By  on July 1, 2005

NEW YORK — Procter & Gamble is making the first moves today in its long quest to achieve dominance of the global fragrance business.

As long anticipated, P&G Prestige Beauty and Cosmopolitan Cosmetics, which was part of the Wella acquisition, are officially being fused into a new operating unit, P&G Prestige Products, with the Geneva-based executive Hartwig Langer remaining at the helm as global president. Meanwhile, P&G also has dropped four businesses that don't fit the master plan: Toni & Tina, Trussardi, Charles Jourdan and Yohji Yamamoto, whose Tokyo-based company said it had ended the license. The design firm said it "has decided to explore strategic alternatives with respect to the distribution and sale of its fragrance brands." That could mean either licensing out Yohji's beauty brand manufacturing and distribution again or taking its production in-house.

Today's moves by P&G were foreshadowed during a recent interview with Langer at the Cosmopolitan offices in Manhattan. Clearly, the editing of the four brands was part of the P&G mantra to look for "brands with big global potential, regional star brands or potential growth engines," as a spokeswoman said.

P&G identifies its global fine fragrance — purely juice — as approaching $2 billion in worldwide sales, putting it behind market leader L'Oréal. "Our aim and vision and objective is to become the best fine fragrance company in the world," Langer stated.

P&G executives declined to stipulate how distant the goal is or how long it will take to reach. Considering the hypercompetitive environment of today's fragrance market, it certainly will be challenging. L'Oreal is not resting on its oars. In the U.S. alone, L'Oreal had a 19 percent share of department store sales in 2004, according to NPD Beauty, compared with 8 percent for P&G. According to sources, L'Oreal aims to cross the 20 percent mark within the next year, pushing sales from $540 million to over $600 million.

Langer's first boss at P&G was Bernd Beetz, who is now a prime competitor as the head of Coty Inc., another contender for the top spot. When asked recently why he bought Calvin Klein and the rest of the Unilever fragrance business, Beetz retorted, to become "the world fragrance leader."

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