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."
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