A strong stable of fall launches has beauty retailers hopeful for holiday — even as most would view flat sales as a victory.
With some sources forecasting holiday sales could decline by 4 to 12 percent — which would come on top of the 10 percent drop last December — retailers said the key to Christmas this time around will be heavy promotion of gift-with-purchase sets, exclusives and the strength of recent launches, including Lola from Marc Jacobs and Couture Couture from Juicy Couture.
“I think we should look for flat or better,” said Howard Kreitzman, vice president of cosmetics and fragrances at Bloomingdale’s, who put on a brave face. On the one hand, Kreitzman said he can’t believe business could be worse than last year, but the executive also acknowledged he knows how difficult it is to reverse a downward trend. “It does look and feel a bit better than it did a few months back,” Kreitzman observed, adding that he is hoping for the best while preparing for a difficult season.
“We’re hoping it will be better this year,” said Bettina O’Neill, vice president and divisional merchandise manager of cosmetics and fragrances at Barneys New York.
According to the consumer tracking firm NPD, prestige fragrances, men’s and women’s combined, suffered a 10 percent drop for the first half of this year in dollar volume. Unit sales fell 13 percent and the entire beauty business — fragrance, skin care and color cosmetics — was down 7 percent in dollar sales for the period.
Some executives are bracing for a fourth-quarter slide of anywhere from minus 4 to minus 12 percent.
Karen Grant, vice president and global industry analyst for NPD, stopped short of making a prediction, saying, “We are hopeful, but it is still too early to tell. There is some good launch activity,” she added. “But will it be enough to offset the declines in the category? It’s a toss up.”
The predictions of a number of manufacturers, speaking not for attribution, are that a flat fourth quarter looks like a longshot at this point. “I’d be pleasantly surprised if it was flat,” remarked one observer. “Even 2 percent [down] would be a win.”
Another executive noted, “It’s not all that positive, but it’s not dire, either.” While observing that the better business has shrunk by 25 to 30 percent over the last year, he cited a catalogue of factors, ranging from continued destocking by retailers and diminished expectations of consumers — a downsizing of everything — to a slight perking up of demand recently with retail results ranging from minus 5 to plus 5 percent. The situation is highly complex and come December, “there could be a pleasant surprise,” he added.
“The results of our women’s fragrance launches have been pretty good,” said Kreitzman at Bloomingdale’s.
The fragrance category struggled all through 2008 and into the first half of this year, he noted, “but the arrival of the new launches turned the business around.”
With fewer blockbuster launches than last fall, the men’s fragrance category has been lagging women’s. Comparing the sales in the last seven weeks with the entire year to date, the sales trend in the women’s category has improved by two-thirds, although the overall business remains “slightly down,” Kreitzman noted.
Among the launches driving the turn are Lola by Marc Jacobs, Juicy Couture’s Couture Couture and Very Hollywood by Michael Kors. “There have been nine meaningful new [women’s] fragrance launches this fall,” Kreitzman noted, compared with “no more than two or three last fall.”
Lola exceeded “reasonably high” expectations, since it eclipsed Jacobs’ earlier hit Daisy. Juicy Couture is one of the store’s biggest franchises and the brand’s newest fragrance “did very well.” He added, “That one was quite powerful.” The Kors fragrance is still in its initial launch period and it is doing well, said Kreitzman.
Dolce & Gabbana’s new set of five Tarot card-inspired fragrances has “gotten off to a good start,” he said, and CH Carolina Herrera, which is due to bow at Bloomingdale’s later this month, “looks good.” Kreitzman also sounded hopeful about Narciso Rodriguez’s Essence and Issey Miyake’s new women’s fragrance, A Scent.
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