NEW YORK -- Sanofi Beaute Inc. has put its Perry Ellis and Geoffrey Beene fragrance brands and licenses up for sale, the company said Thursday.
"Ever since we bought Yves Saint Laurent in 1993, we felt we had too many brands," said James Fusilli, director of communications for Elf Sanofi Inc. "We want to emphasize the brands that we feel have the greatest global potential. This is for Sanofi Beaute worldwide. This is a global sale."
Lawrence J. Aiken, president and chief executive officer of the New York-based Sanofi Beaute Inc., said, "These two don't fit globally with the strategy of the company worldwide. The awareness is not as high as the other brands."
Elf Sanofi Inc. is the U.S. subsidiary of a Paris-based pharmaceutical company that owns a worldwide beauty firm, Sanofi Beaute. In addition to the Ellis, Beene and YSL brands, Sanofi markets Oscar de la Renta, Nina Ricci, Van Cleef & Arpel, Roget & Gallet and Stendhal.
Fusilli emphasized that de la Renta is not for sale, as had been rumored. That brand plus YSL and -- to a lesser extent -- Nina Ricci, are considered the crux of Sanofi's beauty business. The Oscar signature scent reportedly did $30 million at wholesale in the U.S. last year, while YSL's Opium generated $25 million.
Sanofi divulged neither the expected selling price nor sales figures for the Ellis and Beene businesses. Sources estimate, however, that Ellis -- with last year's 360° women's scent and the 1985 entry, Perry Ellis for Men -- does a combined volume approaching $30 million and about $38 million worldwide, including pipelined merchandise and leakage into the mass market.
The launch of a men's version of 360°, originally slated for October, has been pushed back to 1995.
Beene, with its 1976 classic men's scent Grey Flannel and women's fragrance Bowling Green, is estimated to have sales of $8 million domestically, and $15 million worldwide. A women's scent called Chance had been slated for a fall introduction.
The Ellis license was acquired in 1990 when Sanofi bought Parfums Stern from Avon. Beene was acquired with the purchase of Jacqueline Cochran in May 1987.Sources in the industry estimated a possible price for both brands at $15 million, possibly less.
Sanofi has begun talking to interested parties, but it has no buyers yet, Fusilli said. He dismissed a report that Sanofi was selling off the fragrance brands to raise cash to buy portions of Sterling Winthrop's pharmaceutical business from Eastman Kodak.
"We began discussing the reduction of the number of brands before we said we are interested acquiring a portion of Sterling Winthrop," he said.
At Elf Sanofi's Paris headquarters, a spokesman said the company plans to hold onto the remaining brands, including Roget & Gallet, Stendhal and certainly YSL. "Logic dictates that we have a long hard look at all assets," he pointed out, but added, "We don't plan on having a cascade of sales."
In New York, Fusilli asserted that this is not the first step in selling off the entire beauty subsidiary.
"Sanofi has stated that the beauty business is a core business," he said.
While Fusilli maintains that the company felt it had too many brands, he stated that it would be "unfair" to say Sanofi cannot afford to feed so many mouths, as some industry executives had suggested.
Some experts, however, echoed Fusilli's explanation. "Today, the major department store groups are reducing the number of fragrance brands they stock, and are continuing to emphasize what's new and heavily promoted," said management consultant John Horvitz. "It has become increasingly difficult for smaller companies to operate profitably in department store distribution. This makes Beene and Ellis less attractive than they might have been in the designer fashion heyday of the Eighties."
Consultant Allan Mottus, who conducts market share studies in the prestige market, said, "Retailers are cutting back on peripheral brands like mad, and those things are peripheral."
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