By and  on October 19, 2007

Along with several other growth initiatives on the drawing boards, AnnTaylor Stores Corp. now sees the beauty business as a major opportunity.

Perhaps that's why its upcoming fragrance is called Possibilities.

"We are very focused on growth," said president and chief executive officer Kay Krill, who divulged exclusively to WWD the details of the impending beauty launch and outlined the bigger picture for strengthening the corporation and broadening its offerings.

"Currently we have a number of exciting growth initiatives," Krill said. "We are planning to launch a completely new concept focused on modern Boomers next fall, and a Loft Outlet concept next summer."

The beauty introduction comes sooner — the week of Thanksgiving. It entails the Possibilities women's fragrance and the Ann Taylor Body Care line simultaneously launching at all 350 Ann Taylor stores.

Subsequently, Krill said the scope of the collection will be expanded in the Ann Taylor division, and that additional beauty lines for the lower-priced Loft division and for the new retail concept will be developed. "This is not just an Ann Taylor initiative, it is a corporate initiative. Cosmetics will go into every brand we have," Krill said. "Our clients use beauty products every day and have full lives, but they've had to go to other stores for beauty.

"Clearly, we are not standing still."

Industry sources projected the beauty collection could generate up to $15 million in sales in the first year. Krill declined to comment on projected volume, other than saying beauty represents "a big opportunity over time."

The company envisions perhaps doing floral oriental and fruity floral fragrances in the future since internal research shows Ann Taylor customers like owning two or three fragrances. The Loft fragrance is in the works for next fall, with a second Ann Taylor scent due in November 2008.

For the face of Possibilities, 25 candidates, all celebrities or models, were presented to Krill by Robert J. Luzzi, executive vice president and chief marketing officer. But Krill knew right away from the list who she wanted: Petra Nemcova. "Can you get her? Is she available?" Krill asked at a meeting. "I already got a commitment from her," replied Luzzi.Come spring, the model, who is widely recognized for surviving the Indonesian tsunami and working to help victims of the catastrophe, will also be the face of the Ann Taylor brand overall, appearing in its marketing and advertising. Krill is determined to modernize Ann Taylor's image, and cash in on the rewards that beauty can bring to a retailer — provided of course, customers take to the line and the launch is effective. It's a nonpromotional, high-margin category that draws greater repeat traffic than apparel, and can be an important gift business, especially critical around holidays. According to The NPD Group, the market research firm, the average woman shops once every two-and-a-half weeks for cosmetics, and more seasonally for apparel.

With Possibilities, Ann Taylor is taking cues from prestige brands by not leaving any stone unturned. Adrienne Lazarus, president of the Ann Taylor division, will run the beauty division and is in the process of hiring a small team of about a dozen executives, including a beauty chief and specialists for each division. In-store shops, 200 to 500 square feet in size and outfitted with waterfall glass units for bath and body and large vanity tables for the fragrance, are being set up. Flagship locations such as Rockefeller Center and on Madison Avenue will get the biggest shops. Initially, the beauty presentation will be right in front for holiday selling and includes window displays. Later, much of the beauty product will shift to other high-traffic spots, such as the cash wrap.

The beauty collection is being developed in concert with beauty veteran Robin Burns and her Batallure Beauty group. Magazine ads, scent strips, custom fixturing and personal appearances by Nemcova are in the works. "We dabbled in beauty a couple of times, but it wasn't conceptualized or executed properly," Krill said. "We know apparel; we do not know the beauty industry."

Beauty hasn't been the only problem. It's been a bumpy ride for the $2.4 billion Ann Taylor for years, marked by up-and-down sales and profits and significant management turnover. Most often when one division was riding high, the other would be sinking. The corporation reported a 27 percent drop in second-quarter earnings due to declines in traffic and merchandise misses. Total same-store sales declined 6.2 percent. For the six-month period, earnings slid 23 percent.But the company has been building up its offerings, including launching Celebrations, a special occasion collection. Krill has long been refining and differentiating the images of the two core divisions, Ann Taylor and Ann Taylor Loft. "Inventory management has become our new way of life," Krill said. "We have been able to reduce inventory but still offer the breadth of apparel." Asked about holiday, Krill said that in September, "We squeezed out a positive comp," leading her to feel optimistic for both brands.

One reason Nemcova was attracted to the Ann Taylor deal was because $2 of every fragrance purchased from Thanksgiving through the end of the year will go toward the Helping Hearts Fund she founded to help children impacted by the tsunami and other needy children. "After the tsunami, I couldn't sit on my butt and do nothing. If each of us does something very, very small, it has incredible impact in Third World countries," said Nemcova. "This is a great opportunity to merge fashion with a meaningful cause. It is really selfish for me, because by making other people happy, it makes you really happy."

"We feel Petra is beautiful inside and outside," Lazarus said. "Her inner beauty came through and we felt that it resonated with the brand and the positioning."

Ann Taylor Body Care, a well-priced line of everyday care products, consists of three products offered in six scents for a total of 18 stockkeeping units. A body wash and body lotion will be priced at $12.50 each and a body mist will sell for $16.50.

As for the Possibilities women's fragrance, Lazarus described the formula as a floral with a modern feeling. Created by perfumer Harry Fremont of Firmenich, the fragrance features notes of Bulgarian rose, water lily, blue rose, peach musk and exotic woods. Possibilities has six sku's: a 1.7-oz. eau de parfum spray, priced $42; a 2.5-oz. version for $52; a 3.4-oz. size for $62; a 0.25-oz. purse spray for $25; a 6.7-oz. body lotion for $20, and a Possibilities gift set for $59.

The bottle is multifaceted in shape with a prismatic design to suggest a cut crystal. It was designed by Luzzi. The fragrance is colored the Ann Taylor signature pink.Compared with a typical private label project, Ann Taylor is going the extra mile to promote its fragrance. A black-and-white ad, shot by Sante D'Orazio on the Dupont Estate on New York's Long Island, will appear in December editions of Glamour, O the Oprah Magazine and In Style, the latter of which will include a scent strip. Nemcova was photographed in a diaphanous Celebrations dress, posing on a lawn at the Dupont Estate and looking behind her. She's a brunette, her natural hair color, because the company felt it's a more sophisticated look with more substance, though she often appears as a blonde. Nemcova is also barefoot in the ad, projecting a sense of freedom, individuality and some mystery. "There is a modern spirit, a bit voyeuristic. She's looking back at someone, but we don't want to tell who the someone is," Luzzi said.

"It's very me," Nemcova added. "If I could I would walk barefoot everywhere."

More scent strips will be included in an eight-page fashion mailer in November, with a circulation of one million, and another Beauty of Giving mailer in December. The latter holiday piece will feature the fragrance plus bath and body gift sets and go to 1.5 million customers.

To prime the pump, two million scented blotters were created and they will be handed out with every Ann Taylor purchase during the season, starting this weekend. Another 50,000 vial-on-card samples will be distributed during wardrobing events to the store's best customers. The month after the launch, the fragrance will be featured in windows.

Nemcova will make in-store appearances, a tactic usually employed for celebrity and designer fragrances. Luzzi said the model will visit the Rockefeller Center store on Dec. 1 plus five others, including the Mall at Short Hills and other shopping centers also in New Jersey before swinging up to Westchester, N.Y. Burns will work on everything from product development to giving advice on a range of issues, including the full spectrum of merchandising through hiring personnel. Krill called it "a strategic partnership."

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