LONDON -- After a booming 1993, retailers here say tougher times are ahead for the fragrance business.
The retailers said they are aiming for sales increases of only 5 to 10 percent this year, a major shift from last year, when some London stores registered increases of up to 30 percent as the fragrance market recovered from more than two years of the doldrums.
A slew of launches, an improving economy and a recovery in the all-important tourist market contributed to the upturn, which brought scent sales back to the levels seen in the boom of the late 1980s.
"There is no way we could have sustained the growth of last year," said Jenny O'Donoghue, perfumery buyer at Harrods. "We always knew this year would be more difficult, and it is. The growth is very patchy, and I believe it will stay that way for the remainder of the year."
The strength in London last year wasn't mirrored throughout the country, however. Sales in the U.K. of women's fine fragrances fell 4.4 percent last year, to $351.49 million (264.33 million pounds) from $367.75 million (276.5 million pounds) the previous year and were below the 1991 level of $358.7 million (269.7 million pounds), according to A.C. Nielsen data.
The overall market wasn't affected as much by launches, which generally take longer to filter out from the U.K. capital to the smaller cities, or by the increase in tourist activity.
The bestsellers last year nationwide, in order, were Anais Anais by Jean Cacharel, Chanel No. 5, Cacharel's Loulou, Yves Saint Laurent's Opium, YSL's Paris, Chanel's Coco, Giorgio Beverly Hills, Calvin Klein's Obsession, Christian Dior's Poison and Klein's Eternity.
It was the first time the Calvin Klein fragrances were among the top 10 in the U.K.
As for men's fine fragrances, sales fell 2.8 percent, to $212.85 million (141.9 million pounds) from $194.22 million (146.03 million pounds), according to the Nielsen figures. Volume sales fell 9 percent, to 6.98 million units from 7.67 million.
The best-selling men's fragrances were, in order, YSL's Jazz, YSL's Kouros, Aramis Classic, Paco Rabanne, Ralph Lauren's Polo, Eternity for Men, Dior's Fahrenheit, Obsession for Men, Boss by Hugo Boss and Rapport.While they lagged behind the big city retailers last year, stores outside London are reporting low double-digit increases in fragrance sales so far in 1994, now that last year's launches are rolling out to more doors,
Debenhams, one of the U.K.'s largest department-store groups, is seeing strong sales growth as it benefits from such 1993 launches as YSL's Champagne, Givenchy's Insense, Jean Paul Gaultier and Ralph Lauren's Safari for Men, said Ian Marshall, the group's sales controller.
Launches this year include Christian Dior's Tendre Poison, Klein's Escape for Men and Sunflowers from Elizabeth Arden. Upcoming launches include Elements from Boss and Havana from Aramis.
No U.K. launch date has been set for Calvin Klein's CK One.
"This year will continue to present a tough challenge, but we feel that we can continue to grow our fragrance sales above plan and above the overall market, which we have been able to do for the last 18 months," Marshall said.
There appears to be little price resistance to the new fragrances, even with the launch of such middle-priced lines as Sunflowers.
"I don't think that level has a greater appeal than the premium lines," he said. "The two sit hand-in-hand. There is still a big potential marketplace for premium fragrances at premium prices."
Marshall and other buyers said there may be a shift away from lighter, more natural fragrances over the next few months.
Debenhams continues to do significant sales volumes with such heavier scents as Youth Dew and Opium, and Marshall predicted an overall shift in the market by next spring toward heavier fragrances.
"There is a latent desire for fragrances representing the entire olfactory spectrum," he said. "The new style will be between the very light fragrances around now and the heavier fragrances of the Eighties."
Hilary Dart, perfumery buyer at Selfridges, said the store is seeing strong growth in such "softer" fragrances as Lancome's TrÄsor, Tuscany per Donna from Aramis, Gaultier, Coco and Champagne.
Selfridges will launch Nicole Miller this year, and Dart puts that fragrance in a similar category.
"They are not green or light fragrances but are a middle ground," she said.Selfridges continues to do well this year with Gaultier, which was among its top-five sellers in 1993, and Safari for Men, which was third, Dart said.
The store's major launch this spring was Escape for Men, for which Calvin Klein made a personal appearance. Selfridges remains the world's largest retailer of Klein fragrances, Dart said.
She predicted strong sales in the U.K. of CK One whenever it is launched, both because of the concept and the strength of the Calvin Klein name.
One of Harrods' main sales vehicles this spring was its second fragrance mail-order catalog. Harrods did the first one last Christmas and it was so successful, O'Donoghue decided to repeat it.
The theme was "The Spirit of Summer," and the featured fragrances included Angel, Byblos, Genny Shine, Gaultier, Parfum d'Ete by Kenzo, Ungaro's Senso and Homme II, Wings from Giorgio and Calyx by Prescriptives.
The summer catalog was more gift-oriented than the Christmas one, O'Donoghue said, because she wasn't sure whether demand for fragrances would be as strong in the summer as during the holidays.
Such promotional tactics, including gift-with-purchase offers, are increasingly important this year as stores fight to maintain growth in fragrance sales.
Buyers said sales of such past stars as Eternity, L'Eau d'Issey and even Champagne have hit a plateau, and the business overall needs continual kicks to maintain its impetus.
"The fragrance market isn't as easy this year as it has been," Dart said. "I think we're in the process of turning full circle in the style of fragrances. We're in a transition phase in customer taste, and it's affecting sales. We all have to work a lot harder to keep them growing."
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