Ferragamo Sets Course for Strong Season

Two years after restructuring the fragrance division in an effort to increase sales, Ferragamo executives said the strategy has doubled scent revenues.

FLORENCE — Two years after restructuring the fragrance division in an effort to increase sales, Ferragamo executives said the strategy has already doubled scent revenues.

And the family-owned fashion house isn’t resting on its laurels: After unleashing a slew of launches and bringing its fragrance distribution back in-house early this year, the firm is on track for a strong year, said Luciano Bertinelli, parfums division director of Ferragamo Parfums.

Fresh from reviewing the division’s second-quarter 2005 figures, Bertinelli confirmed the company’s results had exceeded expectations in an interview at the company’s headquarters here.

In the first six months of 2005, Ferragamo Parfums more than doubled sales compared with the same period in 2004, which Bertinelli credits to the success of the new Emanuel Ungaro fragrance Apparition and Ferragamo’s one-shot scent, Incanto Dream. The company had particular success in the Middle East, France, Japan and the U.S. — where sales spiked 65 percent in the first six months of 2005 compared with the same period in 2004, he said. Bertinelli added that the division now aims for a 50 percent increase in sales over 2004, when retail sales totaled 30 million euros, or $36.3 million at current exchange.

Apparition, the latest female fragrance offering by Ungaro, had “outstanding results” in the Middle East, France and the U.S., according to Bertinelli. However, he added that fragrance and others in the Ferragamo portfolio hadn’t done so well in Asia. The only bright spot in the region was Japan, where Incanto Dream pulled in “extraordinary results,” said Bertinelli, adding that 400,000 units of the fragrance were sold between January and the end of June 2005.

“We are not happy with Asia, but there is room to grow — and, most important, there is space to grow there,” he said.

Growth was also viable in the Caribbean Duty Free market, said Bertinelli, adding that the company would present its fragrances to Latin America later this month.

The company has recently entered the Chinese market, and is hoping sales will be leveraged by its already strong fashion presence there. The fragrances, starting with Incanto Dream, will be distributed in 30 Salvatore Ferragamo boutiques in addition to 60 doors in department stores by October.

This story first appeared in the July 15, 2005 issue of WWD.  Subscribe Today.

Another emerging market Ferragamo Parfums is eyeing is India. The company entered several department stores in July last year and will increase points of sales to 40 doors by November.

“China and India are two markets we are focusing on. At the same time, we consider Japan a fundamental market for Ferragamo Parfums,” said Bertinelli.

The company has solidified a launch strategy for 2006, kicking off with another one-shot fragrance under the Incanto brand. The still-unnamed scent will be launched in October at the Cannes Tax Free World Association trade show, then will roll out to doors in Italy and Japan in January 2006. Globally, additional doors will get the fragrance in March.

Bertinelli said the new one-shot would be tested against Incanto Dream, and the fragrance with the lower number of sales will be pulled from the market. He added that Incanto Dream would remain in the U.S. and Japanese markets, no matter which fragrance triumphs in the global race.

A signature women’s Ferragamo fragrance is slated to launch in September, which Bertinelli said would become the cornerstone scent of the Ferragamo Parfums portfolio.

In addition to these fragrances under the Ferragamo brand, Ungaro will launch two one-shot scents next year. The first, a women’s summer fragrance, Apparition Sun, will launch in March 2006, followed up by a Christmas edition of Apparition.