MILAN — Emerging from one of its worst spells in memory, Italy’s beauty industry is attempting to innovate its way back to prosperity.
Some of Milan’s leading retailers, including La Rinascente, Mazzolari and Gruppo Coin, plan to open new floors, departments or concept stores devoted largely to niche perfumery. Meanwhile, Intercos, the industry’s premier color cosmetics supplier, is flirting with the prospect of going public in 2014.
“I think that the perfumery channel of distribution is realizing finally there’s a different way to run business,” said Fabio Franchina, president of Unipro, the Italian association of cosmetics companies.
Italy’s perfumery segment registered a 0.7 percent gain to 2.26 billion euros, or $3 billion at average exchange, in 2010 after a couple of years of losses. The domestic improvement primed the pump for Italy’s export machine, which soared 17 percent on-year to 2.39 billion euros, or $3.17 billion. Exports to Hong Kong, for instance, spiked 54 percent.
“It’s the intelligent way to enter China,” said Franchina. “More than 200,000 people come from China to Hong Kong to shop daily.”
On the eve of opening its 13,993-square-foot store — including a 3,767-square-foot perfumery — in Rome’s main train station, Paolo Valerio, Gruppo Coin perfume and cosmetics manager, discussed future openings. Slated for August on Milan’s Corso Vittoria Emanuele on the site of a former cinema is Excelsior. Valerio described it as a boutique, concept and department store hybrid. It should include a corner of “emerging” brands, such as Aesop, Kiehl’s and Organic Pharmacy, and a brow bar, which he called the first of its kind in Italy. There’s also to be an “olfactory” fragrance bar featuring a large selection of niche brands “to give character to the perfumery,” said Valerio.
Such concepts are meant to continue fueling Coin’s strong growth. In 2010, its perfumery business registered a 15 percent gain, while the rise was 5 percent on comparable-store basis.
Expanding on its high-end niche concept, Mazzolari is building a nearly 4,305-square-foot addition to its 17,222-square-foot store, devoted entirely to the category. Scheduled to open in September, it’s one floor under the main retail space and has a turn-of-the-century perfumery feel. Antique cabinets line walls and will stock “brands with history” such as Amouage, Cartier and Tom Ford, according to Augusto Mazzolari, founder of the perfumery chain.
Antonella Mandelli, general manager of Mazzolari, in discussing the selection of niche brands, explained it’s not just about their having a limited distribution, but “they need to have class.”
Mazzolari likened today’s perfumeries to fruit and vegetable sellers. “The idea is to do something different,” he said.
Also hot on the trail of something different is La Rinascente, which is revamping its beauty area for later this year with the addition of organic and natural skin-care brands plus niche fragrances among products to meet the ever more sophisticated consumer. One such initiative is the introduction of Tom Ford’s 80-unit makeup collection — an extension of his lipstick line — which will be the department store’s exclusive for Italy most likely starting in October.
Talking about the evolving retail experience, Celso Fadelli, founder and chief executive officer of Intertrade Europe Group, said, “People are changing the way they buy. Consumers consider shopping more of an experience than just using their credit card.”
Fadelli has been introducing new retail concepts. He opened a 2,368-square-foot store in Modena in December. It takes a similar selling strategy as that of his Avery Fine Perfumery in London, which is fitted out like an apartment and downplays branding.
“Niche is no more than 5 percent of normal perfumery. What is interesting is that the space is growing,” said Fadelli, adding major names are trying to elbow their way into the segment.
He ticked off numerous department stores devoting more space to niche fragrances, including Liberty, House of Fraser and Selfridges in the U.K.; France’s Printemps, and Japan’s Isetan and Takashimaya.
When asked why so many small brands fail to flower, Fadelli said, “the missing part is investment.”
He is adding Sweden’s Agonist to his beauty portfolio.
Coming up on March 31 is the third edition of Esxence, a niche fragrance trade show Fadelli organizes with Silvio Levi, owner of Calè Srl, that is gaining traction fast. Last year, it drew in excess of 4,000 visitors from more than 30 countries. “We are expecting more this year,” said Fadelli.
Also putting on its annual show was Intercos, which opened its trend forecast on March 15 at company headquarters in Agrate Brianza, Italy, outside of Milan. With a 40th anniversary coming up in 2012, Intercos turned to its roots by framing its presentation with vibrant colors. For the first time, Intercos showcased a new technology, called Prisma Shine, said to be a next-generation powder giving pure, luminous color.
On Intercos’ radar is a possible public offering in Milan in 2014, according to Dario Ferrari, the company’s founder and president.
“I’d like to keep control of the company,” he said.
Meantime, Intercos aims to generate sales of about 345 million euros, or $487.4 million at current exchange. Last year, revenues gained 20 percent to 245.2 million euros, or $325.6 million at average exchange, driven by restocking and new products.
“Last year was very good in terms of numbers; it was almost back to 2008 levels, which was the best year ever,” said Ferrari.
For 2011, Intercos’ sales target is set at 280 million euros, or $395.6 million. Ferrari said international business can help spur growth. In Brazil, Intercos’ new production facility near São Paulo is expected to be operational in six months.
China’s another key frontier. In its trend presentation, Intercos featured a budget-priced cosmetics line targeting that market.
“We need to compete with the local brands,” said Ferrari. “We want to be a little bit Chinese.”
He said the overall game has altered.
“The recession changed the rules,” said Ferrari. “We need to keep innovation but have to focus on cost. We want to be fast and cost-effective. Speed is becoming more and more important.”
A case in point: Intercos expanded its Ready to Go offer, a line of 80 makeup solutions for regional beauty needs.
Following Intercos’ acquisition of Vitalab, a biotechnology concern, Ferrari plans to sell active ingredients to large corporations.
“They’re not interested in [buying] creams,” he said. Ferrari hinted at a development of a serum involving plant stem cells.
While other companies continue to churn out new products, Euroitalia is determined to capitalize on the rollout of its Vanitas by Versus women’s fragrance. Giovanni Sgariboldi, company president, said Euroitalia’s sales grew between 38 percent and 39 percent in 2010.
“Growth last year didn’t come from new products but by new markets growing and improving,” he said.
Sgariboldi is also launching the Moschino Forever men’s scent. But during an interview at company headquarters in Cavenago, Italy, he seemed contemplative on how to protect the new Versus fragrance from the market’s hurly burly.
“We don’t want to burn the Vanitas launch. We need to give it time before launching new products,” said Sgariboldi. “We want to slow down despite great sales last year.”
He underlined his company’s success comes from lines remaining on the market rather than flankers.
Building on the momentum of D-Squared fragrance collections, Roberto Martone, president of ICR-ITF, said the brand will launch a men’s scent in September. Also this year, Martone is set to introduce a men’s and a women’s fragrance under his new Trussardi license.
Martone said sales at ICR-ITF grew about 30 percent last year after registering a loss of approximately 12 percent in 2009.
Gaining ground, as well, is 13-unit niche skin care brand Bakel, of Udine, Italy, which will introduce its first eye cream, Cool Eyes, at Esxence. Bakel came out with Oxyregene — its first cream — two months ago, and it’s now the company’s best seller.
Bakel is carried in 200 doors worldwide and in 2010 generated 450,000 euros, or $597,550 at average exchange.
“I think this year we will close at 1 million euros [or $1.4 million at current exchange],” said Raffaella Gregoris, Bakel’s co-founder.
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye