NEW YORK — Yet another major specialty retailer wants a generous slice of the lucrative fragrance business.
Brooks Brothers expects to sign a deal this afternoon with fragrance producer Inter Parfums Inc. for the design, manufacture and supply of yet-to-be named fragrances and personal care products for the fashion chain's U.S. stores.
The deal also involves an unusual licensing provision that will allow Inter Parfums to distribute Brooks Bros. scents at the retailer's international stores, as well as at third-party specialty and department stores outside the U.S. and at duty free and other travel-related retailers.
The two-part Brooks Bros. deal represents a first for Inter Parfums — and perhaps a new wrinkle in fragrance licensing agreements — because it couples Inter Parfums' specialty retail supply, or private label, business with a licensing agreement to produce and distribute fragrances internationally.
"It's new," Jean Madar, chairman and chief executive officer of Inter Parfums, said of the way the agreement was set up. "We will be able to launch domestically and internationally with [Brooks Bros.]," he added. "We know the two businesses. For us, it's not a departure but a very complete deal." Inter Parfums distributes scents in 120 countries.
Brooks Bros. is the latest in a growing list of specialty chains that have recently entered the beauty business, including New York & Company Inc., which developed a bath and body care line with Inter Parfums, and Ann Taylor. Inter Parfums also produces personal care products for Gap, Banana Republic and Quiksilver, which is a license.
Brooks Bros. expects to launch new fragrances, men's and women's, next November at its 200-plus stores in the U.S., including its 346 and Country Club concepts, its factory outlets and its airport locations. The retailer expects to have 20 airport stores by the time the new scents are launched.
An international launch of the new Brooks Bros. scents is planned for spring 2009. The retailer has 120 stores outside the U.S. and expects most of these stores eventually will carry the new fragrances.
In Madar's view, a proliferation of the beauty business in specialty stores has been driven by retailers' hopes of grabbing market share from competitors, especially department stores.Getting into the beauty business is "an advantage for these specialty stores," said Madar, who contended that offering beauty products increases traffic to stores and has the potential to make specialty chains into "beauty destinations.
"They are not only retailers, but they also have an aspirational trademark. Why lose the business to department stores when [they] can capture a big piece of it?"
Also as part of the deal, Inter Parfums will take over, as early as next week, production of three existing Brooks Bros. men's fragrance brands: the retailer's signature Brooks Bros. fragrance; the 1818 line, referring to the year the retailer was founded, and the Country Club brand. There are plans for these three scents to be repackaged. The retailer will continue to carry a fourth fragrance collection, called Royall, although it is not produced by Inter Parfums.
Madar said the agreement with Brooks Bros. goes beyond a traditional private label arrangement because of the level of Inter Parfums' involvement in developing new fragrances. "We are not just the filler," he said.
In the U.S., Inter Parfums will oversee product development, formulation, packaging design and manufacturing, while Brooks Bros. will oversee marketing, advertising and in-store sales.
The union with Inter Parfums will enable Brooks Bros. to rebrand and repackage existing scents and to expand the presentation of fragrances in its stores, according to Claudio Del Vecchio, chairman and ceo of the 189-year-old retailer.
"We have carried fragrance for many years and it's always been a pretty healthy business for us," Del Vecchio said. Now, "we'll be able to rebrand [the fragrance business] and put the same effort [behind it] in all the stores."
The deal marks the first time the retailer has ventured into the women's fragrance territory. "We've been successful with men's fragrances and we think, with women's, we can be even more successful," he said.
Del Vecchio said the performance of Brooks Bros.' women's apparel business spurred the retailer to get into fragrance in a bigger way. "Our women's business is growing very fast," he said, but added, "We felt we were missing carrying a fragrance for women."Del Vecchio also said it made sense to find a partner for global fragrance distribution due to what he called "challenges" the retailer was facing distributing its fragrances abroad. "Because of licensing and regulations, we needed to [have a partner]," he acknowledged.
Both executives expect to introduce at least 15 items at launch, including men's and women's scents in different sizes as well as ancillary items that could include body lotion and cream for women and aftershave and deodorant for men.
Madar expects to name the new fragrances after about three to five months of "exploratory" work that will include identifying the strength of the Brooks Bros. brand and "exploring the emotional territory of the brand." He noted there were no plans to expand the Brooks Bros. personal care brand into bath and body or color cosmetics.
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