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NEW YORK — Coty Inc. has acquired the global beauty license of Nautica Apparel Inc. and plans to launch a new men’s fragrance next spring, while continuing the brand’s three existing fragrances.
Bernd Beetz, chief executive officer of Coty Inc., said the deal was made with the intention of further bolstering one of the three marketing pillars of Coty’s Lancaster division’s prestige business. The first pillar consists of celebrity fragrances, led by Jennifer Lopez and joined by Baby Phat and recently Sarah Jessica Parker. The second pillar is the designer group, consisting of Marc Jacobs, Jil Sander, Vivienne Westwood, Joop, Kenneth Cole and Nikos.
The third pillar is composed of lifestyle brands, like Davidoff, Lancaster and Chopard, which is where Nautica will be grouped. Beetz said he was attracted to Nautica because the apparel brand “captures the consumer’s desire for an energetic lifestyle.”
Beetz also said he was drawn to the brand because of its global appeal as well as its outdoor profile.
Coty is starting fresh with Nautica after the fashion house’s former license with Unilever expired. Nautica, a division of VF Corp., had a relationship with Unilever since 1998. Three Nautica fragrance brands remain on the market: Nautica Classic for men and women, Latitude Longitude and Nautica Competition.
Financial details were not disclosed. However, industry sources estimate Nautica’s fragrance business at $45 million in retail sales for the U.S. and $50 million retail in total global volume. Since the license had expired, sources speculate that it cost Coty little to make the deal, except for perhaps spending several million dollars on inventory.
Beetz noted that the Nautica fragrance business is strong in the U.S. with an “echo” in Europe and Asia.
Denise V. Seegal, president and ceo of Nautica Enterprises Inc., said she is excited to be in partnership with a company that has such “an incredibly talented executive team” that has exhibited such insight into the “consumer’s needs and aspirations.”
“Coty’s momentum over the last couple years has been quite extraordinary,” said Seegal. “They have done a wonderful job of positioning different brands across the marketplace.”
Despite industry speculation that Nautica’s unique lifestyle position in fashion might allow Lancaster to create a new model that straddles distribution layers within the department store market, Seegal absolutely ruled out any flirtation with “masstige” marketing. “The Nautica brand has been positioned across all product categories in the better status market. The positioning is in the better department store channel.”
Seegal noted that many of her competitors have dipped into the mass market but that usually is due to “the life cycle” of the brands.
In a statement, Seegal added, “Coty is a global leader with a stellar track record of launching and maintaining very successful branded fragrances. We feel confident that they are the right strategic partner for Nautica. As we continue to extend the Nautica lifestyle brand around the world, Coty’s global reach and understanding of international markets is very important to the success of our own long-term global growth strategy.”
For his part, Beetz said in a statement, “Nautica embodies many of the qualities that we seek as a company: Momentum that allows us to bring products to market faster; creativity that matches our consumers’ desire for expressions of their own freedom, and a determination to take our ideas further and further for success.”
Although Seegal indicated that she was drawn to Coty because of its “good fit,” Unilever implied that the brand no longer matched its interests. “We elected not to renew the Nautica license,” said Laura Klauberg, senior vice president of marketing for Unilever Cosmetics International, on Thursday. “We informed Nautica a few months ago that we had made that decision, primarily because we are looking to develop our fragrance portfolio with brands that have a broader global reach. Nautica has appeal in the North American market but it has limited appeal globally. We had a very successful 2004, so we believe that this strategy is really working.”
Klauberg also firmly denied that Unilever is looking to divest its other prestige fragrance brands, which include Vera Wang and Calvin Klein. “We are not looking to sell any of our other brands at this time,” she said. However, the company also divested the Valentino beauty license in 2003 to Procter & Gamble.