By and  on December 16, 2005

NEW YORK — Last year, beauty retailers were saved on the night before Christmas — and they believe the prestige market is gearing up for a repeat performance. In fact, a number of store executives are predicting gains in the mid- to high-single digits.

"The [holiday] business will come at least as late as it did last year — and the swing of Hanukkah lined up with Christmas will push the business even later," predicted Howard Kreitzman, vice president and divisional merchandise manager for cosmetics and fragrances at Bloomingdale's.

The standouts so far in fragrance include the scents from the celebrity trio of Sarah Jessica Parker, Britney Spears and Jennifer Lopez, as well as the designer fragrances Calvin Klein's Euphoria, Youth Dew Amber Nude, Miss Dior Cherie and Viktor & Rolf's Flowerbomb. Newsmakers on the men's side included Ralph Lauren's Polo Black, Armani Code by Giorgio Armani and Canali.

Retailers are banking on an extra day between Thanksgiving and Christmas, plus an extra push from Hanukkah, which starts on Dec. 26, compared with Dec. 8 last year.

"The business will continue to be late, late, late," agreed a major department store retailer, who requested anonymity. "We really won't know how we did until we all wake up on the 26th."

And, said the retailer, business will continue to be late going forward.

"Every year, Black Friday has less and less of an impact overall," said the department store retailer. "The business was OK, because of the newness and heavy sales promotions, but it's becoming less and less of an indicator as far as holiday business, at least for beauty." While business is currently "relatively flat" in beauty, the additional day between Thanksgiving and Christmas is expected to give the business a lift. "However, we're not anticipating a huge windfall," said the retailer.

But many say they are prepared for the last-minute rush.

"We still see the final weekend before Christmas as the strongest weekend of the season, even though shoppers have a full week — including Saturday — afterwards," said Betsy Olum, senior vice president of marketing for Sephora. "But we do expect to be busy in the final week, as the procrastinators spread the shopping season out to its last days. We are also optimistic for the final week of December. We have a lot of new and exclusive products to launch on 12/26, and the fact that Hanukkah falls immediately after Christmas suggests an extra strong post-Christmas week.""Business was strong the entire week preceding the holiday and throughout the Thanksgiving weekend, with particularly strong online sales," continued Olum. "The strong momentum we've experienced year-to-date, including Thanksgiving, bodes well for holiday sales."

At Saks Fifth Avenue, Bulgari's Red Tea fragrance will be launched exclusively on Sunday, noted Kate Oldham, the retailer's vice president and dmm of cosmetics accessories and fragrances. On Dec. 1, Sean "Diddy" Combs hand-delivered the first shipment of the so-called "couture" version of his new men's fragrance for the Estée Lauder Cos., which will be carried at Saks' Manhattan; Beverly Hills, Calif.; Atlanta; Bal Harbour, Fla., and Dadeland, Fla., stores.

Saks launched five scents this fall. "We are very happy with all of our new fragrances," Oldham remarked. "We are very optimistic for our Christmas season. Our fragrance business has been enjoying a strong performance this fall."

Versus Thanksgiving last year, Belk's fragrance business was up in the high-double digits, according to Jon Pollack, executive vice president and general merchandise manager for cosmetics and fragrances. "The strength was really on the women's side," said Pollack. "We're very bullish on the fragrance part of the business. It should end December with a double-digit increase in total."

Pollack said he anticipates women's will be stronger than men's, with women's expected to be up in the high-double digits and men's up in the high-single digits. "There's so much more news and animation in the marketing efforts [on the women's side]."

The fragrance business at Bergdorf Goodman has been "extremely robust for the season," said Ed Burstell, senior vice president and gmm of cosmetics, accessories and footwear, "and we're exceeding plan for season-to-date so far." He noted both women's and men's were trending up.

