By  on June 10, 1994

NEW YORK -- Michael Stern still has the instinct.The man who helped build the Oscar de la Renta business into a pinnacle of prestige fragrance marketing in the Eighties is back with a different task.He is now attempting to rebuild the Gucci fragrance business in America after becoming the distributor of those brands last October. The Muelhens Group of Cologne, Germany, is Gucci's worldwide licensor.The first thing Stern did was replace the brand's sales reps with three regional managers in Washington, Chicago and Los Angeles. He also added 10 or 11 account executives.Stern then began reshaping distribution and putting together a fall promotional program as the first step in building retail partnerships."My principal interest is in developing credibility," he said. "I plan to merchandise like I did in the old days with Oscar, with attention to detail and attention to the beauty advisers."It's a sleeping giant, in my opinion, and just needs to be cleaned up," Stern added, referring to his belief in the magic of the Gucci name.He pointed out, however, that his work is cut out for him. "Retailers have been burned by mass distribution and there's been a lack of service," he noted.But in recent months, Stern has gone from store to store, showing his fall program and talking service. "They understand what we are trying to do," he said, "and the attitude is much more favorable."Three fragrances make up the Gucci stable: Gucci No. 3, a 1985 women's fragrance; Gucci Nobile, a 1988 men's scent, and Eau de Gucci, a lighter, more affordably priced women's item launched last September.The Gucci No. 3 line consists of 15 items, with prices ranging from $36.50 for a 1-oz. eau de toilette splash to $228 for a 1-oz. perfume. Gucci Nobile has 10 items, ranging from a 1-oz. eau de toilette spray for $29.50 to a 4-oz. splash for $54.The price points of Eau de Gucci's four fragrance items start at $30 for a 1.7-oz. eau de toilette splash and rise to $45 for a 3.4-oz. spray.Industry sources estimate that Gucci Nobile has a wholesale volume of $5 million, Gucci No. 3 $4 million and the underdeveloped Eau de Gucci $1 million.Muelhens plans to launch a new Gucci women's fragrance in 1995, Stern said, and another men's entry the following year.Stern has been concentrating on slicing distribution from the 3,000 doors he inherited. He has managed to cut the door count by a third, to 2,000."We can get it down to 1,500-1,750," he said, adding that while cutting away some distribution he is also seeking to add some quality stores, such as May Department Stores Co. "We're not in Boston and we're not in Florida," he said.An exception to this is Eau de Gucci, which was launched in September while Stern was negotiating with Muelhens. As a result, distribution only grew to 300 to 400 doors. "There was never really a follow-through."At the heart of his distribution is Dillard Department Stores Co., Foley's, Carter Hawley Hale and Carson, Pirie Scott & Co.Stern's overall strategy is to build an in-store presence with counter displays and a continuation of merchandising gift sets and staging gift-with-purchase promotions, while pulling in business with direct mail pieces."We're primarily a promotion-driven business with gift sets and [gifts-with-purchase]," he said.Stern also set out to upgrade the presentation. "What we are looking to do is establish a personality for each brand under a Gucci umbrella," he said, noting that the promotional merchandise and materials were designed to project a certain look for each scent. For instance, he described Gucci No. 3 as "more serious, more mature."In addition to doing product-oriented gwp's and gift sets for Mother's Day and Father's Day, Stern has put together an "Enter the House of Gucci" counter promotion that will first appear in August and September. The product gwp's will be contained in boxes designed to be stacked as if forming columns of marble. The boxes will be on counters and topped with arches designed to resemble a roof.In September, a spark will be added by mailing out roughly three million scented remittance envelopes. "We will have very limited advertising for the next year or two, so we can concentrate on direct mail," Stern said."Direct mail always pulls well," he said, adding, "It gets the fragrance's name across and builds the franchise."

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