As fragrance marketers gear up for the holiday season — when the industry generates about 60 percent of its sales for the year — months of declining consumer confidence are creating a challenging environment, panelists at a Fragrance...
NEW YORK — As fragrance marketers gear up for the holiday season — when the industry generates about 60 percent of its sales for the year — months of declining consumer confidence are creating a challenging environment, panelists at a Fragrance Foundation state of the industry luncheon said Wednesday.
Still, there is a bright spot: While consumers' "willingness to spend is somewhat off due to consumer confidence numbers," said panelist Lynn Franco, director of The Conference Board Consumer Research Center, their "ability to spend is still intact" thanks to low unemployment and the addition of jobs since the summer.
The Consumer Confidence Index slipped to 95.6 — the lowest reading since hurricanes Katrina and Rita two years ago — from 99.5 in September. However, employers added 166,000 jobs to payrolls in October, about double economists' expectations, and the unemployment rate last month was unchanged from September at 4.7 percent.
"Personal income growth is the silver lining," said Franco, who was joined on the panel by equity analyst Christopher Ferrara, who is senior director at Merrill Lynch; Gilbert Harrison, chairman and chief executive officer of Financo Inc., and moderator Darby Dunn, who is a reporter with CNBC.
Harrison noted that unseasonably warm weather, which has been seen this fall, "affects results" and "retailers are cutting fourth-quarter forecasts due to the weather."
Macy's Inc., the nation's largest department store chain, said Wednesday its same-store sales for the fourth quarter could range between a 2 percent decline and a 1 percent increase, totaling $8.7 billion to $8.9 billion. For the year, sales are projected to fall by between 0.3 percent and 1.3 percent, or $26.4 billion and $26.6 billion.
Despite the sobering data, Harrison is optimistic. "The National Retail Federation is talking about a 4 percent increase in sales, but I think it will be more," he said. "The consumer is optimistic. They like to spend."
Dunn pointed to a recent poll that said 72 percent of 1,000 consumers surveyed said they would spend the same this year as they did last year, or about $1,100. Furthermore, 42 percent of them said they would spend for a fragrance.
Hermès is launching a Laundromat pop-up shop in NYC - dubbed Hermèsmatic - where customers can bring their old scarves to be dip-dyed by an expert. Get all the details on WWD.com. #wwdnews (📷: @donstahl)