Shelley Rozenwald, senior vice president of cosmetics, skin care, fragrance and beauty services at Holt Renfrew, said, "We had a great November." She added that fragrance has been a strong business for the past 18 months, with women's scents up 15 percent year-over-year for November and men's up 7 percent. The retailer launched seven new scents this season. As for the rest of the year, Rozenwald said she was anticipating an increase of 18 percent on the women's side compared with last year and a 7 percent rise on the men's side. "So far, it looks really promising.""Since Studio is not promotionally driven, this date is less critical to us than to other types of retailers," said Robin Coe-Hutshing, founder and creative director for the Studio at Fred Segal. "However, it is the beginning of the season, and we can use it as a litmus to gauge seasonal business. The first weekend of December is a wake-up call for shoppers and we usually see a sharp rise in sales and traffic beginning at that point. [However] people are just dipping their toe in at this point. Our real holiday business tends to hit a bit later — and once it begins, it is nonstop. That said, we were very pleased with the trend and anticipate a very good response to our holiday offering." Coe-Hutshing added that she expects holiday sales to be "about even" with last year.

Shawn Tavakoli, owner of Los Angeles-based Beauty Collection boutique, believes that the surge will come late again this year. "I don't think it is going to be any different this year," said Tavakoli. "People have more on their plate every year and they procrastinate.  Also, everyone wants to take advantage of the last-minute sales."

That was somewhat apparent on Black Friday, Tavakoli added: "Since most of our customers are hitting the mall on Black Friday, we really do not get a big hit. Most of beauty business is done through department stores rather than specialty beauty boutique stores like ours. Our biggest increase in sales [on Black Friday] was through our Internet sales."

While fragrances traditionally perform well during the holiday season, the skin care and color cosmetics categories are gaining strength for gift-giving. "The whole skin care category — especially the sets — are seeing excellent sell-through," said the unnamed retailer. "And in makeup — and the eye category in particular — we're also seeing strong sell-through. Eye shadow kits are doing well, and there seems to be a resurgence in lipstick, as opposed to lip gloss. Clinique's Butter Shine lipstick is doing especially well, and their holiday color story has done particularly good business. Lancôme mascaras are another standout. In general, kits or items where there's newness and novelty are doing well." Color and skin care items from Shiseido, Clarins, Chanel, BeneFit and Bobbi Brown also are performing very well, said the retailer."At Sephora, we offer many exclusive gift sets and unique products across all beauty categories and our brand partners have really stepped up with exciting merchandise this season," said Olum. "Our exclusive sets from Bare Escentuals, Smashbox, Fusion Beauty and T3 are doing extremely well. Products that can't be found anywhere else from Philosophy, Dior and Go Smile are also doing well this holiday season.

"In makeup, our Lip category is being driven by some great lip-plumping and lip gloss gift sets. The Lip Fusion plumping set from Fusion Beauty is a top seller, along with sets from City Lips and Too Faced. Gloss sets from Lorac, Dior and our own Sephora brand also have been well received.

"Bath sales usually don't kick in until later in the season, but we are very encouraged by the strong performance in these categories this early on, driven in part by gift sets from Philosophy, L'Occitane and our own Sephora label."

Studio's Coe-Hutshing also is seeing strength in high-end skin care. "Luxury creams — such as Crème de la Mer, Taer Icelandic and Freeze 24/7 — are becoming a great holiday gift," she said.

As far as fragrances go, Saks' Oldham said bright spots on the women's side this fall have been Viktor & Rolf's Flowerbomb, Bond No. 9, Estée Lauder's Youth Dew Amber Nude, the Jo Malone business, Creed and Miss Dior Cherie. Standouts on Saks' men's side include Canali, Armani Code and Bulgari Aqua Pour Homme. Oldham added, "John Varvatos and Ralph Lauren's Purple Label continue to be strong."

Belk's has introduced 20 scents for this fall and standouts include Euphoria by Calvin Klein, Lovely Sarah Jessica Parker and Fantasy Britney Spears. On the men's side, "Polo Black has been terrific and [Liz Claiborne Cosmetics'] Soul has done very well for us," said Pollack, who noted Armani Code and the designer's Acqua di Giò scents have been tremendous. Pollack added that both classic and recent entries have seen strength, including Tommy Bahama fragrances, and Live Jennifer Lopez, Estée Lauder's Pleasures, Donna Karan's Cashmere Mist and Chanel's Coco Mademoiselle and No.5.

