By  on January 21, 1994

NEW YORK -- When Elf-Sanofi SA of France acquired Yves Saint Laurent Parfums last year, the move abruptly transformed its U.S. subsidiary, Sanofi Beaute Inc., into a major player in the American fragrance market.

Now Sanofi Beaute has entered the new year with an armload of launches, including the U.S. debut of YSL's controversial Champagne, aimed at further enhancing its roster of core brands.

At the same time, Sanofi is making its final moves in the takeover of YSL's $50 million U.S. fragrance and cosmetics business, the acquisition of which pushed Sanofi's volume to $200 million.

By March 31, the firm expects to have moved YSL's distribution operation into Sanofi's more than 200,000-square-foot facility in Edison, N.J. That will cap a 10-month drive in which YSL's fragrances, including its 1977 mainstay, Opium, were integrated into Sanofi's European fragrance division.

A year ago, Sanofi had created separate marketing and sales forces for its European and American brands after acquiring Nina Ricci's U.S. business.

As part of the latest takeover, Sanofi sprouted a cosmetics division by pairing YSL's Beaute cosmetics and treatment division with Ricci's equivalent -- the fledgling Le Teint line.

"We are a major force in the prestige fragrance arena," said Lawrence J. Aiken, president and chief executive officer of the American subsidiary.

But where there is expansion, there is also contraction. As a byproduct of these reorganizations, the company has begun weeding out weak performers, yanking Stendhal from specialty and department store distribution, even though it continues as a viable brand in the rest of the world, Aiken noted.

He declined to give specifics, but the Stendhal business in the U.S. has been estimated at $7 million to $10 million wholesale. Aiken indicated, however, that the cosmetics and skin care brand simply could not attain profitability.

"At that volume level," he said, "it's difficult to be profitable at the operating margin level, just because of the sheer expense of that type of business versus fragrance." Aiken also cited a number of smaller volume lines that could eventually be eliminated: Oscar de la Renta's Pour Lui men's fragrance, Perry Ellis for Men, and YSL's Y and Rive Gauche women's scents and Jazz men's fragrance, as well as Nina Ricci's male Ricci Club.

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