By and  on December 28, 2001

NEW YORK -- Santa went bargain hunting for beauty this year.

The jolly old fellow skipped the shopping malls and instead landed right in front of Wal-Mart and Walgreens. With price being the watchword of the season, mass market fragrance and beauty manufacturers and retailers say they were able to maintain, and in some cases even increase, their sales, while their department store counterparts struggled to make plan.

Executives estimate that when final tallies are made, mass merchants will pull out of what has been one of the most dismal seasons for most retailers with overall storewide sales up 6 percent over last year.

Tony Wesley, chief operating officer of New Dana Perfumes Co., which markets a host of mainstay brands like Canoe, Heaven Sent and Chantilly, said: "Our sales are at least as good as last Christmas. We were above pace through mid-December and we are gathering last week's data now."

Sales at Wal-Mart and Kmart were solid, he said. "But Eckerd really surprised us. Eckerd just blew it out." While Eckerd has not been one of New Dana's biggest customers, on a percentage basis, its sales grew the most. Wesley attributed part of Eckerd's success to an early season coupon offer. On another upbeat note, he said, "Kmart ordered more from us this year."

Others observed that Kmart had been much more aggressive in its presentation of fragrance and bath-and-body gift sets than in the recent past. In one New Jersey Kmart flagship, there were no fewer than 10 four-sided displays devoted to beauty sets. "They were far better organized this year," said Wesley. There was also a selection of floor displays with holiday cosmetics collections like one from Bonne Bell, which was picked over. Kmart's beauty executives were not available for comment this week.

What really pleased executives at New Dana was that Wal-Mart's sales of its basic stock items -- which bring higher margins -- were up along with the value-priced gift sets. "I was so excited about the trend in the basic business," said Wesley. He said being in stock had helped. "Last year, we were only 84 percent in stock at Wal-Mart. We sent out a very large order at the end of November and were in stock this year."

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