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NEW YORK — A week before Christmas, the department store fragrance business was hanging on a hope and a prayer. And those prayers were answered — at the last minute. “I don’t know how much more last-minute the business could have gotten, short of customers not showing up at all,” said one department store executive.
The fragrance category, which had been dragging through negative numbers in mid-December, rallied on Dec. 23 and 24 to produce what is widely seen as a flat to slightly up December season. Salvation was provided by a handful of winners, both red-hot celebrity scents and the stalwart classics.
Curious Britney Spears, launched in September, was the undisputed holiday winner among the celebrity entries, drawing unanimous praise from U.S. department store retailers. Perennial bestseller Chanel No.5, always a strong holiday draw, was further buoyed by a new advertising campaign featuring Nicole Kidman — and Elizabeth Taylor’s White Diamonds, released during the last star fragrance blitz in the Eighties, ranked in Federated Department Store Inc.’s top 10 for December. Classics such as Donna Karan Cosmetics’ Cashmere Mist, Giorgio Armani’s Acqua di Gio Pour Homme, Estée Lauder’s Beautiful and Thierry Mugler’s Angel also proved that customers like what’s familiar.
The women’s fragrance market strongly outpaced the men’s fragrance market in December, something that surprised few executives; in general, the men’s market generates half the sales of the more robust women’s market. Still, over the past several years, sales on both sides of the scent aisle have been lackluster, despite a flood of newness that has threatened to consume existing favorites, not to mention other departments’ floor space.
A top department store executive, who wished to remain anonymous, noted that Chanel’s beauty business was “off the charts” chain-wide, while Curious Britney Spears, DKNY Be Delicious and Armani’s Acqua di Gio Pour Homme were “blockbusters for us.” That particular lineup of fragrances made the best-seller list of nearly every U.S. retail chain, in fact. The executive noted that Paris Hilton’s scent, on counter for less than a month, was also trending well in stores.
“Christmas was a cliff-hanger,” said Howard Kreitzman, vice president and divisional merchandise manager, cosmetics, for Bloomingdale’s. “The strength of the business in the final two days was significantly better than I expected, particularly on Christmas Eve. The 24th is always a shorter business day, but this year, in dollar volume, it produced close to as much business as the 23rd. That’s out of character. And we were a bit concerned about the week after Christmas, but it was nothing short of fabulous — it seemed like there was a lot of gift card redemption. Overall, the month ended far better than we thought it would.”
“We had an outstanding December, and the last two days were crucial to our success,” agreed Thia Breen, executive vice president of cosmetics for the Federated Merchandising Division. “In fact, our most productive day was Christmas Eve — which wasn’t a surprise, as we did day-by-day projections for December at the beginning of the month. Doing significant business in the last two days isn’t for the faint of heart, but we did expect that. For a lot of customers, that last-minute shopping frenzy has become part of their Christmas tradition.”
Maria Ianni, an account manager for NPD Beauty, a division of market information company The NPD Group, said that preliminary December numbers showed Chanel No.5, Estée Lauder’s Beautiful, Acqua Di Gio Pour Homme, Ralph Lauren’s Romance and Britney Spears’ Curious to be the top sellers for the week of Dec. 19-25. “As predicted, December continued to remain the key make-or-break month for the fragrance industry,” said Ianni. “Despite the celebrity craze that helped bring much-needed momentum to the category, preliminary numbers showed that, as a whole, this momentum was not able to turn around the category overall. With skin care and makeup gaining momentum within the beauty category, fragrances continues to fight for market share as well as for the consumer’s attention in this overwhelming arena.”
While Ianni had received only preliminary sales figures for December at press time, she noted that the trend seemed to be toward “flat to very slightly up sales.”
Breen said the scent category saw double-digit increases at Federated in December, with standouts being Curious Britney Spears, Chanel No.5, DKNY Be Delicious and Donna Karan’s Cashmere Mist for women, and Armani’s Acqua di Gio Pour Homme on the men’s side. Overall, Chanel’s fragrance portfolio aside from No.5 also racked up impressive sales for the holidays, said Breen.
Breen continues to be bullish on the market influence of celebrity fragrances. “Celebrities were key drivers of holiday sales,” she said, adding that core classics were the other major sales driver for the holidays. “Britney was unbelievable, Donald Trump is doing very well for us [and] we’ve done well with True Star [the Tommy Hilfiger scent headlined by Beyoncé Knowles]. Elizabeth Taylor’s White Diamonds continues to rank in the top 10. We got Paris Hilton’s fragrance in at the [tail] end of the selling season, and it’s doing very well. And, while Chanel No.5 always is a very strong seller, Nicole Kidman’s ads helped drive incredible double-digit growth for the brand. Celebrities add newness to the category.”
