By  on July 13, 2007

NEW YORK — Is there a whiff of recovery in the mass market fragrance business?

There are launches for the first time from companies that have been dormant in fragrance. Retailers said they were spiffing up departments and trying to bring the category out from under glass.

But, the numbers show a declining business that many buyers said would be hard to fix, especially since there was little money being pumped into the mass market. According to Information Resources Inc., women's fragrance sales for the 52-week period ended June 17 (excluding Wal-Mart) declined 7 percent, to $491.3 million. Men's sales dropped 1.2 percent, to $429 million during the same period.

Buyers said they were encouraged, however, that there were at least some new scents flowing into their doors this year. Revlon rolled out Flair last month after years of absence from the fragrance market. Flair was originally slated for the prestige channel, but the plug was pulled last year. Retailers said they would watch to see if consumer interest in Flair, which is featured in current beauty publications, was as strong as interest in a celebrity fragrance.

Retailers don't confirm it, but there are murmurs that L'Oréal is testing the waters again, too. Puig Beauty & Fashion Group has launched its fourth Antonio Banderas scent and Coty Inc. is going full throttle with mass scents and prestige fragrances that filter down to mass.

Among Coty's ammunition for 2007 is football star Tom Brady, who will quarterback the Stetson franchise, and the creation of the Beckham Beauty House built around soccer superstar David Beckham. For women, the Celine Dion portfolio is expanding to three scents. Retailers also said Coty would filter some of its prestige scents into mass as part of its two-step distribution process.

Several other manufacturers have sent up trial balloons with retailers about entering the market. At several shows, retailers have seen new entries such as 100% Love, a line aimed at teens and young women. Parfums de Coeur keeps attracting shoppers looking for knockoffs and its latest is Yeah Baby! — a version of Juicy Couture. When retailers can't get the originals, they play up the knockoffs.With manufacturers looking to revive fragrances, buyers said they would do more to get the category out from under glass. Wal-Mart recently featured a floor display of self-serve Sean "Diddy" Combs' Unforgivable. Target is placing solid samples of Elizabeth Arden fragrances on gondolas so consumers can sample the scents without wrecking bottles by opening them. Last Christmas, Target promoted upscale fragrances in advertising. And both discount giants are putting more designer scents on pallets during holidays.

Walgreens is becoming the mass market launchpad by securing some new fragrances as exclusives. A case in point is the launch of Puig's Antonio Banderas Blue Seduction, which will be available for a month in Walgreens before rolling out to other stores.

Buyers said they liked that approach of targeting celebrity scents at mass. Many of the two-tier distribution celebrity items leave little room for profits. "The problem isn't celebrity scents," said one top merchant. "The problem is there is no money spent against them. Coty says that whatever they are spending is more than anyone else is, but it doesn't help drive shoppers to our stores."

Industry consultant Allan Mottus agreed there was little profit wiggle room left in the distribution game. He said the window of time between prestige launch and mass rollout had been compressed. "The broader 1,000 department stores launch celeb [scents] with premium average prices of $50. Six months later, they're $40 without premium in mass. That is why mass merchants are upset: There is no money left for them when the goods hit the store," he explained. The business is controlled by Elizabeth Arden and Coty, which have relatively small staffs with modest overheads. They are, however, turning out lots of merchandise, but most of the money is going to pushing brands in department stores. The constant churn of celebrity scents also shortens the life cycle of fragrances, buyers said. "I think we'll see a big change. We can't let fragrances stay on the shelf as long as they used to," explained Marie-Josee Rivard, category manager for CVS Corp.

As retailers prepare for holiday 2007, they said they had not upped fragrance inventories much during 2006. However, ever optimistic, they said they would love to see the mass fragrance business roar back. "We're retailers; we are always hoping," concluded Rite Aid Corp.'s Judy Wray.

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