By  on February 24, 2006

NEW YORK — The consolidation-driven realignment of the U.S. fragrance industry has produced more tremors with a distribution deal between Puig USA and the Coty Prestige division of Coty Inc.

As of July 1, Coty will become the distributor of Puig's five main fragrance brands in the U.S. prestige market.

The deal does not affect the Barcelona-based firm's mass business, Puig Fragrance & Personal Care USA, or any of the other markets in the rest of the world.

Under the terms, Coty will do the selling and provide back-office and logistics support, according to the companies. After the transition, Puig will maintain a marketing squad housed in Coty headquarters.

The deal will hand five well-established fashion and lifestyle brands to Coty. These include Prada, which is a venture between Puig and the Milan fashion house; Carolina Herrera, with its six fragrance lines; Paco Rabanne; Nina Ricci, and a licensing agreement with Comme des Garçons.

Puig does not break out sales, but industry sources estimate that Puig does more than $50 million at wholesale in the U.S. with those brands.

In a telephone interview from Barcelona, Marc Puig, chief executive officer of Puig Beauty & Fashion Group, said the ongoing consolidation of department stores convinced him that the way to make headway in the U.S. was to strike a strategic alliance. Both he and Bernd Beetz, ceo of Coty Inc., described the resultant arrangement as a "win-win" combination.

Puig said Coty has achieved the number-one ranking on women's fragrance bars in U.S. department stores. The addition of Puig's fragrances will strengthen Coty's standing even more and that "will allow us to leverage the position and give us more weight."

That leverage, he added, will put Puig in a stronger position "and we will be able to promote our brands." He stressed that one of the main advantages is to allow Puig to market its brands more effectively. "We have been operating in this country for many years," Puig continued, "and we wanted to make sure we had the best solution to promote our brands." In addition, the move will help Puig utilize its resources.

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