Breen is looking forward to launching an impressive portfolio of scents this spring, including Kenneth Cole Reaction for Women (whose male counterpart continues to perform very well, she added), Prada, Max Mara, Armani Black Code for Men, DKNY Be Delicious Men, the Tommy Bahama masterbrand and new Liz Claiborne Cosmetics entries. And Breen also is planning to add a slew of summer scents to the fragrance bar. “Customers love them,” she said, adding that she doesn’t find that the limited-edition juices confuse fragrance customers. “They energize the fragrance bar and have become a very strong trend for us.”
Bloomingdale’s Kreitzman noted that brands ranking well in his doors before the holidays held their ranks, for the most part. “The things that were good before the holidays were still good during the holidays, and got stronger at the end. The weak parts of the market were still weak — there was nothing that suddenly took off. There was the traditional holiday shift in the business to the more classic fragrances, which are generally popular for gift-giving.” Those juices included Chanel No.5 and Mugler’s Angel. Newer scents racking up significant sales included Prada, DKNY Be Delicious and Narciso Rodriguez on the women’s side, while the men’s side saw strong sales from Burberry Brit for Men, John Varvatos and Sexual, he said. As well, gift set purchases “kicked in at the very end.”
But it’s a mistake to believe that December sales were only about gift-giving, said Kreitzman. “There seemed to be an awful lot of ‘one for me, one for you’ purchasing going on in December,” he said.
Snow — and other forms of weather — did a job on some retailers’ sales.
“We ended up with an increase in the midsingle digits,” said Gary Borofsky, senior vice president of cosmetics and fragrance for Rich’s-Macy’s. “We got hurt by the storm in the Ohio Valley, which hit 72 hours prior to Christmas — that cost us a chunk of change — but we still had a good result. We were pleased, but it could have been even better without the weather impact. It would have been interesting to see how high it would have been if we had not been hit with weather.”
Of the “classics,” Borofsky added, Chanel No.5 was the number-one brand at the fragrance bar. “The newness — Curious Britney Spears, Be Delicious, the volume they did — far exceeded our expectations,” he added. Like other retailers, Borofsky pointed out that it wasn’t just new launches that drove the business. “It was a good mix of core and new,” Borofsky said, noting that Acqua di Gio, Cashmere Mist and Ralph Lauren’s Romance performed well.
Despite gains in the fragrance department, there were some challenges, according to Borofsky. “The Estée Lauder blockbuster was absolutely outstanding, but it did not necessarily equate to an increase in the fragrance business. We had a bigger challenge with some of the cosmetics fragrances — Lancôme, Lauder and Clinique — [and] we’re trying to figure out why. We’ve got to work on that piece of [the business].”
Nevertheless, late entries in the “cosmetics fragrance” arena gave that business a jolt. “We got Clinique Happy To Be toward the tail end [of the selling season]. It had a [double-digit] positive effect,” said Borofsky. “The customer was truly responding to newness [and] fragrance is becoming more of a fashion business.”
Looking ahead, “we think we’ve got some good opportunities in the spring,” said Borofsky. “Flankers and summer fragrances will add excitement and animation to the counter — and that’s what the customer is truly looking for. Britney and Be Delicious will continue. [Escada’s] Rockin’ Rio is looking pretty good and we’re trying XOXO’s fragrance.”
“We’re thrilled — December was fantastic,” said Jon Pollack, executive vice president and general merchandise manager at Belk. “Women’s fragrances were just incredible, with very high-single-digit increases. The fragrance bar was in the high-double digits.
“[The business] was very much there,” continued Pollack. “It came in very strong and continued into the week after Christmas. The week five increase was incredible — the week after Christmas has become a very important part of the Christmas business. It is attributable to self-purchase. A lot of people were bringing in their gift cards [during week five] and buying their fragrances of choice.
“A lot of growth came out of newness and a powerful performance from the fragrance bar — especially Chanel — Chanel performance was off the charts.” Coco Mademoiselle was “awesome,” he said, as were No.5 and Chance.
Pollack added, “Curious Britney Spears was a runaway number one in terms of newness for the holiday. Be Delicious was terrific, Ralph Lauren Style was good and so was True Star. Cashmere Mist was also a big contributor in terms of existing brands.”
Pollack noted that the women’s side of the business exceeded expectations; men’s, which was “as expected,” experienced a low-single-digit increase.
Of the key three department store brands, Estée Lauder and Clinique “were a challenge, but we showed good growth [with] Lancôme. [It] trended very powerfully in November and December. Clinique’s Happy To Be did well as a last-minute addition,” he added, noting that, on the men’s side, Beyond Paradise for Men was a winner. Another late entry, Touch of Pink from Lacoste, also trended well.
