways and retail around the globe. But… this is about the law conference.

Throughout the conference – during the informal networking sessions, working sessions, and interactive workshops – there were three distinct and overriding themes: 1. Relevance, 2. Corporate Responsibility, and 3. Digitalization.

The substantive part of the conference kicked off with a provocative keynote delivered by Jo Ellison, Fashion Editor for the Financial Times in London. Jo wasted no time begging the attendees questions about relevance and more specifically, brand relevance. She set the tone for a day of discussion about what fashion brands must do – and not do – to stay relevant in a global economy that is becoming increasingly aware and sensitive to hot button issues such as race, culture, corporate responsibility and climate change.

Gary Assim of Shoosmiths and Christine Blaise-Engel of FIDAL led Alina Franco of Vudoir Hub and Michael Menz of Zalando in a discussion about the Digitalization of Fashion and Luxury. The main take-away from the working session on digitalization: Digitalize or die. Hand in hand with relevance, brands that do not adopt and embrace technology and digitalization will fade into the background. With billions of consumers on social media (3 billion+ as of posting) – and most of those on mobile phones (2.8 billion+ as of posting) – brands need to understand how to communicate their message and resonate with their target demographic.

Sustainability is the new social media in terms of impact on the fashion world and brands. Nicola Broadhurst of Stevens & Bolton and Eva Cruellas Sada of Gianni Origoni Grippo Cappelli & Partners led Sarah Ditty of Fashion Revolution, Lorenzo Maria Di Vecchio of Fendi, Romy Miltenburg of ASICS and Professor Barbara Pozzo, of the University of Insubria-Como and University of Milan in a discussion about Sustainable Fashion. Not embracing sustainability? Cue Vivian Ward: “Big mistake. Big. HUGE!” Fashion is a leading polluter but is also an industry primed to convert a linear supply chain to a circular one. Environmental law is becoming increasingly more important in fashion as is transparency about activities and protocols companies are implementing to improve sustainability and minimize footprint. Sustainability and transparency are becoming critical to reputation and a strong reputation equals a strong brand.

The Private Equity Panel, led by Duane Morris’ own Nanette Heide and firm client Penningtons Manches’ Matthew Martin included Fabio Andreottola of Alvarium CoRe Partners, Yasha Estraikh of Piper, and Antonello Orunesu Preiata of Onward Luxury Group and built on the discussion about brand equity by highlighting the importance of reputation and brand value to private equity investors.

The Interactive Workshop groups debated and discussed data, advertising and social media influencers, European designs, and PR disasters. Attendees shared perspectives from jurisdictions throughout the EU and beyond. Significantly, the ways in which the represented jurisdictions handle these issues differ as much culturally as they do legally.

The “In-house at the Fashion House” panel was led by Dolf Darnton of Osborne Clarke and featured the energetic and entertaining insights of Lorenzo Maria Di Vecchio, who serves as the worldwide legal and compliance manager to the venerable Fendi. Lorenzo was joined by Sarah Hemsley, General Counsel to the quintessential London department store, Selfridges and Sarah Mackie, General Counsel for the UK based and globally received French Connection. Each of the panelists drew on their experiences in different in-house roles for influential fashion brands. Each reiterated the critical role of corporate responsibility and other issues lighting up their desks on a daily basis. The panel offered outside counsel attendees valuable insight into the supporting role they play in addressing the issues that keep the fashion house lawyers up at night.

Professor Andrew Groves, Professor of Fashion Design at the University of Westminster in London, closed out the day with the controversial question “Is Fashion Dead?” The professor’s presentation and discussion about brand authenticity, originality, and creativity, closed the loop on the theme of relevance and the requisite consciousness of brands that desire to stay relevant.

If the past two conferences are any indication, next year in Paris will continue to spark ideas and enthusiasm, and inform and inspire lawyers and brands in the fashion and luxury industries.

Contaminated Cosmetics: Recalls, Lawsuits and Legislation

In recent months, reports of asbestos-contaminated cosmetics have illustrated the enduring challenges of manufacturing and marketing cosmetics as safe for consumers, particularly teens, children and expectant mothers. This is especially true where still-developing science, emotion and rapidly disseminated information (and misinformation) all play critical roles in shaping public perception, even influencing jury outcomes.

This article explores the potential legal challenges for supply chain participants arising from contaminated cosmetics, as well as significant proposals to change the way the U.S. Food and Drug Administration regulates cosmetic safety.

The Relationship Between Talc and Asbestos

Talc, also known as talcum or magnesium silicate, is a naturally occurring silicate mineral mined from underground deposits. Because talc is the softest mineral known to man, it has been used in cosmetics manufacturing for centuries.

To read more visit the Duane Morris website.