NEW YORK -- Just one month after Coty absorbed Quintessence, its sister company, the fragrance powerhouse has laid the groundwork for building on its newly expanded business.
According to Jerry Abernathy, Coty's president and chief executive officer, the mass market leader has these plans for growth this year:
Increasing advertising budgets for brands in the Coty and Quintessence stables. Spending will be up as much as 300 percent for some fragrances.
Phasing out unprofitable brands, among them Dare, Caliente and Jovan Musk 2.
Launching two women's fragrance before Christmas. Details for the introductions, including product names and shipping dates, have not been completed, Abernathy said.
He predicted Coty's strategy would boost its sales by about 15 percent to $430 million at wholesale, pending the success of the two launches and maintaining the momentum with existing brands. "The reason behind the merger was to be able to truly invest media dollars behind the Quintessence brands," Abernathy said, referring to the decision to join forces. The move was initiated by Joh. A. Benckiser GmbH of Ludwigshafen, Germany, owner of both companies.
"Quintessence did not have the resources to execute and sustain advertising," Abernathy added.
The agreement, which was enacted Jan. 1, combined the two companies' administrative, research and development and marketing departments. "The savings generated by this streamlining will be reinvested in advertising," Abernathy said. "This was not a cost-savings move."
"I think this will be a good thing for Quintessence," said Sherri Ralston, cosmetics and fragrance buyer for PayLess of Wilsonville, Ore. "Quintessence hasn't been able to give its brands a lot of support, and now that Coty has taken them under its wing they can really strengthen the brands."
The newly combined operation, which carries the Coty name, is maintaining separate sales forces. "The reason for having two is primarily to balance the power and the workload of all of our brands," Abernathy said. "This way we can better focus on service to our retailers. We also now have two viable launch platforms, so we can have two major women's introductions in the same year."Sean Greene, who was vice president of sales for Quintessence, is retaining his title for the new Quintessence group. The brands under his charge are the Jovan Musks for men and women, both White Musks, both Aspens and Adidas from Quintessence, as well as Coty's Gravity, Sand & Sable, Tribe and Iron.
Jim McDougald, who was vice president of sales for Coty and will perform the same function for the Coty group, will oversee Stetson, Preferred Stock, Lady Stetson, Stetson Sierra, Exclamation, Emeraude, Vanilla Fields, Truly Lace and Le Fleur.
Each group will be in charge of one of the upcoming women's launches, Abernathy said.
One of the first steps Coty is taking with the former Quintessence brands is to beef up the advertising behind the strong sellers and to weed out the weaker ones.
Jovan Musk 2, a Quintessence men's fragrance launched last fall, has been pulled from the shelves, along with 1989's Dare. In addition, Caliente, introduced in 1992, will not be supported with advertising and its inventory will be allowed to sell out.
Coty will continue to back Adidas with in-store promotions, Abernathy noted, but not with media dollars.
The remaining Quintessence fragrances -- the Jovan Musks, the Aspens and the White Musks -- will be supported with $20 million worth of advertising this year, a 300 percent increase from 1993, when Quintessence spent $5 million on those brands.
"We are shopping around for an ad agency right now to put together new campaigns for these brands," Abernathy said. "Our goal is to break ads for the women's fragrances by Mother's Day, and for the men's brands by Father's Day. Everything will definitely be in place before the Christmas selling season."
Abernathy projected that the increased advertising budgets would boost combined sales of the Jovan Musk scents by 17 to 18 percent, pushing wholesale volume to $40 million.
The Aspen scents are expected to show increases of up to 18 percent, meaning a wholesale volume of $30 million, while White Musk sales should increase about 5 percent, to $18.5 million.
"We are really putting the bulk of the advertising behind the Jovan Musks, since they have the strongest consumer base," Abernathy said. "If our efforts are successful, we will then increase our support behind the White Musks." The classic Coty fragrances will also be helped by bigger ad budgets.The company is spending $25 million on the Stetson brands -- Stetson, Lady Stetson, Preferred Stock and Stetson Sierra -- a 25 percent increase from last year's $20 million. Abernathy said much of the boost will go to adding power behind Stetson Sierra, the men's fragrance launched last year.
Abernathy anticipated the Stetson brands will have sales increases from $125 million to $134 million this year, a seven percent jump.
Coty has also been riding a wave with Vanilla Fields, which salvaged many a retailer's Christmas in 1993.
The brand was launched last year with a mere $2.9 million in advertising. This year, media support is more than doubled, to $7 million, with a television campaign expected to break for Mother's Day. Last year the brand was backed only by print ads.
When Coty introduced the brand last year, the company thought it would be more of a niche player than a fragrance powerhouse, Abernathy stated. In fact, initial wholesale projections were less than $10 million.
As it turned out, the brand more than doubled that, Abernathy said, projecting Vanilla Fields will have a wholesale volume of $30 million this year. "We just didn't see any mainstream potential in it," Abernathy said. "But it did better than our wildest dreams."
"Vanilla Fields is so hot, we can't keep it in stock," added Gina Russo, cosmetics and fragrance buyer for The Rx Place in New York. "It's been even stronger than we could have hoped for."
"Vanilla Fields was our number-one-selling item at Christmas," agreed Ralston of Payless. At a recent retail conference where mass vendors were criticized for a weak group of new fragrance introductions, Coty was praised, particularly for Vanilla Fields. "I commend Coty for the continued support they have given their brands," said Steve Lubin, divisional merchandise manager for Cosmetics at Walgreen's. "Vanilla Fields surpassed all expectations for us last year."
Mary Prince, fragrance buyer for Kmart, also had high marks for Coty's launch, saying, "Vanilla Fields was our most popular new fragrance of 1993.
"If a company doesn't support new brands, then the results will be less than favorable," she added, citing Coty and Quintessence as strong supporters of their products. "National TV advertising is the premier vehicle to move products, and Coty is the leader in this area."Because of the brand's enormous success, the company is no longer underestimating the power of vanilla.
"We are looking to expand the concept with other executions," Abernathy said, referring to Coty's two upcoming introductions but giving no details. "We will have something ready later this year."
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