For spring, “there seems to be a lot of powerful newness as well as some very powerful men’s entries,” said Pollack. “I look for an equal balance of newness in men’s and women’s fragrances for spring.” He listed Tommy Bahama, Armani Black Code and Claiborne’s Realities For Men as a few scents “with a lot of investment behind them.” They “could create excitement at the men’s bar, which hasn’t had as much animation at the counter as the women’s [bar] has.”
“We were really pleased [with holiday sales],” said Elizabeth Morello, senior vice president and gmm of cosmetics and fragrances for Macy’s West. Top performers included Chanel, across the board, as well as Be Delicious, Cashmere Mist, Curious Britney Spears and Paris Hilton’s eponymous scent.
“The biggest surprise was that some of the really big houses — classic brands — had excellent [performances during] weeks three, four and five,” said Morello. “It was a nice surprise because they struggled in weeks one and two.” One such franchise that came on during the middle of December was Ralph Lauren Fragrances. “Romance was great due to Silver,” said Morello. Holiday stalwart Acqua di Gio Pour Homme delivered men’s sales, as did Calvin Klein’s Eternity for Men, she said.
“A lot of the limited-distribution brands in men’s performed well,” added Morello, citing Azzaro Chrome and Jean Paul Gaultier’s Le Male among the category’s men’s scents. Another star was Clinique’s Happy To Be, which hit shelves in early December and really came on in week three, Morello noted.
Overall, the business “exceeded expectations on the men’s and women’s side,” said Morello. “Newness helped and some of the marketing programs — in-store visuals, television [spots] and newspaper advertising — helped us.”
“Women’s fragrance did extremely well,” said Bettina O’Neill, vice president and dmm of cosmetics for Barneys New York. O’Neill cited “strong double-digit increases” in the category, particularly for Frederic Malle, Chanel, Acqua di Parma and Serge Lutens. Kabbalah candles from Slatkin & Co. as well as candles from Burn performed very well, according to O’Neill.
Overall, sales were slightly better than expected, although O’Neill noted that certain categories did not perform up to expectations. “We had high-single digits overall,” she said. “But men’s was a little more disappointing.”
Claudia Lucas, senior vice president and gmm of beauty for Henri Bendel, was “very pleased” with December results. She noted the store’s focus on more theatrical events, as opposed to straight promotions, was a big factor in the store’s success, as was its new lingerie department, which opened in November. “We put a lot of beauty products, including Laura Mercier and Trish McEvoy bath and body products, on the lingerie floor and [the two categories] sold very well together,” she said.
Lucas also noted strong sales for MAC’s holiday color collection and products from Benefit and Pout. As well, Bendel’s eponymous bath and body line continues to be a strong seller, especially the line’s Birch and White Pepper candles.
Another factor in the store’s holiday success, Lucas believes, is the strength of the euro and other foreign currencies against the dollar. “[During the holiday season], we had exceptional tourist traffic — they were buying things to take home as gifts as well as taking advantage of the savings for themselves,” she said.
Treatment continued to be strong for Bergdorf Goodman, according to Muriel Gonzalez, senior vice president and gmm. “It’s been our best business and has been strong all year,” she said. Gonzalez cited brands such as La Mer, Sisley, RéVive and Amore Pacific as strong performers for the retailer. In fragrance, Jo Malone, Clive Christian, Annick Goutal and, of course, Chanel No.5, which Gonzalez described as “explosive,” were Bergdorf’s most successful brands. She noted that exclusivity was a big draw: “Wherever we had very limited distribution, we did very well,” she said. Looking forward, Gonzalez said she hopes to “continue to see innovation and new product development in treatment as well as new ideas coming out of color cosmetics.”
Looking at the spring season, Lucas said the retailer will launch corporate sister Bath & Body Works’ new Bigelow line at the end of February.
“We had a very good holiday, with strong sales across all of our categories,” said Betsy Olum, senior vice president of marketing for Sephora. Brands such as Philosophy, Benefit, N.V. Perricone and Strivectin remained “very strong,” according to Olum, as well as gift sets from Philosophy and Jessica Simpson’s line, Dessert. Strong performances in color, according to Olum, came from Urban Decay, Smashbox and Hard Candy, while Prada and Dolce & Gabbana Light Blue did well in fragrance. Sephora’s catalogue and online businesses both did very well for holiday, she added.
And, going forward, celebrities are likely to continue exerting influence over the fragrance market — and not just the prestige end of it. “From Britney to The Donald, celebrity fragrances and spokesmodels have made their mark, not only in the department stores, but also in mass outlets, as celebrities such as Antonio Banderas launched a new fragrance in mass and Matthew McConaughey was named the new spokesmodel for Stetson,” said Ianni.
The only remaining mystery? Which star will sign a scent deal next. Sarah Jessica Parker, anyone?
— With contributions from Bryn Kenny