By and  on November 2, 2007

New York & Company Inc. is the latest specialty apparel retailer climbing onto the beauty bandwagon.

The company will launch a line of bath and body care products on Nov. 15 called City Beauty, which was developed with Inter Parfums Inc., the same company that produces personal care products for Gap Inc. and is the fragrance licensee for Quiksilver. When those initiatives are added to the fragrance and bath line recently unveiled by Ann Taylor, it is clear a growing number of retail specialty chains are eager to tap into the market dominated by department stores and chains such as Sephora and Bath & Body Works.

Ironically, these apparel stores are adding beauty to their offerings even as one of the legendary apparel retailers — Leslie Wexner's Limited Brands Inc. — is exiting fashion to focus on personal care and beauty via its BBW and Victoria's Secret Beauty operations.

"Our customer is spending money on these types of products somewhere else and we would like to get some of that business," said Richard P. Crystal, chairman and chief executive officer of New York & Co. "We feel this could be a major business."

He added, "We have to treat it like it is positioned to be a big business if we want it to be successful."

Crystal said the company did extensive research into the beauty market, even utilizing focus groups, and studied the preferences of its customers. "We thought it was a natural extension for us. We thought bath and body would be a better direction. We wanted to build a repeat business with a repeat customer."

None of the executives would comment on sales projections, but industry sources estimate the new line could generate $10 million to $15 million in retail sales for the first year. New York & Co. in total does about $1.2 billion annually.

Asked if the initial launch might lead to further forays into the market, such as venturing into color cosmetics, Crystal replied, "We might do lip gloss."

"We're just testing the waters," added Leslie Goldmann-Franco, the company's executive vice president and general merchandise manager.

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