The unnamed department store retailer named Lovely Sarah Jessica Parker and Fantasy Britney Spears as two standout fragrances, and noted that other strong sellers include Calvin Klein's Euphoria, DKNY's Be Delicious, Donna Karan's Cashmere Mist and a good part of Chanel's fragrance portfolio, with Coco Mademoiselle especially strong. Estée Lauder's Pleasures also is doing well, "especially with the addition of Pleasures Exotic."On the men's side, the retailer observed that "L'Oréal seems to have the men's side sewn up." Among the standouts for men are Giorgio Armani's perennial bestseller, Acqua di Giò Pour Homme, as well as Armani Code, Ralph Lauren's Polo Black and Polo Blue and Calvin Klein's Obsession for Men.

Bergdorf's Burstell noted that a number of scents and brands have highlighted the retailer's fragrance business this season, which saw the introduction of five new scents and a number of line extensions. Standout performers include Creed's Love in White, Etro, L'Artisan Parfumeur's Fleur d'Oranger, Guerlain, Clive Christian, Jo Malone, Agraria, Santa Maria Novella and Anthousa.

For Holt Renfrew's Rozenwald, "Jo Malone was the leader of the pack." Thierry Mugler's Angel assortment has been particularly strong, as well. Other highlights in women's include Prada's fragrance and Tom Ford's Youth Dew Amber Nude for Lauder. On the men's side, standouts include Canali, Armani Code and Acqua di Giò.

Donna Karan's Essence also has been a bright spot, because "people don't want to smell like everyone else," said Rozenwald, who contended Armani Privé was experiencing success for the same reason — like Essence, Privé features four different scents. Matthew Williamson's scent has been a standout, Rozenwald noted, adding she's looking forward to the January or February launch of Jean Paul Gaultier's Power of Two masterbrand.

Sephora's Olum noted, "The early read on fragrance suggests a strong December. Our list of top sellers for the holiday season so far includes Pink Sugar, Stella McCartney, Philosophy's Grace and Prada. For holiday, we've teamed up with our brand partners to create Sephora's most exciting gift set yet — our custom Fragrance Gift for Her. This set includes nine samples of our top-selling women's fragrances to try, plus a gift voucher of equal value that can be redeemed at any Sephora store for a full-size bottle of any one of the samples included. Gift sets from Dolce & Gabbana Light Blue, DKNY Be Delicious and Burberry are also doing very well so far."

Fragrance standouts at Bloomingdale's include Narciso Rodriguez for Her, Alien by Thierry Mugler, Calvin Klein Euphoria and Vera Wang on the women's side, and Ralph Lauren Polo Black, "the entire house" of Cartier scents, Canali and Giorgio Armani's Code on the men's side. Color and treatment also is trending strong for the holidays, Kreitzman said.At Studio, a number of categories, including fragrances, candles, accessories, sachets and fragrance diffusers, are "all continuing a strong performance," said Coe-Hutshing, with standout scents including Nanadebary; L'Artisan Parfumeur Moodswings five-fragrance set, $110; Serge Lutens Cedre Fragrance; Molinard Nirmala, and exclusive limited-edition dramming silver vials of our signature Liquid scents from Burn [Coe-Hutshing's candle line] such as Hinoki Temple Incense."

"This year, we have put a lot of effort in preparing for the holidays," said Tavakoli. "We are anticipating increased sales compared to last year. Beauty Collection specializes in specialty fragrances such as Bond No. 9, Creed and L'Artisan, and we have seen increased sales in our Creed fragrances. Usually during the holidays, our bath, body and candle categories outperform the rest of our personal care categories. We also see a big increase in cosmetics mirrors and flat irons."

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