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Beauty Scoop: Guerlain’s Game Of The Name

NEW YORK -- Patrick Waterfield, the recently named president and chief executive officer of Guerlain Inc., knows the power of a name. He also knows when it's absent.<BR><BR>Although he's been in the post only since November, Waterfield already has a...

NEW YORK — Patrick Waterfield, the recently named president and chief executive officer of Guerlain Inc., knows the power of a name. He also knows when it’s absent.

Although he’s been in the post only since November, Waterfield already has a number of specific ideas on how to build the Guerlain name, something he calls “an absolute prerequisite” to selling Beaute, the cosmetics and treatment line.

It is not a new problem. Although 66 years have passed since Guerlain introduced Shalimar to the U.S., the company is still not as well known on these shores as its world-famous women’s fragrance.

Waterfield’s predecessor, Julia A. Farrell, once said some consumers think Guerlain is “Shalimar Inc.”

One way Waterfield hopes to correct that is with a new advertising approach that will capitalize on, rather than counter, the power of the Shalimar name.

“The starting point is Shalimar because everybody knows Shalimar,” he said.

Once the connection between Shalimar and Guerlain has been cemented in the public consciousness, Waterfield continued, “then we can say Guerlain is X,Y and Z” and use the name recognition to promote cosmetics, treatment and other products.

One of the problems in the past, Waterfield said, was that “there was no consistency in advertising,” in layout or impact. He also hopes to achieve a more coherent presentation in Guerlain’s store counters.

The company named a new agency — Weiss, Whitten, Stagliano Inc. — to succeed J. Walter Thompson, which had been its agency for seven years.

Although budgets have not yet been set, Guerlain also plans to dramatically increase advertising expenditures to help elevate its profile. Waterfield estimated that the company will spend “at least double” its advertising next fall over the same period in 1993.

He and other Guerlain executives declined to disclose budgets, but industry sources estimate that the 1994 budget would top $6 million. Waterfield said he will consider a range of formats for print. He’s also mulling TV. The advertising focus will be on “Shalimar and some key cosmetics and treatment products,” he said.

This effort, like others, is aimed at increasing Guerlain’s U.S. presence in terms of sales, as well as image. The U.S. market now does 15 percent — or $54 million — of the Paris-based parent company’s worldwide volume, which amounted to a total of $360 million in 1992.

With South and Central America, the Caribbean and Canada added to the U.S., the Western Hemisphere does 21 percent, or $75 million, of the global total, or $75 million.

In comparison, the Asia-Pacific region does 16 percent of the worldwide total, one percentage point higher than the U.S. Waterfield oversaw the Asia-Pacific region for 15 years, based in Hong Kong as managing director and vice president.

According to the company, Waterfield built the Hong Kong market into Guerlain’s top profit earner outside France.

Hong Kong is also where Waterfield developed a business based more on treatment and cosmetics than fragrance. Although the Asian market traditionally shuns fragrance, the preponderance of treatment and color is notable, considering Guerlain’s worldwide identity as the oldest family-owned perfume house in the business.

Waterfield hopes to have a similar impact here. The firm said 85 percent of Guerlain’s U.S. sales in 1993 came from its 22 fragrances, with color accounting for 12 percent and treatment for 3 percent. Shalimar was responsible for 52 percent of total U.S. business.

Within three years, Waterfield would like juggle the balance to 65 percent fragrance, 20 percent treatment and 15 percent cosmetics.

That would put the U.S. in closer alignment with Guerlain’s worldwide results. In 1992, the company did 63 percent of its volume in fragrance, 19 percent in color and 18 percent in treatment.

Waterfield — who is acquainting himself with the U.S. market by calling on key accounts such as Bergdorf Goodman, Saks Fifth Avenue and Neiman Marcus — has been toying with an idea of elaborating on Guerlain’s present distribution to increase non-fragrance sales.

The company now has its full line in 32 in-store boutiques and a wide assortment from the line in another 100 doors. It also has a broad network of fragrance-only doors: 2,700 for Shalimar and 1,800 for the 1989 women’s scent, Samsara.

Waterfield is thinking of an intermediate tier, consisting of perhaps 25 or 50 top department store doors in cities such as Philadelphia, where there are no in-store boutiques. In these doors, Guerlain would have a counter, with perhaps a shop concept, that would stock a “selected range” of fragrance, cosmetics and treatment.

These counters also might be in high-traffic locations near other cosmetics vendors, Waterfield noted. He said he feels that in some outlets, the “tradeoff” of more space at the expense of good location needs to be “reexamined.”

Added to the other strategies is a lineup of launches, such as the Odelys treatment line for sensitive and weakened skin.