By  on February 4, 2005

NEW YORK — The fragrance industry got a big present at Christmas in the form of a huge sales gain.

The December sales gain was massive enough to save the entire year, putting the women’s business into the plus column for the first time since 2000, according to Timra Carlson, president of NPD Beauty, a division of the consumer tracking firm. Carlson analyzed last year’s results during a forum held at the Metropolitan Club here on Monday, titled “Hot Off the Press.” The session was sponsored by NPD and the Fragrance Foundation.

In women’s fragrances, the December business showed a 6 percent jump in dollar terms, while men’s advanced by 4 percent.

That December leap salvaged an otherwise dismal year. For the first 11 months, women’s fragrances were flat and men’s were lagging by 3 percent. But once December was added, for the full 12 months, women’s showed an overall gain of 2 percent and men’s stretched to practically flat at minus 0.8 percent.

Overall, celebrity fragrances were hot and newness continued to rule, Carlson noted, adding that without the new fragrances, the business would have been 13 percent down. However, “consumers still bought some classic brands,” Carlson said, pointing to Chanel No.5 and Giorgio Armani’s Acqua di Gio for Men. She added that one bright spot was the ‘solid performance” of basic business — single bottles of fragrance — in both men’s and women’s. Gift sets fared unevenly with women’s gaining by 2 percent and men’s falling 6 percent.

The results are key since the December business accounts for 30 percent of annual fragrance sales.

As an aside, Carlson pointed that the entire U.S. beauty business, including hair, has grown to $40 billion, picking up $2 billion in the last two years. Those figures do not include travel retail, which would add another $1.5 billion to the U.S. total. The growth during the last two years came mostly from specialty store chains, TV shopping channels, warehouse clubs and the Internet.

Department stores still contributed $8 billion to the total last year, which represented a 4 percent gain in dollars and a 1 percent increase in units.Later in the program, Carlson led a panel discussion that included Alison Slater, director of brand marketing at Sephora; Bob Briddon, group vice president of U.S. marketing at Avon Products, and Barbara Zinn Moore, senior vice president and general merchandise manager of Lord & Taylor.

Sephora had a strong December with comp-store gains of 14 percent in women’s and 7 percent in men’s. “The celebrity trend is booming,” agreed Slater.

Avon rolled the dice with a high priced $30 fragrance from Selma Hayek. But the fears of price resistance proved unfounded. “it was a huge success for us,” said Briddon, adding that the launch added $15 million at retail for the fourth quarter.

“There’s no question that newness still works,” said Zinn Moore, who added that celebrity is the hot ticket. That was underscored by the huge push that the Nicole Kidman advertising gave Chanel No.5. “The red carpet is more important than the Oscars themselves,” she said. “No one remembers if J.Lo won an Oscar. But everyone remembers the green Versace dress.”

Zinn Moore asserted that the business will not grow if manufacturers continue to trudge through the same routine, even with a groundswell of new product launches. “Someone has to have the courage to break the mold and reenergize the industry,” she said, adding that in-store support is critical.

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