The European fragrance market still smells sweet, despite a sour economy.

“Fragrance is holding up pretty well,” said Keran Fordham, buying controller at The Perfume Shop in the U.K. and Ireland.

Her sentiment is echoed by many — including executives at France’s Galeries Lafayette, the U.K.’s House of Fraser and German distributor Aroma Company — who say their current business is flat year-over-year.

For others, it’s up.

“Fragrance continues to be a huge growth area for us,” said Gina Cowey, beauty buyer at London’s Liberty.

Already in 2009, business for Germany’s Linari home and personal fragrance brand has risen 10 percent over 2008, according to its director, Rainer Diersche.

The holiday season, meanwhile, looks promising, with most executives expecting gains for 2009.

“We think we’ll finish the year with growth, which has been the case since the beginning of 2009,” said a Sephora France spokeswoman, who added by comparison, the overall French market is so far this year flat in value and down in unit terms.

“In Europe, I would say the U.K. is still very buoyant,” said Jean Mortier, senior vice president, commercial, for Coty Prestige, referring to the fragrance market. “Southern Europe is still difficult.”

His company plans for growth in 2009, as well.

“[The end of this] year could be better than in 2008 if the flu doesn’t spread over France,” added Galeries Lafayette’s perfumery beauty buyer, Isabelle Pecenicic. “The end of last year was already tough.”

The recession weighed on revenues industrywide. Retail sales for fragrance in Western Europe hit $13.99 billion in 2008, a 2.4 percent increase from 2007, according to tracking firm Euromonitor International. Specifically, sales grew 0.4 percent in France, 1.8 percent in Germany, 2.6 percent in Italy and 2.7 percent in the U.K.

Helping to bolster business this year have been — among other factors — product price increases of approximately 2 to 3 percent in certain European countries and the profusion of high-ticket fragrances, according to some industry sources.

Today, there’s good news on the sell-in front.

“We believe we are at the end of destocking,” said Coty’s Mortier. “A lot of retailers had reduced their inventory from January to June, and it looks like they have started to reorder and now have inventory at the right levels.”

“The sell-in versus last year is slightly down,” said Didier Sabas, Chanel’s regional president for Europe, of the market.

Meanwhile, the sellout has not been drastically hit.

“On the retail side, we haven’t seen any market collapse in Europe; the fragrance market is still pretty strong,” said Alain Lorenzo, president and chief executive officer of Parfums Givenchy.

Looking ahead, Euromonitor forecasts scent sales will increase 2.1 percent in Western Europe between 2008 and 2013, with France and Germany expected to post negative growth of 1.1 and 1.5 percent, respectively, and Italy and the U.K. revenue increases of 1.2 and 0.8 percent, respectively.

“We’re cautiously optimistic,” said Per Neuman, managing director of Estée Lauder U.K. and Ireland, referring to the fragrance business through yearend.

Novelty is spurring gains for many retailers’ fragrance departments. In Germany, for instance, recently launched scents have racked up 20 percent of overall fragrance revenues for the last two years, according to tracking firm Information Resources Inc. This shows “cutthroat competition between new and old,” said Sabine Hefter, director, cosmetics, at IRI in Germany.

“We have had a strong array of female fragrances this autumn [and] winter…which will ensure strong sales continue until Christmas,” said Debbie Beaumont-Howell, head buyer for beauty accessories at the House of Fraser department store in the U.K.

For France’s Printemps, bestselling fall fragrances include Yves Saint Laurent Parfums’ Parisienne and Parfums Nina Ricci’s Ricci Ricci, according to Delphine Hervé, who is responsible for the department store’s beauty collections.

Ricci Ricci and Idole d’Armani are also doing well at Galeries Lafayette. The department store’s Pecenicic said the scents are a mix of classic and modern and speak to a sexy, mature woman.

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